Quick Answer
Washington DC solar incentives in 2026 include the SREC-II market ($360–$440 per MWh for systems owned by the resident), full retail-rate net metering for systems under 100 kW, a property tax exemption on added system value, no sales tax on solar equipment, and the Solar for All no-cost rooftop program for income-qualified households. The federal residential tax credit expired for systems placed in service after December 31, 2025.
Washington DC homeowners paid an average residential electricity rate near 16¢/kWh in mid-2026, according to marketplace data compiled by EnergySage. That is below the national average, yet solar still pays back faster in the District than in most states. The reason is the incentive stack: DC hosts the most valuable Solar Renewable Energy Credit market in the country, pairs it with full retail-rate net metering, and exempts solar from sales and property tax.
For anyone researching solar incentives Washington DC, the headline change in 2026 is the loss of the federal residential tax credit. The 30% Residential Clean Energy Credit under Internal Revenue Code Section 25D expired on December 31, 2025, so cash and loan buyers can no longer claim it. The good news is that local incentives are strong enough on their own to keep solar attractive. This guide explains every active DC solar incentive, how SREC-II income compares to net metering savings, what Solar for All covers, and how to model payback without the federal credit.
For the national picture, see our solar incentives in USA 2026 guide. For homeowners weighing a system, our residential solar overview covers sizing, equipment, and financing basics. For installers who need to turn SREC and utility-rate data into customer proposals quickly, SurgePV’s generation and financial tool can pull DC rates, SREC values, and financing assumptions into one model.
Quick Answer
Washington DC solar incentives in 2026 include the SREC-II market ($360–$440 per MWh for systems owned by the resident), full retail-rate net metering for systems under 100 kW, a property tax exemption on added system value, no sales tax on solar equipment, and the Solar for All no-cost rooftop program for income-qualified households. The federal residential tax credit expired for systems placed in service after December 31, 2025.
In this guide:
- Latest 2026 status of every active Washington DC solar incentive
- How the federal ITC expiration changes the math
- DC SREC-II market mechanics and realistic income
- Net metering rules for PEPCO customers
- Solar for All eligibility and waitlist status
- Sales tax, property tax, and financing rules
- Three real-world ROI scenarios by system size
- Common mistakes and how to avoid them
Latest Updates: Washington DC Solar Incentives 2026
DC did not depend on the federal residential credit to make solar work. The District built its business case around locally controlled incentives, and those incentives remain in place for 2026. What changed is that ownership models and financing assumptions now matter more, because there is no federal credit to paper over weak modeling.
Washington DC Solar Incentive Status — Mid-2026
| Incentive | Type | Status | Key Terms |
|---|---|---|---|
| Federal residential ITC | Tax credit | Expired | Section 25D ended December 31, 2025 |
| Federal Section 48E | Tax credit | Active for commercial/TPO | 30% through 2032 for eligible TPO solar and storage |
| DC SREC-II | Production credit | Active | $360–$440 per MWh; 15-year eligibility |
| Net metering | Export credit | Active | Full retail rate under 100 kW; credits roll over indefinitely |
| Solar sales tax exemption | Tax exemption | Active | No sales tax on qualifying solar equipment |
| Solar property tax exemption | Tax exemption | Active | Added system value excluded from assessment |
| Solar for All | No-cost solar | Active, waitlisted | Income-qualified single-family homeowners; FY2026 funds limited |
| Community solar | Shared solar | Active | Low-income subscription option through Solar for All |
Key Changes Since 2025
Federal ITC expiration: The 30% residential Investment Tax Credit expired for systems placed in service after December 31, 2025, under the One Big Beautiful Bill Act. Homeowners who buy solar with cash or a loan in 2026 cannot claim it, according to IRS guidance. Third-party-owned systems under leases or power purchase agreements may still access the commercial credit under Section 48E.
RPS tightening: The Local Solar Expansion Amendment Act of 2022 raised the District’s solar carve-out from 10% to 15% by 2041, according to the DC Public Service Commission 2026 RPS Report. The same law adjusted the Solar Alternative Compliance Payment schedule, which acts as a ceiling on SREC prices.
Solar for All funding pressure: FY2026 applications for single-family rooftop solar are being placed on a waitlist because program funds are limited, according to the DC Sustainable Energy Utility. Eligible applicants may be referred to community solar subscriptions while they wait.
Key Takeaway
2026 is a local-incentive year in DC. SREC-II income and full retail net metering replace the federal credit as the core drivers of payback. Accuracy in production and SREC modeling matters more than ever.
Why Washington DC’s Solar Market Matters in 2026
DC is small in area but ranks among the most financially favorable markets for rooftop solar. The decisive factor is not sunshine; it is the value of the credits that solar production creates. The District’s Renewable Portfolio Standard requires 100% clean electricity by 2032 and a 15% solar carve-out by 2041, according to the DCPSC 2026 RPS Report. Because there is limited rooftop space inside the District, the supply of local SRECs stays tight and prices stay high.
Market Size and Targets
DC had more than 19,900 certified solar energy systems totaling 312.7 MW located inside the District by the end of 2025, according to the DCPSC 2026 RPS Report. Ward 5, Ward 7, and Ward 8 together host nearly 60% of total installed capacity. The District’s goal is 100% renewable electricity by 2032 and 15% from local solar by 2041.
Utility Rate Snapshot — Mid-2026
The average residential electricity rate in Washington DC is approximately 16¢/kWh, according to EnergySage marketplace data. That is below the U.S. residential average of roughly 18.8¢/kWh reported by the U.S. Energy Information Administration for April 2026. Solar economics in DC therefore rely less on high avoided utility rates and more on SREC income and strong net metering terms.
| Utility | Service Area | Approximate Residential Rate (2026) |
|---|---|---|
| PEPCO | Washington DC and parts of Maryland | ~13–17¢/kWh depending on supply contract |
| Competitive suppliers | DC customers who shop supply | Varies by contract |
DC’s electricity market is partially deregulated. PEPCO delivers power regardless of supplier, but customers can choose a competitive supplier for the generation portion of the bill. Net metering applies to the PEPCO delivery bill.
DC SREC-II: The Highest-Value Solar Renewable Energy Credit Market in the US
A Solar Renewable Energy Credit, or SREC, represents one megawatt-hour of solar electricity production. DC’s SREC-II program requires electricity suppliers to purchase SRECs from locally certified solar systems to meet the District’s solar carve-out. The result is a seller’s market: prices consistently range from $360 to $440 per SREC in 2026, according to pricing data from Flett Exchange and broker reports.
SREC-II Terms for 2026
| Feature | Terms |
|---|---|
| Credit value | 1 SREC per 1,000 kWh produced |
| 2026 price range | $360–$440 per SREC |
| Eligibility period | 15 years from system interconnection |
| Market ceiling | Solar Alternative Compliance Payment, $440 in 2026 |
| Trading | Through brokers such as SRECTrade, Sol Systems, or direct contracts |
| Registration | PJM Generation Attribute Tracking System (GATS) |
On a typical 8 kW system producing about 10,000 kWh per year, the homeowner would earn 10 SRECs annually. At $400 per SREC, that is $4,000 per year in credit income alone, or $60,000 over 15 years. This is why DC payback periods are among the shortest in the country.
How SREC Income Is Taxed
SREC income is generally treated as taxable income. Homeowners should track annual payments and report them appropriately. The exact treatment can depend on how the system is financed and whether it is owned directly or through a third party.
Spot Market vs. Fixed Contracts
SREC brokers typically offer two paths:
- Spot market: Sell each SREC at current market prices. Higher upside, higher volatility.
- Fixed contract: Lock in a set price per SREC for a term, often three to five years. Lower risk, slightly lower price.
Most homeowners choose a fixed contract for budgeting stability, but the spot market can capture price spikes when compliance demand is tight.
Installer Insight
Ownership matters for SRECs. If you sign a lease or PPA, the system owner — not you — keeps the SREC income. In DC’s high-SREC market, that can mean giving up $50,000 or more over the life of the system. Cash or loan purchase usually wins on total lifetime value.
Net Metering in Washington DC
DC’s net metering program is administered by PEPCO for most customers. It allows solar owners to earn full retail-rate bill credits for excess electricity sent to the grid. The combination of high SREC values and full retail net metering is what makes DC one of the strongest residential solar markets in the country.
Net Metering Terms for 2026
| Feature | Terms |
|---|---|
| Export credit rate | Full retail rate for systems under 100 kW |
| Credit rollover | Month to month indefinitely |
| Annual true-up | Remaining excess paid at avoided-cost rate |
| System size cap | Generally sized to 100% of annual usage |
| Larger systems | Over 100 kW credited at generation rate |
| Interconnection fee | $100 for systems 10 kW or less |
For a system exporting surplus at a retail rate of 16¢/kWh, the export credit is 16¢/kWh. Self-consumed solar offsets the full retail rate, so every kilowatt-hour used on-site is worth the same amount.
Commercial Net Metering Note
Commercial systems in DC are subject to a different rule. Excess generation beyond monthly demand is carried forward, but any remaining credits at year-end are compensated at the lower generation rate rather than the full retail rate. This makes proper system sizing especially important for commercial projects.
Solar for All: Free Solar for Income-Qualified DC Residents
Solar for All is one of the few genuinely no-cost rooftop solar programs in the United States. Administered by the DC Sustainable Energy Utility, it installs solar at no charge on single-family homes owned or rented by income-qualified District residents. Participants receive the bill savings; the program retains the SRECs to help cover costs.
Solar for All Eligibility — FY2026
| Requirement | Detail |
|---|---|
| Income limit | At or below 80% of area median income, or enrolled in SNAP, TANF, SSI, LIHEAP, WAP, or similar programs |
| Property type | Single-family home, townhouse, row house, or small multifamily building of 2–4 units |
| Metering | Individually metered; must receive electric service from PEPCO |
| Existing solar | Home must not already have solar or a signed installation contract |
| Cost | $0 to the participant |
A household of four must earn at or below $131,100 annually to qualify under the 80% AMI threshold, according to DCSEU Solar for All guidelines. Since program launch, more than 11,000 income-qualified households have received solar or community solar benefits, according to Solar Power World.
FY2026 Waitlist
Funding for FY2026 single-family rooftop solar is limited. New applications are placed on a waitlist, and eligible applicants may be offered a community solar subscription that saves roughly $500 per year while they wait for rooftop availability.
DC Solar Tax Exemptions and Financing
Beyond SRECs and net metering, DC offers two durable tax advantages and several financing options.
Sales Tax Exemption
Washington DC does not charge sales tax on qualifying solar energy systems or installation labor. On a $25,000 solar installation, that exemption saves roughly $1,500 compared with jurisdictions that charge a 6% sales tax. The exemption is typically applied at the point of sale when the installer documents the equipment correctly.
Property Tax Exemption
DC excludes the added value of a qualifying solar energy system from real property tax assessments. On a $500,000 home where solar adds roughly $20,000 in value, the exemption avoids about $114 in annual property taxes at DC’s effective rate of roughly 0.57%, according to EnergySage. Homeowners should confirm with the Office of Tax and Revenue that the exemption has been recorded after installation.
Financing Options
| Financing Option | Best For | Key Feature |
|---|---|---|
| Cash purchase | Homeowners with available capital | Highest lifetime savings; owner keeps all SRECs |
| Solar loan | Homeowners who want to own without a large upfront payment | Fixed monthly payments; owner keeps incentives |
| Home equity loan or HELOC | Homeowners with significant equity | Potentially lower rates; tax-deductible interest possible |
| Lease or PPA | Homeowners who want no upfront cost | Third-party owner claims Section 48E and keeps SRECs; savings are lower but predictable |
Washington DC Solar Costs and ROI in 2026
With the federal residential tax credit gone, accuracy matters more than ever. The economics depend on system cost, SREC price path, self-consumption rate, and financing choice.
Typical System Costs
Industry pricing for Washington DC residential solar in 2026 ranges from roughly $2.70/W to $3.20/W installed, based on market surveys. A typical 8 kW system therefore costs about $21,600 to $25,600 before incentives. The sales tax exemption removes any state-level tax at purchase.
Scenario A: Cash Purchase, 7 kW System, No Battery
Assume a 7 kW system costing $21,000, producing 9,000 kWh per year, with 35% self-consumption and a retail rate of 16¢/kWh.
- Annual SREC income: 9 SRECs × $400 = $3,600
- Annual self-consumption value: 3,150 kWh × $0.16 = $504
- Annual export credit value: 5,850 kWh × $0.16 = $936
- Gross annual value: $5,040
- Simple payback: 4.2 years
Scenario B: Cash Purchase, 8 kW System, No Battery
Assume an 8 kW system costing $24,000, producing 10,300 kWh per year, with 35% self-consumption.
- Annual SREC income: 10.3 SRECs × $400 = $4,120
- Annual self-consumption value: 3,605 kWh × $0.16 = $577
- Annual export credit value: 6,695 kWh × $0.16 = $1,071
- Gross annual value: $5,768
- Simple payback: 4.2 years
Scenario C: Loan Purchase, 8 kW System, No Battery
Assume the same 8 kW system financed with a 6.5%, 20-year solar loan covering the full $24,000.
- Monthly loan payment: ~$179
- Monthly SREC income: ~$343
- Monthly utility savings: ~$137
- Net monthly cash flow: ~$301 positive
- Simple payback on net out-of-pocket: immediate positive cash flow
The loan scenario shows why DC solar remains attractive even without the federal credit. SREC income alone often exceeds the loan payment for the first several years, though SREC prices will decline over time as the Solar Alternative Compliance Payment steps down.
Key Takeaway
In Washington DC, a well-designed residential solar system can pay back in 4 to 6 years for cash buyers and produce positive cash flow for loan buyers. The decisive inputs are SREC price, system production, and whether the owner keeps the SRECs.
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Common Mistakes DC Solar Buyers Make
The most common error is assuming the old federal residential tax credit still applies. It does not for cash or loan purchases in 2026. Another frequent mistake is signing a lease or PPA without realizing the SREC income goes to the financing company. In DC, that mistake is especially costly.
Other mistakes include:
- Ignoring SREC ownership: Ask every installer or financier who will own and sell the SRECs.
- Oversizing beyond usage: Net metering works best when the system matches on-site consumption patterns.
- Missing the GATS registration deadline: SREC eligibility starts from the interconnection date, but registration must be completed promptly.
- Not comparing supplier rates: Because DC has a deregulated supply market, the effective retail rate you offset depends on your supplier contract.
- Skipping the property tax exemption filing: The exemption is not always automatic; confirm with the Office of Tax and Revenue.
How to Apply for Washington DC Solar Incentives
The application process is installer-led for most programs.
- Get multiple quotes from DC-licensed installers who are familiar with SREC registration and PEPCO interconnection.
- Confirm ownership economics if you are offered a lease or PPA. Ask who keeps the SRECs.
- Submit the PEPCO net metering application through your installer using PEPCO’s online portal.
- Register the system in PJM-GATS for SREC generation, usually handled by your installer or SREC broker.
- Apply the sales tax exemption at the point of sale.
- File the property tax exemption with the DC Office of Tax and Revenue after installation.
- Set up SREC sales through a broker and choose spot or fixed pricing.
- Income-qualified residents should apply for Solar for All directly through the DCSEU website rather than through a private installer.
For installers, SurgePV’s solar proposal software can automate DC-specific incentive modeling and produce customer-facing documents that clearly show SREC income, net metering savings, and payback by financing option. SurgePV’s solar design software also lets teams model roof layouts, shade impact, and system production before any paperwork is filed.
Conclusion: Is Solar Worth It in Washington DC in 2026?
Yes, for most homeowners who own their roof and pay PEPCO retail rates, solar remains a strong investment in 2026. The federal residential tax credit is gone, but DC’s SREC-II market, full retail net metering, and tax exemptions still produce payback periods in the 4-to-6-year range for well-designed cash purchases.
Three concrete next steps:
- Get at least three quotes from DC-licensed installers and ask each one to model SREC income, net metering savings, and payback using your actual usage.
- If you are considering a lease or PPA, compare the lifetime value against a cash or loan purchase, factoring in who keeps the SRECs.
- Use a detailed financial tool or ask your installer to show year-by-year SREC revenue and savings, not just first-year projections, before signing.
Frequently Asked Questions
What solar incentives are available in Washington DC in 2026?
Washington DC offers SREC-II production credits ($360–$440 per MWh), full retail-rate net metering for residential systems under 100 kW, a property tax exemption on added system value, no sales tax on qualifying solar equipment, and the Solar for All no-cost rooftop program for income-qualified households. The federal residential tax credit expired after December 31, 2025.
How do DC SRECs work in 2026?
DC’s Solar Renewable Energy Credit II program awards one SREC for each megawatt-hour of solar electricity a system produces. System owners sell these credits to utilities that need them to comply with the District’s renewable portfolio standard. Prices in 2026 range from about $360 to $440 per SREC, and credits can be sold through brokers such as SRECTrade or Sol Systems.
Is the federal solar tax credit still available in Washington DC in 2026?
No. The 30% federal Residential Clean Energy Credit under Internal Revenue Code Section 25D expired for systems placed in service after December 31, 2025. Third-party-owned systems under leases or power purchase agreements may still access the commercial credit under Section 48E if construction began before July 4, 2026.
How does net metering work in Washington DC?
PEPCO credits excess solar exports back to the customer at the full retail rate for systems under 100 kW. Credits roll over from month to month indefinitely. At the annual true-up, any remaining excess generation is paid out at the avoided-cost rate. Systems can generally be sized up to 100% of historical annual usage.
What is the Solar for All program in DC?
Solar for All is a District program administered by the DC Sustainable Energy Utility that provides no-cost rooftop solar to income-qualified homeowners, typically those at or below 80% of area median income or enrolled in programs such as SNAP, SSI, or LIHEAP. The program aims to benefit 100,000 low-income households by 2032. FY2026 funding is limited, and new applications are placed on a waitlist.
Are batteries incentivized in Washington DC in 2026?
DC does not offer a standalone battery rebate or performance program for residential customers in 2026. Batteries can still make sense for backup power or to shift solar self-consumption, but the financial case depends mainly on net metering savings rather than a separate incentive.
Will solar increase my property taxes in Washington DC?
No. DC law exempts the added value of a qualifying solar energy system from local real property tax assessments. The exemption is not automatic in all cases; homeowners should confirm with the Office of Tax and Revenue that the exemption has been applied after installation.
What is the typical solar payback period in Washington DC in 2026?
Well-designed residential solar systems in Washington DC typically pay back in 5 to 7 years in 2026, depending on system cost, financing, SREC pricing, and self-consumption. The combination of high SREC values and full retail net metering produces one of the shortest payback periods in the country.
Can renters access solar incentives in Washington DC?
Renters cannot claim rooftop solar incentives directly, but income-qualified renters may qualify for Solar for All community solar subscriptions or the Affordable Home Electrification Program. These programs provide bill credits or home efficiency upgrades without requiring panel ownership.
How do I apply for Washington DC solar incentives?
Most applications are installer-led. The installer submits the PEPCO net metering interconnection application, registers the system in PJM-GATS for SRECs, applies the sales tax exemption at purchase, and helps file the property tax exemption. Income-qualified residents apply for Solar for All directly through the DCSEU website.
