Sales and use tax refunds and deferrals are available for certain clean energy projects, when certified by the Department of Labor & Industries (L&I). The state created this program as a way to address the impacts of climate change on a large scale.
NOTE: If you are a homeowner adding solar panels to your residence, you do not need to read further. Please go to the state Department of Revenue (DOR) website for additional information.
To receive a refund, a project developer must comply with specific labor standards. The machinery and equipment generating the electricity must be installed and the project completed by Dec. 31, 2029.
The amount of the refund depends on the generating capacity of the project.
Projects that can receive the refund must be of the following types:
The labor standards L&I reviews to certify a project can be included in a Project Labor Agreement (PLA) or Community Workforce Agreement (CWA) as part of the project. A project without a PLA or CWA must still fulfill the specific labor standards.
You must submit an application prior to the start of the project to L&I to receive a certification for your project. Take the certification to DOR to receive a refund for the purchase of the energy generating machinery and equipment.
Refunds - Large Energy Generation Project
IF you are constructing a facility generating more than 1,000 watts AC (1 KW) (Example: Enough energy to power at least 10-15 incandescent light bulbs or a household dishwasher) of electricity from any of these power sources,
Constructing a solar energy system capable of generating more than 500 kilowatts AC (example: Enough energy to power more than a dozen homes) of electricity,
You can receive up to a 100% refund of the sales tax spent on the energy-producing equipment.
To receive a 100% tax refund, you must submit an Application for Clean Energy Labor Standards Certification prior to the start of the project with the following:
A PLA or CWA is defined as a collective bargaining agreement with one or more labor organizations that establishes the terms and conditions of employment on the project.
To receive a 75% tax refund, you must submit an Application for Clean Energy Labor Standards Certification prior to the start of the project.
In addition, you must contact Office of Minority & Women’s Business Enterprises (OMWBE) and Department of Veteran Affairs (DVA) for consultation on the development of your plan to meet the standards or good faith efforts. The plan will identify steps which could reasonably be expected to meet the women, minority, and veteran-owned businesses procurement and contract standards or qualify for good faith efforts.
* Counties with a population density of less than 100 people per square mile or a county smaller than 225 square miles as determined by the state Office of Financial Management.
To receive 50% tax refund, you must submit an Application for Clean Energy Labor Standards Certification prior to the start of the project.
In addition, you must contact Office of Minority & Women’s Business Enterprises (OMWBE) and Department of Veteran Affairs (DVA) for consultation on the development of your plan to meet the standards or good faith efforts. The plan will identify steps which could reasonably be expected to meet the women, minority, and veteran-owned businesses procurement and contract standards or qualify for good faith efforts.
At the end of the project, you must provide documentation to L&I (see below) indicating that you met all of the following criteria:
*See the How to Apply tab for more information.*
* Counties with a population density of less than 100 people per square mile or a county smaller than 225 square miles as determined by the state Office of Financial Management.
Refunds - Small Energy Generation ProjectIF you are constructing solar energy systems capable of generating more than 100 kilowatts AC, but no more than 500 kilowatts AC (example: Powering up to about a dozen homes) of electricity,
THEN you can receive 50% refund of the sales tax spent on the energy-producing equipment.
You must submit an Application for Clean Energy Labor Standards Certification prior to the start of the project.
In addition, you must contact Office of Minority & Women’s Business Enterprises (OMWBE) and Department of Veteran Affairs (DVA) for consultation on the development of your plan to meet the standards or good faith efforts. The plan will identify steps which could reasonably be expected to meet the women, minority, and veteran-owned businesses procurement and contract standards or qualify for good faith efforts.
At the end of the project, you must provide documentation to L&I (see below) indicating that you met all of the following criteria:
*See the How to Apply tab for more information.*
*Counties with a population density of less than 100 people per square mile or a county smaller than 225 square miles as determined by the state Office of Financial Management.
Tax Deferrals - Solar, Clean TechTo receive a deferral, a project developer must comply with specific labor standards described below. Applications must be received by June 30, 2032. Projects must be completed by Jan. 1, 2033.
Qualified projects must meet the standards in one of these categories:
The labor standards L&I reviews to certify a project can be included in a Project Labor Agreement (PLA) or Community Workforce Agreement (CWA). A project without a PLA or CWA must still fulfill the labor standards, described below.
In the application to L&I, you will need to decide one of three tax deferral amounts sought:
To qualify for 100% tax deferral, you must first contact the Department of Revenue (DOR) to file for a deferral certificate and will be provided with an application Id.
Once DOR provides the application Id, you must then submit an Application for Clean Energy Labor Standards Certification prior to the start of the project with the following:
A PLA or CWA is defined as a collective bargaining agreement with one or more labor organizations that establishes the terms and conditions of employment on the project.
To receive a 75% tax deferral, you must first contact the Department of Revenue (DOR) to file for a deferral certificate and will be provided with an application Id.
Once DOR provides the application Id, you must then submit an Application for Clean Energy Labor Standards Certification prior to the start of the project.
In addition, you must contact Office of Minority & Women’s Business Enterprises (OMWBE) and Department of Veteran Affairs (DVA) for consultation on the development of your plan to meet the standards or good faith efforts. The plan will identify steps which could reasonably be expected to meet the women, minority, and veteran-owned businesses procurement and contract standards or qualify for good faith efforts.
At the end of the project, you must provide documentation to L&I (see below) indicating that you met all of the following criteria:
* Counties with a population density of less than 100 people per square mile or a county smaller than 225 square miles as determined by the state Office of Financial Management.
To receive 50% tax deferral, you must first contact the Department of Revenue (DOR) to file for a deferral certificate and will be provided with an application Id.
In addition, you must contact Office of Minority & Women’s Business Enterprises (OMWBE) and Department of Veteran Affairs (DVA) for consultation on the development of your plan to meet the standards or good faith efforts. The plan will identify steps which could reasonably be expected to meet the women, minority, and veteran-owned businesses procurement and contract standards or qualify for good faith efforts.
Once DOR provides the application Id, you must then submit an Application for Clean Energy Labor Standards Certification prior to the start of the project.
At the end of the project, you must provide documentation to L&I (see below) indicating that you met all of the following criteria:
* Counties with a population density of less than 100 people per square mile or a county smaller than 225 square miles as determined by the state Office of Financial Management.
How to ApplyThis section details how to apply for sales and use tax refunds and deferrals.
Prior to the start of your project:
Please contact Labor & Industries (L&I) at CleanEnergyReview@Lni.wa.gov to request an application and provide the following information:
L&I will contact you within 7-10 business days regarding next steps to submit an Application for Clean Energy Labor Standards Certification.
Prior to the start of your project:
You must first contact the Department of Revenue (DOR) at DORDeferrals@dor.wa.gov to file for a deferral certificate and will be provided with an application Id.
Once DOR provides the application Id, please contact Labor & Industries (L&I) at CleanEnergyReview@Lni.wa.gov to request an application and provide the following information:
L&I will contact you within 7-10 business days regarding next steps to submit an Application for Clean Energy Labor Standards Certification.
We will send you a letter with the detailed findings and unmet criteria.
Questions? Call 360-902-5335 and press option 4, or email CleanEnergyReview@Lni.wa.gov .
RulemakingThis page reflects all current Clean Energy rules.
Clean Energy: Labor Standards for Tax Incentives
Chapter 296-140 WAC , Clean Energy Labor Standards Certification
Questions? Call 360-902-5335 and press option 4, or email CleanEnergyReview@Lni.wa.gov .