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Evergreen Ledger

E3SHB 1960

Signed

House

Renewable energy

Encouraging renewable energy in Washington through tax policy and investment in local communities.

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: January 28, 2026
Last Action: April 1, 2026
Status: C 260 L 26
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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 & CommunitiesBalancedCorporate & Wealthy Interests

This bill establishes a new tax on large-scale solar and wind energy generation and storage, while exempting related equipment from property taxes for qualifying facilities. It creates a matching grant program for local governments that invest in community benefits from renewable energy projects and a separate grant program for federally recognized tribes. The tax revenue is split between state and local accounts to fund community investments and tribal programs.

  • Creates a new renewable energy excise tax on solar and wind facilities (and storage systems) starting January 1, 2027, with rates varying by technology type and when the facility became operational (e.g., $6,300/year per MW for new wind facilities, $4,500/year per MW for new solar facilities, $1,500/year per MWh of storage capacity).
  • Exempts personal property (e.g., solar panels, wind turbines, battery storage) used exclusively for renewable energy generation or storage in qualified facilities from property taxation, depending on operational date (facilities operational before or on/after January 1, 2026).
  • Requires annual reporting to the Department of Revenue of facility location and nameplate capacity to support tax exemptions and excise tax administration.
  • Establishes a matching grant program for local governments (counties/cities) that enter into local investment commitments with project developers to fund community benefits, provided the jurisdiction does not impose de facto moratoria on renewable energy development.
  • Creates a tribal capacity grant program to support clean energy, climate resilience, and consultation activities by federally recognized tribes, with funding intended to be $21.5 million per biennium.
  • Repeals previous renewable energy tax and exemption laws (RCW 84.36.680 and 82.96.010) and replaces them with the new framework in this bill.

Who is affected

  • Renewable energy project developers — Renewable energy project developers (especially solar and wind) may receive matching state grants if they enter into agreements with local governments to invest in community benefits; wind developers must meet strict decommissioning and financial assurance requirements to qualify.
  • Local governments (counties and cities) — Counties and cities hosting qualifying renewable energy projects may receive local tax revenue shares from the new excise tax and be eligible for state matching grants if they avoid de facto moratoria on such projects.
  • Federally recognized Indian tribes — Federally recognized Indian tribes may receive capacity grants to support clean energy, climate resilience, and consultation activities, and must be engaged early in project planning if projects are located in their traditional territories.
  • Property owners with qualifying renewable energy systems — Property owners with renewable energy systems (solar or wind over 50 MW) benefit from exemptions from property taxation on equipment used for generation or storage, depending on when the facility became operational.
Effective: 2026-01-01Fiscal impact: The bill creates a new renewable energy excise tax (collected starting January 1, 2027) expected to generate revenue that is split between a state account (for local community investments) and local county accounts (distributed to local taxing districts). The state portion funds the local community investment account, and up to 50% of that may support tribal capacity grants. The bill also reduces property tax levies for local districts that receive excise tax revenue, offsetting lost property tax revenue from exemptions.
Model: Intel/Qwen3-Coder-Next-int4-AutoRoundGenerated: Mar 19, 2026 at 7:28 PM

Pro/Con Analysis

Potential Benefits (5)

  • The tribal capacity grant program ($21.5M/biennium) supports tribal consultation, climate resilience, and clean energy planning — strengthening tribal sovereignty and enabling communities with limited resources to engage meaningfully in siting decisions and adapt to climate impacts.

    Public SafetyPeopleRef: Sec. 205

  • The matching grant program rewards local governments that negotiate community benefits from developers (e.g., local hiring, infrastructure, affordability programs), directly channeling clean energy project value into local services and workforce development.

    Local GovernmentPeopleRef: Sec. 202

  • The property tax exemption for renewable energy equipment (solar, wind, storage) reduces carrying costs for qualifying facilities, improving project economics and encouraging investment — especially for large-scale projects that create local construction and maintenance jobs.

    Business & EmploymentPeopleRef: Sec. 101(1) & Sec. 102(1)

  • The bill allocates a portion of excise tax revenue to local taxing districts based on project location, providing a new, dedicated revenue stream for communities hosting renewable infrastructure — helping offset local infrastructure strain and supporting public services.

    Local GovernmentLean peopleRef: Sec. 104(1)(c)

  • The bill standardizes wind setbacks (e.g., 1.1× blade tip height for nonparticipating property lines), reducing inconsistent local rules and potentially streamlining permitting — though this also limits local discretion in some cases.

    Local GovernmentLean peopleRef: Sec. 203(1)(a)(H)
Potential Concerns (5)

  • The bill imposes a new renewable energy excise tax on solar and wind facilities, with rates as high as $6,300/year per MW for new wind facilities — a cost passed through to consumers via higher electricity prices or absorbed by project developers, reducing project economics and potentially delaying or canceling clean energy deployment.

    FinancialIndustryRef: Sec. 103(1)(ii)(A)

  • The tax rates are significantly higher for newer facilities (e.g., $6,300/MW for post-2027 wind vs. $2,900/MW for 2005–2019 wind), creating a financial penalty for new development and disincentivizing repowering — effectively subsidizing legacy infrastructure while discouraging expansion of the clean energy grid.

    FinancialIndustryRef: Sec. 103(1)(ii)(D)

  • The bill permanently reduces local property tax levies for jurisdictions receiving excise tax revenue, which may constrain future local revenue flexibility — especially in counties without large renewable projects — and could increase pressure on local governments to raise other taxes or cut services.

    Local GovernmentIndustryRef: Sec. 107

  • The bill bars jurisdictions with de facto moratoria from receiving matching grants, but defines “de facto moratoria” in ways that may penalize legitimate local land-use concerns (e.g., setbacks for public safety or noise), effectively coercing local governments to relax standards to access funding.

    Local GovernmentIndustryRef: Sec. 202(2)(a)(ii)

  • The financial assurance requirement for wind decommissioning (e.g., parent company guarantees for $10M+ projects) may disproportionately burden small-to-mid-sized developers who lack investment-grade credit, increasing barriers to entry and consolidating market share among large, well-capitalized firms.

    Business & EmploymentLean industryRef: Sec. 204(2)(b)

Who Is Most Affected

Large-scale renewable energy developersMixed Impact

Large-scale solar and wind developers (especially those with >50 MW projects) benefit from tax exemptions and access to matching grants, but face new excise taxes and strict decommissioning requirements — net effect is mixed but leans positive for well-capitalized firms with access to financing.

Local governments (counties and cities)Positive Impact

Counties and cities hosting qualifying projects gain new revenue (excise tax shares) and grant-matching opportunities, but lose property tax revenue on exempt equipment and face pressure to avoid “de facto moratoria” — net effect is positive for jurisdictions with strong project pipelines.

Federally recognized Indian tribesPositive Impact

Federally recognized tribes gain dedicated capacity grants ($21.5M/biennium) for consultation, climate resilience, and clean energy development — a significant new funding stream that strengthens tribal sovereignty and self-determination.

Electric ratepayers (households and businesses)Mixed Impact

Ratepayers may face slightly higher electricity prices due to the new excise tax passed through to consumers, but benefit from increased local investment and long-term grid reliability — net effect is modestly negative in the short term, potentially positive long-term.

Small renewable developers and landownersNegative Impact

Small developers and landowners face higher barriers to entry due to financial assurance and decommissioning requirements, while large developers with investment-grade credit gain advantage — net effect is negative for small players, positive for large firms.