Puget Sound Energy Electric Rates Are Soaring — Here’s Why I’m Smiling

In January, Puget Sound Energy (PSE) got approval to raise electricity rates by 18.6% over two years, beginning with a 12% increase to the average PSE customer’s bill in 2025.

This is a significant rate hike, and one that many PSE customers will feel when they open their bills this summer. But as a PSE customer myself, I couldn’t be more pleased with the news. Thanks to the solar panels installed on my roof, rising electricity rates increase my savings outlook, not my monthly expenses.

How PSE Rate Hikes Accelerate My Solar Savings

When I bought my solar system in 2022, I knew I was signing up for a long-term investment. With cloudy winters and cheap grid electricity, it takes more panels and more time to see a return on investment for rooftop solar in Washington than in most other states. In fact, my initial savings calculations showed a 14-15 year payback period based on electricity rates rising 3.5% per year on average, as they have historically.

But since my solar panels were installed, PSE rates have been rising much faster than 3.5% per year. And with the recently approved 18.6% rate increase for 2025 and 2026, I’m expecting to break even at least 2-3 years sooner and save at least $10,000 more over the 25-year warrantied life of my solar system. (That’s with the conservative assumption that rate hikes will normalize back to 3.5% per year after 2026).

Puget Sound Energy Rate Hikes Since 2023

There’s plenty of reason to believe that PSE rates will continue their steep climb and my solar savings outlook will continue to improve. As a regulated utility, PSE makes money by spending money to build and maintain the electrical grid. And, in order to comply with the state’s clean energy goals, PSE needs to retire natural gas and coal plants and build an extraordinary amount of renewable energy generation by 2030.

That’s an expensive task — and new tariffs implemented in 2025 threaten to increase the cost of the materials required to do it. In order to maintain reliable electricity service — and preserve their profit margin — PSE will more than likely continue rising electricity rates faster than historical averages.

Explore Your Solar Savings Potential in Washington State

If you’re interested in powering your home with solar, 2025 is absolutely the best time to explore options for your home. PSE rates are rising fast and are likely to continue climbing throughout the decade.

Additionally, solar systems installed in 2025 may be the last to qualify for a 30% federal solar tax credit and Washington still offers 1:1 net metering that credits you for your excess solar power at the same rate you buy electricity from PSE.

Connect with a solar.com Energy Advisor to explore your home’s savings potential.