The District of Columbia stands out as a leader in renewable energy initiatives, leveraging its approximately 207 sunny days per year to encourage solar rooftop adaptability. Following incentive programs are designed to make solar energy accessible and affordable, contributing to a sustainable future for the state’s residents.
Table of Contents
Federal Incentives
Federal Investment Tax Credit (ITC)
Commercial solar energy systems installed in DC can take advantage of the Federal Investment Tax Credit 48E, which provides a tax credit of 30% of the total cost of the system, provided prevailing wage and apprenticeship requirements are met.
Residential systems can no longer claim any federal solar tax credit, as the One Big Beautiful Bill eliminated it for systems installed after January 1st, 2026.
Commercial Depreciation
Commercial asset owners can write off 100% of a project’s value in depreciation in the first year. The One Big Beautiful Bill reinstated the 100% bonus depreciation, while simultaneously eliminating the Modified Accelerated Cost Recovery System (MACRS) that previously depreciated solar energy systems over 5 years.
The depreciable basis of a project is reduced by half of the ITC value when combined with the 30% ITC. Here’s a quick example:
- Project cost = $800,000
- 30% credit = $240,000
- Reduced depreciation basis: $800,000 – ($240,000 / 2) = $680,000
A company’s tax rate is then taken into account to calculate the exact amount they’re able to write off.
Net Energy Metering in D.C.
Net metering is a critical component of D.C.’s solar incentives, allowing residents to receive full retail rate credit for the surplus electricity generated by their solar panels. Pepco, D.C.’s only electric utility, offers a standard net metering contract to all residential customers, ensuring that surplus electricity is credited to the next bill at the full retail rate and can be carried over indefinitely.
Solar Initiatives and Programs
D.C. has launched several initiatives to promote solar energy:
- Solar for All: This program aims to provide the benefits of solar electricity to 100,000 low- to moderate-income households by reducing their electric bills by 50% by 2032.
- Solarize DC: A community-based outreach initiative that assists residents in making the switch to solar energy by installing solar panels or subscribing to a local community solar farm.
- Solar Works DC: The District’s premier solar photovoltaic system installation and job training program, which operates a comprehensive year-round training program for residents.
Solar Advantage Plus Program
The Solar Advantage Plus Program is a first-come, first-serve rebate program for low-income residents, offering up to $10,000 to cover the installation costs of a 3-4kW solar panel system. Participants own the system and can sell the resulting Solar Renewable Energy Certificates (SRECs).
Further information and programs can be found at the Programs.Dsireusa.org
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