Tacoma Public Utilities is a community-owned municipal utility — not an investor-owned utility like Avista or Puget Sound Energy. As a municipal utility, TPU operates under Washington state’s net metering mandate (RCW 80.60), which requires all utilities — investor-owned, PUD, municipal, and cooperative — to offer net metering at full 1:1 retail rate until the utility’s aggregate net-metered solar capacity reaches 4% of its 1996 peak load. TPU remains well within that capacity threshold as of 2026.
Under TPU’s net metering program, every kilowatt-hour a Tacoma solar system exports to the grid earns a credit at TPU’s current retail rate — approximately 10–11¢ per kilowatt-hour. Credits roll forward month-to-month and accumulate against future bills. Washington’s annual March 31 reset applies to TPU customers as it does to all Washington utility customers: any credits remaining in the account on March 31 are zeroed out and donated to TPU’s low-income assistance program rather than paid out in cash.
The combination of TPU’s very low rate and the March 31 credit forfeiture creates the strongest right-sizing argument of any city in the dataset. At 10–11¢ per kilowatt-hour, forfeited credits at the March 31 reset are worth less in absolute dollar terms than in higher-rate markets, but the principle is the same: oversizing a system beyond annual consumption produces credits that earn nothing. Accurate consumption analysis before installation is essential for maximizing the return on what is, at TPU’s rate, an investment that requires careful sizing to pencil out.
Tacoma’s solar economics require the most straightforward presentation in this dataset. At TPU’s approximately 10–11¢ per kilowatt-hour rate — roughly one-third of Massachusetts rates and half of Connecticut rates — the per-kilowatt-hour value of solar production is low by national standards. A 7kW Tacoma system producing 8,000 kWh annually generates approximately $800–$880 in net metering credit value per year. At current system costs of approximately $2.85/W, that same 7kW system costs roughly $20,000 before Washington’s sales tax exemption — a 22–25 year simple payback without any tax credit, substantially longer than most other markets in this dataset.
Washington’s sales tax exemption on solar equipment and installation labor (6.5–10.1% depending on local rates; Tacoma’s combined rate is approximately 10.1%) saves approximately $1,500–$2,000 on a typical Tacoma system, improving the effective cost. The property tax exemption prevents the installation from increasing annual tax bills. Solar leases and PPAs allow the installing company to claim the commercial ITC (Section 48/48E through 2027) and pass savings to homeowners through below-market monthly rates — for Tacoma homeowners, the lease/PPA pathway may deliver better effective economics than cash purchase in 2026, since the installer can monetize the tax credit that individual homeowners can no longer claim directly.
Two factors improve the Tacoma solar case beyond the rate-based calculation. First, TPU’s rates have been rising alongside broader Pacific Northwest electricity price increases driven by grid modernization, drought-reduced hydro output, and electrification demand growth. A system installed at 2026 costs benefits from every future rate increase — the net metering credit value rises with each TPU rate adjustment. Second, the resilience argument is genuine: western Washington’s exposure to Cascadia Subduction Zone earthquake risk, winter windstorms, and atmospheric river flooding events creates real outage scenarios where battery backup has tangible household value independent of bill savings.
Washington provides two meaningful state-level solar incentives that apply to Tacoma homeowners. The sales tax exemption under RCW 82.08.962 exempts solar energy systems and installation labor from Washington state and local sales tax through 2029. Tacoma’s combined state and local sales tax rate is approximately 10.1%, meaning a $20,000 system saves approximately $2,000 at the point of purchase — no paperwork required from the homeowner, applied directly by the installer. The property tax exemption exempts the added assessed value of a qualifying solar installation from property taxes. Washington does not offer a state income tax credit for solar (the state has no income tax). No state solar rebate or production incentive program exists at the state level; incentives are utility-specific. Tacoma Public Utilities does not currently offer a published per-watt solar rebate as of early 2026 — confirm directly with TPU for any current customer incentive programs, as municipal utility programs can change without broad public notice.
