Residential solar tax credits are changing after 2025
Although the One Big Beautiful Bill Act has eliminated the Residential Clean Energy Tax Credit (Section 25D)—also known as the Federal Investment Tax Credit (ITC)— the higher cost of electricity and the continued reduction in solar and battery equipment costs means residential solar and battery installations in Washington are still going strong and again proving to be an excellent return on investment!
To keep renewable energy even more affordable for Washington families, Northwest Electric & Solar is proud to offer the Energy Service Agreement (ESA). This Energy Service Agreement allows you to leverage commercial-grade tax credits through a strategic third-party structure, providing significant savings up front without the tax-season headache.
What is the Energy Service Agreement?
The Energy Service Agreement (ESA) is a 25-year Prepaid Lease that unlocks up to 35% in upfront savings as an immediate point-of-sale discount. Unlike the old residential credits, you don’t have to wait until tax season or worry about having enough personal tax liability to qualify.
The Best of Both Worlds With the ESA, you retain all the meaningful benefits of solar and battery systems—lower utility bills, grid independence, and backup power—while bypassing the loss of the residential tax credit.
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Seamless Experience: Your local NWES team still designs, builds, and supports your system.
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No Red Tape: There are no credit checks, no property liens, and no complex financing terms.
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Path to Ownership: You enjoy full use of the energy from day one, with a clear pathway to take full title ownership of the system starting in year six for little to no cost.
How It Works
The process is designed to be as simple as a cash purchase:
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The Discount: As the homeowner, you pay approximately 70% of the system cost.
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The Incentive: Our national asset partners cover the remaining 30% by claiming the commercial federal tax credits and accelerated depreciation—benefits that are passed directly to you as a lower upfront price.
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Milestone Payments: Your payments are made directly to Northwest Electric & Solar as we hit project milestones: design, installation, and final inspection.
Customer experience mirrors ownership
The Energy Service Agreement allows you to operate your solar, battery, or SPAN smart panel system with the same ease as a cash purchase. You will benefit from immediate energy savings through net-metered production that slashes your monthly utility bills, while integrated battery storage provides automatic resilience during power outages. Furthermore, the agreement is fully and freely transferable if you sell your home, adding the significant value of a “prepaid energy system” to your property without requiring any new credit approvals or underwriting for the buyer.
Benefit from net metered solar production that cuts down on power bills.
Protect your home from the inconvenience of power outages and stay comfortable as long as you need.
You’re responsible for system maintenance; cleaning the solar array or calling us for questions and troubleshooting.
It’s freely transferable if you sell your home—no new credit approval required.
25 year term length with an option to own
The ESA term length is 25 years with an option to transfer system ownership to you starting at year 6 through year 25 at little to no cost. You may also choose to have PE remove your solar energy system at the end of the term at no cost (~$4,000-$12,000 value).
Program eligibility
The ESA is available to residential homeowners in Washington who meet basic program and utility requirements. Because the system is owned by Participate Energy under a third-party structure, certain conditions apply.
Eligible Customers
The ESA is for residential customers who want to take advantage of the 48E commercial federal tax credit.
Eligible Services
Systems that can be purchased via the ESA include solar energy systems, battery storage systems, and SPAN smart panels.
Ineligible Services
As of now Fuel Cell and EV Chargers are not eligible for purchase under the ESA.
ESA FAQs
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What are the end of term options?
At the end of the term, customers can choose a fair market value buyout, extend the agreement, or have the system removed. However, our goal is to also provide the option for customers to take ownership of the system earlier in the term.
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What if I enroll in a utility incentive program like Flex Batteries or VPPs?
Depending on the agreement and any existing utility programs, the benefits of participating in utility-led programs will be either split 70/30, with the homeowner receiving 70%, or 100% for the homeowner.
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What happens when the home is sold?
The system is fully transferable. If you sell your home, the new buyer can easily take over the agreement with no risk, credit check, or underwriting required. All we ask is that a simple transfer notice is provided as part of the process.
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What about financing the prepayment?
We partner with several loan providers who can help finance the down payment portion of the prepayment. You can also work with your local lending source, as long as they’re an approved vendor.
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Who qualifies?
Property owners in supported markets with sites eligible for the federal Investment Tax Credit (ITC).
Our program is designed to unlock the benefits of solar, solar + storage, or battery-only solutions.
Note: Certain property types, such as condos, townhouses or mobile homes, may have limitations.
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What is the path to customer ownership?
You may exercise an option to take full title ownership of your system starting in year 6 through year 25. The purchase price is based on “fair-market value,” which is expected to be near $0 by year six. If you choose not to take ownership, the system can be removed at the end of the 25-year term at no cost to you.
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Who owns the system under a Energy Service Agreement?
To secure the commercial tax benefits (Section 48E) that individuals can no longer access, our national asset partner acts as the tax-equity owner for the first five years. They handle the “administrative” side—insurance and federal compliance—while you receive 100% of the power and protection. After this period, you have the option to purchase the system for a nominal fair-market value.
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Who monitors and maintains the system?
Participate Energy provides remote monitoring during the six-year term to ensure performance, while NWES handles installation, workmanship, and warranty service. You’ll have view-only access to your inverter monitoring app, just as with a standard purchase.
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What happens at the end of 25 years?
Customers may request system removal at no cost or purchase the system from Participate Energy for fair-market value at a number no less than $0 as specified in the Agreement.
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What does “fair-market value” mean?
This is the estimated worth of the system based on its age and condition at the time of the buyout. To comply with IRS rules and protect the validity of the tax credit, this value must remain flexible rather than a fixed “buy-price” today. However, standard depreciation typically brings this value to a negligible amount by the time the buyout window opens.
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What happens to my ESA energy system if I sell my home?
The system is fully transferable. The new buyer inherits a home with a “prepaid energy system.” There is no credit check or underwriting required for the buyer; we simply require a transfer notice to update the records.
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What happens if I need to cancel before installation?
Your project can be canceled under similar terms as a cash contract. You may be responsible only for costs already incurred—such as site assessment, design, permitting, or restocking fees. NWES does not typically retain sales commissions for canceled projects.
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Why choose the ESA instead of a loan or cash purchase?
The ESA is often the most efficient pathway because it provides an immediate discount. You don’t have to carry a large loan balance while waiting for a tax refund that may or may not come. You get the savings on day one, professional insurance for 25 years, and a clear path to ownership.