Thinking About Solar? Here’s What’s About to Change After 2025.
If you’re considering switching to solar, installing a battery backup, or expanding your system, you’re not alone. You may also be hearing mixed messages about whether now is the right time to make the move. With policy shifts on the horizon and solar incentives changing, it’s natural to feel uncertain. Three big questions are at the top of mind for many Washington homeowners and businesses thinking about solar:
- Is the federal solar tax credit going away?
- Is PSE Net Metering changing?
- How much more are electricity rates going to go up?
The short answer: Next year will bring major changes to solar, but the 30% tax credit and current net metering incentives are available for any residential or commercial system completed by December 31, 2025, and we all know electricity rates are projected to continue rising. Let’s unpack what’s happening…
1. The Future of the Solar Tax Credits*
Residential (25D): For years, the Residential Clean Energy Credit has made solar and batteries more affordable by providing homeowners 30% of the cost of their system as a federal tax credit. Draft legislation released by the Senate Finance Committee for the “One Big Beautiful Bill” on Monday, June 16th, terminates that residential tax credit 180 days after the bill passes. While there are still more negotiations, this is the best-case scenario to come out of the process thus far.
Commercial (48E): Commercial solar and battery projects have been eligible for a tax credit of 30% of the cost of the system. The Inflation Reduction Act also created 10% bonus tax credit adders for projects located in Whatcom or Skagit counties (“Energy Communities”) and for projects that use a certain percentage of equipment that meet Domestic Content Requirements.
As of June 16, 2025, the draft Senate bill phases down credit for commercial solar projects, with those that commence construction in 2026 only eligible for 60% of the credit, those starting in 2027 for 20%, and those starting after 2027 ineligible for the credit. Commercial battery projects will be phased down to 75% value for projects beginning construction in 2034, 50% in 2035, and 0% after 2035. It’s important that “commence construction” can be triggered by paying a minimum of 5% of the total cost of the system; physical construction is not required.
Ecotech Solar is standing with Industry groups, including WASEIA (Washington Solar Energy Industries Association), to try and preserve the credit for homeowners and businesses, but the future is uncertain. The bill could be passed and signed into law as early as July.
What’s certain:
The full 30% federal tax credit for residential and commercial systems can still be claimed if they are installed before the end of 2025. Our schedule is filling up quickly, but we will do everything we can to ensure as many homes and businesses as possible get systems installed before the tax credit goes away.
*For tax-related questions, individuals should consult with a licensed tax professional. Ecotech Solar is not authorized to provide tax advisory services.
2. Changes Coming to PSE Net Metering
If you’re a Puget Sound Energy customer, you may have heard that Net Metering could be changing. This is the system that allows you to earn energy credits for extra solar power you send back to the grid.
PSE currently offers 1-to-1 net metering, which means you get full credit for every kilowatt-hour of energy your system exports, but that is expected to change for anyone installing or expanding their system. Details aren’t clear, but future changes to the program will likely have lower rates for excess energy sent back to the grid, reducing the financial return on your solar investment.
What’s certain:
The existing 1-to-1 Net Metering program remains in place through at least 2025. Our schedule is filling up quickly, and we will do everything we can to ensure as many people as possible get systems installed before net metering changes.
3. How Much More Are Electricity Rates Going to Rise?
Electricity rates in Washington—and across the country—have been steadily increasing. For Puget Sound Energy (PSE) customers, the cost of electricity continues to rise, and is projected to keep climbing with no built-in cap. According to the Washington Utilities and Transportation Commission, a typical PSE residential customer in WA using 800 kWh/month in 2020 paid a little over $80/month for their electric bill. In 2025, the same customer is expected to pay over $122/month and in 2026, another increase of $7.67 (6.3%) is projected, bringing the average bill to almost $130/month. That’s an increase of over 62% in six years.
What’s certain:
Installing solar now helps lock in your energy costs for decades to come. With a well-sized system, you can significantly reduce or even eliminate your electric bill and protect yourself from future rate hikes.
Should You Wait?
Waiting to make any decisions might feel safer when things feel overwhelming or uncertain, but in this case, locking in this year’s solar incentives is the surest bet. Completing a solar installation in 2025 means:
- Claiming the full 30% federal tax credit
- Enrolling in PSE’s current 1:1 Net Metering program
- Savings on your electric bill ASAP
The Bottom Line
There’s a lot in flux when it comes to solar policy right now, and time is running out to act under the most favorable terms. If you’re on the fence, now’s the time to explore your options and ask questions. Our team is here to help you navigate these changes and help you meet your goals.
Want to stay informed? Sign up for our monthly newsletter, Sunny Side Up, where we will continue to update folks on the latest policy developments.
