Washington’s New Clean Energy Tax Bill & Why It Matters

A major clean energy policy for Washington crossed the finish line this legislative session. House Bill 1960, sponsored by Representative Alex Ramel, overhauls the tax framework for utility-scale wind, solar, and battery storage projects in the state. The implications for developers, counties, and tribes are substantial – read on for more.

What the Bill Does

HB 1960 replaces Washington's existing personal property tax for new and repowered clean energy projects with a flat, nameplate capacity-based excise tax. This addresses a significant obstacle to clean energy development – under the old system, property tax revenues for host counties declined as projects depreciated over time. That system created budget uncertainty for counties and fueled anti-clean energy sentiment in local siting conversations. By levelizing tax payments across a project's lifetime, the bill gives counties predictable, sustained revenue.

The second part of the bill establishes a community and Tribal investment structure funded by a portion of the state excise tax revenue. Counties that adopt the model clean energy ordinance, which will be developed by the Department of Commerce in collaboration with counties, developers, and tribes by July 2028, will become eligible for additional community investment grants. Tribes will receive dedicated capacity funding to support clean energy project development, technical assistance, energy sovereignty initiatives, tribal participation in regional energy planning, and climate resilience work. RNW will seek to participate in the Department of Commerce's stakeholder process to help shape the model ordinance.

Key details to know:

• Effective date: January 1, 2028. The excise tax applies only to new and repowered projects. Existing projects are not retroactively affected.
• Pipeline projects: Special provisions exist for projects currently in development that may want to opt into the new framework depending on their circumstances.
• Tax neutrality: This is not a tax increase or a cut. Total lifetime tax payments are designed to remain roughly equivalent to the current system.
• Rate certainty: Excise tax rates are locked in for the lifetime of each project, giving counties  and developers long-term predictability. Rates can be updated by the legislature every five years, with three years' advance notice before any changes take effect.
• Model ordinance: The Department of Commerce will develop a model clean energy ordinance through a public stakeholder process, due by July 2028. Counties and cities that adopt it, or maintain a local ordinance no more restrictive, become eligible for community investment grant funding.
• Tribal investment: A dedicated portion of the state excise tax flows directly to the Tribal Capacity Grant Program giving tribes flexible funding to pursue their own clean energy goals.

Washington's clean energy targets are approaching fast, and the window to build the necessary infrastructure is now. HB 1960 removes a key structural barrier that has complicated relationships between developers and host communities, while creating new incentives for counties and tribes to actively support clean energy siting. This bill is the result of two years of work involving county associations, developers, tax experts, and tribes, and RNW is proud to have played a central role in shaping this legislation into a workable and durable policy.