Solar in Washington State: A Tipping Point

Washingtonians have been paying extremely affordable rates for our power for decades. Our utility companies have access to a slew of hydroelectric dams that generate electricity with less cost than traditional fossil fuels. This has made it remarkably simple to do what the vast majority of us do when it comes to our power bill: ignore it. But if you're like me (and all my friends and family), ignoring any cost is no longer an option. We are entering year 4 of a new high inflation reality, and finding avenues to reduce costs has all of us combing through our monthly bank statements like an investigator for the financial crimes unit of the FBI for any costs to eliminate or reduce. But there are only so many streamer subscriptions to eliminate; maybe it's time to make a bigger change here in Washington. In this post, I make a case that Washingtonians are entering a convergence zone where increasingly higher electricity costs, coupled with affordable solar installations, and a robust incentive landscape mean that our power bill is no longer a cost to ignore.

Residential electricity rates for PSE customers have gone up by 41% in 6 years

Rising Energy Costs/Steady Solar Installation Costs

The price we pay for our energy is accelerating fast. While electricity rates here in Washington had stayed fairly steady from 2005 to 2019 with average annual increases of 2%, that has changed since 2019. The average residential rate in just these last six years has gone from $.122 cents per kWh to $.1627 cents per kWh in 2025 (after tax). PSE also just announced another rate increase for 2026 that will take average residential rates to $.1721 per kWh. This will represent a 41% jump in our energy prices in 6 years. So why is this happening? Well, there are a few factors, but the biggest is that most of our grid infrastructure is old! The average age of major grid components in Washington:

• Transmission Infrastructure: 40–70 years.

• Distribution Systems: 30–50 years old, with older systems in rural areas.

• Major Hydro Dams and Infrastructure: 70–90+ years old, with significant retrofits and upgrades over time.

The grid was not designed to last this long. Even if we weren't putting record strain on our grid with EV's, burgeoning AI data centers, and smart everything, the investment to upgrade the components in this infrastructure would be substantial. But coupled with the electrify everything era and the demand that places on our grid, you should expect the rate you pay for your electricity to continue to soar.

Take Action

So what can you do about it? The good news is you have agency; you are not completely at the mercy of your power company. Let's take a look at your options:

1. Make your home more efficient. If your rates are going up, you can use less power. You can look into efficiency upgrades like LED lights, smart thermostats, insulation, HVAC, windows, and water heaters. It's worth looking into all these options if you are looking for a smaller but shorter-term ROI.

2. Solar Panels: Solar panels provide the best medium- and long-term ROI because of how long they last and the fact that they represent the only option to produce your own power (wind turbines may be available under special circumstances).

   
   

The Case For Solar Installations

If your payback period on a solar installation here in Washington has historically been around 12-17 years, we are entering a period where that will shift down to 6-10 years considering the aforementioned electricity rate increases, inflationary trends, and reduced installation costs. A 6-10 year payback for a full offset solar installation compared to the 25-40 year lifetime of a typical solar installation in Western Washington makes the proposition hard to ignore. The potency of its value lies in the last 10–28 years of free power. This is enormous value when considering you could easily be paying 300% to 400% more than you are currently paying in 20 years.

The average cost per watt over the last 4 years for a solar installation in Washington State has remained steady at around $2.63

A Payback Example

The average price per watt (PPW) for solar installations has remained steady at around $2.63 over the past four years.

This means that a typical 5kW solar system costs about $13,150 before incentives (5kW × $2.63). After applying the 30% Federal Tax Credit, the net cost drops to $9,206.

If your electricity rate averages $0.24 per kWh over the next 10 years (which is a cautious estimate), your system could pay for itself in about 7.67 years. Here's how:

• A 5kW system typically produces 5,000 kWh per year.

• At $0.24 per kWh, that saves you $1,200 per year on electricity.

• Divide the net cost ($9,206) by the annual savings ($1,200), and you get a payback period of 7.67 years.

After that, your solar system continues generating free electricity, helping you save even more in the long run!

Why Now?

On top of rising electricity rates and steady installation costs, Washington still has a maximally robust incentive landscape to help make the investment in solar worth it. A list of those incentives are:

1. Net Metering 1.0: With a grid-tied solar installation, your utility will credit you on a one-to-one basis for what your panels overproduce in the summer so that you can apply those credits to your winter bills when your panels won't be producing enough to offset your full electric bill.

2. Federal Tax Credit: A tax credit that offsets 30% of the total cost of your installation. If you don't have the tax liability to recoup the full value of the tax credit in year one after your installation, you can roll over your unused portion each year until 2032.

3. No Sales Tax: Buyers of PV installations in Washington State up to 100 kW will not pay sales tax.

4. No cash-down financing: Not all buyers will be able to pay for their solar installations with cash. Getting access to no cash down and low APR financing means homeowners should not feel constrained if they want to look into a solar installation.

Note***Many of these incentives are subject to legislative changes or utility policy changes that are currently under review. While they could be changed for the worse, they almost certainly won't get better.

Not For Everyone

Solar is not for everyone here in Washington State. Some common scenarios where solar would not make sense for your home are:

1. Your home is heavily blocked by shade.

2. Your home does not have an open south, east, or west-facing roof orientation.

3. The condition of your roof is poor (you would very likely want to fix or replace your roof prior to installing solar).

   
   

Conclusion

Accelerating electrification demand coupled with an aging grid infrastructure is going to result in increasingly higher prices for electricity consumers in the state of Washington. This is not debatable. The best options for reducing these costs are using less power and/or utilizing an alternative power source. Solar installations remain the most viable option for those homeowners who want to find an alternative source of power to mitigate these high costs. With a shorter payback period, a full incentive landscape (for now), steady installation costs, and a high ROI value even if you decide to sell your home, it makes sense to see if solar makes sense for your home.

If you are a homeowner in Washington, you should at least explore the option of getting solar purely on a financial basis. The warrantied value (savings) of even a small 5 kW installation is between $30,000 and $50,000. This is not just available to solar buyers who stay in their home for the duration of their solar system's life, but also to those homeowners who sell their home.

The Offer

I want to help you. Figuring out if your home is a good fit for solar and navigating the process of finding a fair price with a reputable installer can feel overwhelming. I am a veteran of the solar industry here in Washington, and I want to offer you 2 services:

1. A free assessment on if solar makes sense for your home.

2. A fair price assessment on what you should expect to pay for your solar installation if it does.

I specialize in getting homeowners affordable solar installations with highly reputable installers. But if your home is not a good fit for solar, I will tell you. It's really that simple. All I need from you is a power bill and for you to fill out your information here.