Is Solar Worth It Without the Solar Tax Credit?

Discover Why Solar is Worth it Without the Tax Credit

Think solar isn’t worth it without the tax credit? You might be surprised. With significant net metering changes and utility rate increases expected in Washington in 2026 and 2027, waiting to go solar will likely mean missing out on big long-term savings. Let’s dive into why solar still makes financial sense without the tax credit, and why going solar in 2026 might be the right move for you.

 

What happened to the Federal Solar Tax Credit?

The One Big Beautiful Bill (OBBB), signed in July 2025, eliminated the 30% federal tax credit (Section 25D) for homeowners who install solar and battery systems after December 31, 2025. As a result, many homeowners rushed to install solar before year’s end to secure the credit. Still, a significant number have chosen to move forward in 2026, even without the incentive. Why? One reason is Washington’s powerful 1:1 net metering program, which won’t be around forever.

 

Washington Net Metering Changes Coming Soon

As early as 2026, changes to the current 1:1 net metering policy in Washington are expected. Net metering plays a major role in the long-term financial return of a solar system, as it directly affects lifetime energy production and savings. Under the current 1:1 net metering policy, homeowners receive a credit on their utility bill for each excess kilowatt-hour (kWh) of solar energy produced and sent back to the grid. Each kWh is credited at the same rate they pay when purchasing electricity from their utility, in other words: a 1:1 credit.

While local utility companies have not yet formally announced their updated net metering policies, we can look to recent proposals for insight. PacifiCorp, a private utility serving eastern Washington, proposed changes that would reduce net metering benefits by nearly half. Although implementation of this proposal has been delayed until 2027, it’s an indicator of the direction in which utilities may be headed.

The key takeaway: waiting for the federal tax credit to return could mean missing out on substantial savings available under today’s net metering structure. The chart below illustrates how net metering changes can impact the overall cost and value of a typical home solar installation. Note: This is just an example and installation cost varies based on many factors including energy goals, panel selection, roof characteristics, optional add-ons, and more.

 

Category	Scenario 1: Tax Credit + 1:1 Net Metering	Scenario 2: No Tax Credit + 1:1 Net Metering	Scenario 3: No Tax Credit + 2:1 Net Metering
System size	34 panels	34 panels	45 panels* (to achieve 100% offset)
System cost (before tax credit)	$39,000	$39,000	~$50,000*
Tax credit (30%)	−$11,700	$0	$0
Net system cost	$27,300	$39,000	~$50,000*
Net metering structure	1:1	1:1	2:1
Annual usage offset	100%	100%	100%*
Panels added vs. base	0	0	+11

 

*Scenario 3 Notes: Under a 2:1 net metering structure, the original 34-panel system generates enough credits to offset approximately 75% of annual electricity usage (assuming 50% of a system’s annual offset is typically achieved through net metering credits, and the value of those credits is reduced by half under a 2:1 structure). To compensate for the reduced value of net metering and reach 100% annual offset, an additional 11 panels would be required. 

 

Key takeaways:

• The cost of waiting is roughly equivalent to the value of the former tax credit, assuming net metering shifts to approximately 2:1.

• This comparison does not account for future utility rate increases, which would further increase the cost of delaying installation.

 

Utility rate increases in 2026 and beyond

In the Seattle area, Seattle City Light has raised rates by roughly 80% over the past 10 years. Puget Sound Energy (PSE) increased rates by 14% in 2025 and announced an additional 12% hike starting in January 2026. 

Looking ahead, broader infrastructure policy is likely to push rates even higher. The OBBB incentivized major investments in infrastructure to support AI data centers. These facilities demand enormous amounts of electricity and require significant grid upgrades and ongoing maintenance. While utilities benefit from expanded demand, the cost of building and maintaining this infrastructure is ultimately passed on to homeowners through higher rates.

To put this into perspective, if you’re paying $2,000 per year for electricity today and your bills increase at a conservative average of 6% annually, your yearly electric bill will reach about $8,600 by year 25 (the typical lifespan of a solar system). Over those 25 years, you’ll pay approximately $110,000 to your utility. To offset the amount of power correlated to this annual electric bill, the typical solar system cost would cost around $35,000.

 

The hidden cost of waiting to go solar

If you delay going solar in hopes that a more progressive administration will reinstate the federal tax credit, you may be waiting longer than expected. There’s no guarantee a post-Trump administration will be willing to reverse the residential tax credit decision. In the meantime, powerful financial incentives like Washington state’s 1:1 net metering policy are expected to change meaningfully (or possibly be phased out altogether). 

Before deciding to bank on better solar policies in the future, make sure you fully understand what the delay is likely to cost you over time. Ask yourself: What’s the cost of waiting?

 

Get a free solar quote from a trusted Seattle installer

Ready to take advantage of existing Washington solar incentives and save big with solar? Get a free solar quote today. 

 

 

 

Author Bio:

Macie Mancini joined Solterra Solar as a Solar Design Consultant in 2025. She holds a Master of Science in Engineering Design Innovation with a focus on sustainable systems and products from Northwestern University. She brings deep, cross-disciplinary knowledge that enhances her solar designs—from circular economy principles to user-product interactions and green energy electromechanics. Macie excels at helping clients build custom solar solutions for their homes and communities. From designing arrays to ensuring clients understand their system, she delivers a highly personalized customer experience every step of the way.