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Evergreen Ledger

2SHB 1871

In Committee

House

Residential energy storage

Incentivizing grid-connected residential battery energy storage systems.

This status may be delayed. See Action History below for the latest updates.

How does a bill become law?
  1. Introduced: The bill is filed and assigned a number.
  2. Committee: A subject-matter committee holds hearings, takes public testimony, and decides whether to advance the bill.
  3. Floor Vote: The full chamber (House or Senate) debates and votes on the bill.
  4. Opposite Chamber: The bill repeats the committee and floor vote process in the other chamber.
  5. Governor: The Governor reviews the bill and decides whether to sign or veto it.
  6. Signed: The bill has been signed into law.
Introduced: February 25, 2025
Last Action: January 12, 2026
Status: H Approps
Companion Bill:
View Bill Text (HTML) (opens in new tab)View Bill Text (PDF) (opens in new tab)

AI Analysis

This analysis was generated by AI and may contain errors. It is not legal advice. Always refer to the official bill text for authoritative information.
People & CommunitiesPeople-leaningCorporate & Wealthy Interests

This bill establishes a state-run incentive program to help Washington residents install grid-connected home battery systems, especially for low- and moderate-income households, to improve grid resilience and support clean energy goals. Utilities must offer either time-of-use billing or battery aggregation into virtual power plants, and they receive tax credits to offset program costs.

  • Creates a state-administered incentive program for residential battery energy storage systems connected to the grid, with higher incentives ($765/kWh, capped at 18 kWh) for low- and moderate-income households and lower incentives ($450/kWh, capped at 18 kWh) for others.
  • Requires utilities with over 100,000 Washington customers to offer battery incentive programs; smaller utilities may participate voluntarily.
  • Mandates that at least 40% of program benefits go to low- and moderate-income households, service providers, housing authorities, or tribal governments.
  • Requires utilities to offer either time-of-use rates or virtual power plant integration (where batteries are managed collectively for grid reliability), and prohibits utilities from selling customer data beyond program operations.
  • Provides tax credits to utilities for incentive payments and up to 20% of program-related expenses (e.g., advanced meters, virtual power plant subscriptions), with a hard cap on total credits per utility.
  • Sets a 10-year window (July 1, 2026–June 30, 2036) for customers to apply for incentives and a 2038 deadline for utilities to claim tax credits; the program expires June 30, 2040.

Who is affected

  • Residential battery storage system owners and applicants — Residents who own or plan to install residential battery storage systems and meet income qualifications may receive direct financial incentives to offset installation costs, with higher support for low- and moderate-income households.
  • Electric utilities (light and power businesses) — Electric utilities with over 100,000 Washington customers must create and operate battery incentive programs, while smaller utilities may choose to participate; they can recover program costs through tax credits and must integrate customer batteries into grid operations.
  • Low- and moderate-income households — Low- and moderate-income households, especially those served by nonprofits, housing authorities, or tribal governments, receive priority access to incentives and support with income verification.
  • Battery system installers and equipment providers — Installers and equipment suppliers working with approved utility programs may gain new business opportunities through standardized program requirements and specifications.
Effective: July 1, 2026Fiscal impact: The state will provide tax credits to utilities equal to the incentive payments they make to customers and up to 20% of that amount for program-related expenses (e.g., meter upgrades, virtual power plant subscriptions). The total credit per utility is capped at 1.5% of its 2022 Washington power sales tax liability, and credits expire after June 30, 2038. No direct state appropriation is required—funding comes from reduced tax collections.Sunset: June 30, 2040
Model: Intel/Qwen3-Coder-Next-int4-AutoRoundGenerated: Mar 19, 2026 at 7:23 PM

Pro/Con Analysis

Stronger case for benefits

Potential Benefits (5)

  • The requirement that at least 40% of program benefits go to low- and moderate-income households—and the 70% higher per-kWh incentive for those households—creates a strong equity mechanism that directly reduces upfront costs for historically excluded residents, potentially enabling energy resilience and backup power access for vulnerable populations during wildfire-related outages.

    HousingPeopleRef: Sec. 3(3)(a), Sec. 4(1)(b)(i)

  • By mandating virtual power plant integration or time-of-use rates, the bill enables utilities to use distributed battery capacity to avoid or delay grid upgrades during peak demand or extreme weather events—reducing the risk and duration of outages for all customers, especially during high-risk fire seasons.

    Public SafetyPeopleRef: Sec. 3(2)(b)(ii), Sec. 3(2)(a)

  • The tax credit for program-related expenses (e.g., meter upgrades, VPP subscriptions) and incentive payments is designed to stimulate clean energy job growth in installation, grid integration, and software management—particularly benefiting local small- and mid-sized battery installers and electricians in underserved communities.

    Business & EmploymentPeopleRef: Sec. 5(1)(b), Sec. 5(1)(a)

  • The requirement that customers be enrolled in time-of-use or virtual power plant programs to receive incentives creates downstream savings through optimized electricity use—potentially lowering monthly bills for participants, especially those who shift high-demand activities to off-peak hours.

    energyLean peopleRef: Sec. 3(2)(a), Sec. 4(1)(a)

  • Allowing housing authorities, nonprofits, and tribal governments to serve as income verifiers and program administrators ensures culturally appropriate outreach and support—increasing the likelihood that low-income households, including renters and seniors on fixed incomes, can access and benefit from the program.

    HousingPeopleRef: Sec. 3(3)(b), Sec. 3(3)(b)(iii)
Potential Concerns (5)

  • The bill imposes a hard cap on tax credits per utility (1.5% of 2022 power sales tax liability), which may limit program scale and delay or reduce incentives for customers if funding is exhausted before the 2036 deadline—potentially creating a first-come, first-served bottleneck that disproportionately affects lower-income applicants who may take longer to complete installations.

    FinancialRef: Sec. 5(2)

  • The $450/kWh incentive cap for non-low-income households (capped at 18 kWh = $8,100 max) may be insufficient to offset typical $15,000–$25,000 battery system costs for average homeowners, limiting participation to wealthier households who can front large upfront costs—even though the bill frames the program as “for all residents.”

    HousingLean peopleRef: Sec. 4(1)(a), Sec. 4(1)(b)(ii)

  • The prohibition on leases and requirement that customers install systems directly (not via third-party ownership) may reduce access for renters and low-wealth households who cannot afford upfront costs and rely on third-party financing models—effectively excluding a large segment of the population the bill claims to prioritize.

    Business & EmploymentLean peopleRef: Sec. 3(3)(c), Sec. 3(3)(e)

  • The 20% cap on expense-related tax credits (e.g., for meter upgrades, VPP subscriptions) may constrain utilities’ ability to invest in robust grid integration infrastructure, potentially limiting program scalability and long-term grid reliability benefits.

    FinancialRef: Sec. 5(2), Sec. 5(3)

  • While low- and moderate-income households receive higher per-kWh incentives ($765 vs. $450), the 18 kWh cap means the maximum benefit for a low-income household is $13,770—still likely below the $18,000–$28,000 average installed cost of a full-home battery system, leaving many households unable to afford the full system without additional financing.

    HousingLean peopleRef: Sec. 4(1)(b)(ii), Sec. 4(1)(b)(i)

Who Is Most Affected

Low- and moderate-income householdsPositive Impact

Low- and moderate-income households benefit significantly from higher per-kWh incentives and priority access, but may still face barriers due to upfront cost requirements and lack of third-party ownership options. Net impact is positive, especially for those in wildfire-prone areas seeking backup power.

Electric utilities (light and power businesses)Mixed Impact

Utilities face new operational and infrastructure costs but are fully reimbursed via tax credits up to a cap. While they gain grid flexibility and avoid capital expenditures on new transmission infrastructure, compliance burdens and data restrictions may strain resources—net impact is mixed but leans slightly positive due to cost recovery.

Battery system installers and equipment providersPositive Impact

Battery installers and equipment providers gain new business opportunities, especially those partnering with utilities on standardized programs. However, the lease ban and income verification requirements may limit their ability to serve renters or low-wealth customers without third-party financing—net impact is positive for established local installers.

Rural and small-scale utilities and their customersMixed Impact

Rural and small utilities (under 100,000 customers) are not required to participate, giving them flexibility but potentially leaving their customers without access to incentives—net impact is neutral or slightly negative for these communities unless they voluntarily opt in.

Renters and low-wealth households without property ownershipNegative Impact

Renters, mobile home residents, and low-wealth households without equity in property are structurally excluded by the prohibition on leases and requirement for permanent installation—despite income-based incentives, they cannot benefit without ownership or landlord cooperation.