Net metering is one of the main incentives for going solar in Washington State. When you produce more electricity than you use, your solar system sends it back to the grid. Your utility provider credits you for this extra energy, allowing you to apply it to future electric bills. Currently, net metering in Washington State has a 1:1 rate. For every 1 kWh of electricity you send back to the grid, you get 1 kWh of credit.
1:1 net metering has worked well for nearly three decades, but its future is now in question. As ratepayers, utility companies, and policymakers reevaluate the value that solar provides to the grid, Washington State’s net metering may change. Here’s the current state of affairs, what changes may be coming, and why it’s better to go solar sooner rather than later.
How Net Metering Works
Net metering is a billing arrangement between solar customers and their utility companies. Here’s how it works:
- When your solar system produces more electricity than you need, it sends the excess power to the electric grid.
- A bi-directional electric meter keeps track of the electricity you export to the grid. Your utility will swap your current electric meter out for a bi-directional meter when you install solar panels.
- If your solar panels produce more electricity than you use from the electric grid in a given billing period, you will be credited by your utility company for the net excess kWh. The credit will appear on your bill for the following period. You can use these credits to offset the cost of electricity you buy from the grid.
- Your credits roll over from month to month, but your account is zeroed out once a year if there is any credit leftover on March 31st, which can be avoided with expert system sizing.
Current Net Metering Policy in Washington State
The current net metering policy in Washington was enacted in 1998 and revised in 2019. Under this legislation, all utilities must offer net metering for solar energy systems with a capacity of up to 100 kW. Nearly all residential and most commercial systems fall within this capacity limit.
Solar customers who participate in net metering must also be credited at the full retail rate for electricity. For every kWh of excess solar energy that you export to the grid, you are credited with a kWh to use later.
This 1:1 rate structure is what makes Washington’s net metering policy so valuable. It allows you to bank a significant number of kWh in the summer, when the days are longer, and use them to offset your higher electricity bills in the winter, when solar generation is lower.
Why Would Washington State Solar Net Metering Rates Change?
The number of solar systems across the state has risen dramatically since the net metering program was first established nearly 30 years ago. Some utilities and ratepayers argue that non-solar customers bear the financial burden of maintaining the grid while solar customers reap the benefits, a concept called “cost-shifting.” As such, they believe the 1:1 rate is outdated.
When Washington State’s net metering was first enacted, limits were set. Utilities only have to offer the full 1:1 retail rate for electricity until either June 30, 2029, or until their total net metering capacity reaches 4% of the peak load in 1996, whichever comes first. Afterwards, they can voluntarily offer the 1:1 rate, or another rate that’s been officially determined by policy. Currently, PSE net metering and other utilities are over the 4% capacity, but since an alternative rate schedule has not been established, they are still offering a 1:1 rate.
Are Changes Coming?
Until another rate policy is in place, utilities are continuing to offer 1:1 net metering. However, this can change. California has made drastic changes to its net metering policy, lowering compensation to $0.02-$0.03 per kWh. Since California has been a national leader in solar energy for years, its decisions influence policy changes in other states. Right now, there is some concern that utilities in other states, including Washington, could see the policy change as a win and lobby to pass similar legislation.
To reevaluate the value of solar and explore the evidence of cost shifting, the Washington Department of Commerce has contracted the Washington State Academy of Sciences (WSAS) to conduct a multi-phase study with recommendations for future compensation methodologies. It involves:
- Phase 1 (Complete): Gathering information and perspective from interested parties, including utilities, utility regulators, the solar industry, and advocacy groups.
- Phase 2 (In Progress): Identifying and valuing the benefits that solar provides to the economy, society, and environment. Using this information, WSAS will develop methods for estimating solar value that can be used to inform net metering rate change policies.
- Final Report (Fall 2026): WSAS will release a report detailing findings, valuation methods, and example scenarios.
The Washington Solar Industries Association (WASEIA) is actively working to shape the study so that it reflects the facts of solar’s benefits and net metering policy.
Is Net Metering Going Away in Washington State?
It’s unlikely to go away completely. Whether it maintains a 1:1 rate schedule or changes based on WSAS’s findings is yet to be determined. That being said, if you’re considering installing solar panels, the safest option is to do so now. Solar customers who enroll in net metering at the 1:1 rate are typically grandfathered into it.
Cascadia Solar is a highly experienced, local solar company serving residential and commercial customers on the Olympic and Kitsap Peninsulas in Washington State. As the solar division of Frederickson Electric, we’ve been serving the community for over 50 years. Our team is here to answer any questions you have about installing solar panels in Washington and help you make the best decision for your home or business.
