State solar guide
California runs two distinct net-metering systems: LADWP and SMUD offer full retail credits; SCE, PG&E, and SDG&E operate NEM 3.0 at roughly $0.05 to $0.08 per kWh for exports. The federal residential credit is gone. Here is what still makes California solar worthwhile in 2026.
Sources: U.S. EIA Electric Power Monthly, Q1 2026 blended residential average (SCE/PG&E/SDG&E/LADWP/SMUD combined). Individual utility rates vary significantly. | NREL PVWatts (San Francisco 4.9-5.3, Los Angeles 5.5, San Diego 5.7, Sacramento 5.2-5.4) | Lawrence Berkeley National Laboratory Tracking the Sun 2025 (California installed median, before incentives) | Federal residential credit: Section 25D expired December 31, 2025, H.R.1 (One Big Beautiful Bill Act).
Net metering
California operates two distinct net-metering regimes depending on your utility. SCE, PG&E, and SDG&E customers who applied after April 14, 2023 are on Net Energy Metering 3.0 (NEM 3.0): exported solar earns roughly $0.05 to $0.08 per kWh in export credits, well below the retail rate of $0.28 to $0.54 per kWh depending on time of use. LADWP (Los Angeles Department of Water and Power) and SMUD (Sacramento Municipal Utility District) are municipal utilities not under CPUC jurisdiction and still offer full retail net metering: exports credited at the full retail rate.
SDG&E retail rates now exceed $0.50 per kWh at peak, making the NEM 3.0 export gap especially significant for San Diego customers. Battery storage substantially improves economics under NEM 3.0 by shifting self-consumption and reducing reliance on low-value exports. LADWP full retail credit averages $0.22 to $0.37 per kWh depending on the tier.
Program: NEM 3.0 (SCE, PG&E, SDG&E) / Full Retail (LADWP, SMUD). Last verified: June 1, 2026. DSIRE source (opens in new tab).
LADWP and SMUD: Full retail net metering
Los Angeles Department of Water and Power and Sacramento Municipal Utility District are not under CPUC jurisdiction and continue offering full retail net metering. LADWP credits exports at $0.22 to $0.37 per kWh. Significantly stronger export economics than NEM 3.0.
SCE, PG&E, SDG&E: NEM 3.0 export credits
New applicants after April 14, 2023 are on NEM 3.0: exports earn roughly $0.05 to $0.08 per kWh. Battery storage substantially improves economics by maximizing self-consumption and reducing low-value exports.
January 2027 export adder lock-in deadline
A January 2027 NEM 3.0 export adder lock-in applies: customers who interconnect before that date lock in the current higher export adder rate, which increases export value. Interconnecting before January 2027 is a genuine, locally relevant deadline for California IOU customers.
State incentive stack
The federal residential credit expired December 31, 2025. The programs below are what remains for California homeowners. Amounts and availability change; every program is date-stamped and linked to its DSIRE source.
California property-tax exclusion sunsets December 31, 2026
California exempts the added home value from a solar installation from property tax reassessment. This exclusion is scheduled to expire December 31, 2026 under the current legislative sunset. Systems installed and permitted before that date are expected to qualify for the exclusion through the life of the system. Confirm current legislative status with your tax advisor.
Federal residential solar credit (Section 25D): expired. The Section 25D residential investment tax credit expired December 31, 2025. The residential credit rate is 0%. State and local incentives below may still significantly reduce your net system cost. Commercial systems still qualify for Section 48E (30%).
| Program | Benefit | Eligibility | Status | Source |
|---|---|---|---|---|
| Self-Generation Incentive Program (SGIP) - General Equity Residential Rebate (battery storage) General equity residential tier on waitlist as of June 2026. Verify current reservation status with your utility or advisor before proceeding. | Varies by utility and program step; contact utility for current step price Rebate for battery storage systems installed in California IOU service territories. General residential tier currently on waitlist; equity tier prioritizes low-income and high fire-threat district customers. | California IOU (SCE, PG&E, SDG&E, SoCalGas) customers. Battery paired with solar or standalone. Income or location requirements for equity tier. | Waitlisted | DSIRE (opens in new tab) |
| SGIP - Equity Residential (Low-Income / HFTD) Rebate (battery storage) Verify current available capacity and income thresholds with your IOU before relying on this amount. | Up to $1,000 per kWh of usable battery capacity (verify current step) Higher rebate rate for SGIP participants in high fire-threat districts or meeting income requirements. Prioritized over general equity tier. | Must reside in a CPUC-designated High Fire Threat District (HFTD) or meet SGIP equity income thresholds. IOU territory only. | Limited | DSIRE (opens in new tab) |
| California Solar Property Tax Exclusion Property tax exclusion Scheduled sunset December 31, 2026. Legislative extension possible but not confirmed. Install and permit before December 31, 2026 to maximize the chance of qualifying. | Full appraised-value increase excluded from property tax base (value varies by system size and local assessor) Exempts the added home value from a qualifying solar installation from property tax reassessment. Scheduled to expire December 31, 2026 under current law. | California residential or commercial property. System must be installed and permitted before sunset date. Confirm current status with your county assessor. | Threatened | DSIRE (opens in new tab) |
| PG&E PowerPair (Solar + Battery Rebate) Rebate (solar + battery paired) Funding allocated in program steps. Verify current availability and rebate level before signing a solar-plus-storage contract. | Up to $1,000 per kWh of battery capacity (verify current program step) PG&E territory rebate for customers who install both solar and a battery storage system simultaneously. Encourages customer-owned storage to support grid stability. | PG&E residential customers installing new solar and battery together. Contact PG&E for enrollment. | Limited | DSIRE (opens in new tab) |
| HEAR - Home Energy Rebates (IRA Title III) - California Implementation Federal rebate (state-administered) HEAR availability and enrollment status changes by CEC program phase. Verify current open enrollment and contractor participation before proceeding. As of June 2026, some income tiers have waitlists or closed intake. | Up to $14,000 per household for qualifying upgrades (income-stratified). Solar panels not covered under HEAR directly. The High-Efficiency Electric Home Rebate Act (HEAR) and HOMES program rebates are funded under the Inflation Reduction Act and administered at the state level by CEC. California received its allocation in 2024 and opened enrollment in phases. Point-of-sale rebates cover qualifying heat pumps, heat pump water heaters, insulation, and electrical panel upgrades. Solar panels are not directly covered. HEAR rebate status varies by program phase and income tier. | California residents. Income-stratified: low-to-moderate income households receive higher rebate levels. Must use a participating contractor enrolled with the CEC program. | Limited | DSIRE (opens in new tab) |
| LADWP Solar Incentive Program Rebate (residential solar) Verify current LADWP incentive program availability and amounts directly with LADWP or your advisor before relying on any incentive. | Varies by program budget cycle. Verify the current amount with LADWP. LADWP offers periodic incentive programs for residential solar customers in its service territory. Program availability and amounts change by budget cycle. | LADWP residential customers. May require system inspection and interconnection approval. | Pending | DSIRE (opens in new tab) |
Data last verified June 1, 2026. Incentive programs change; verify current amounts and availability at dsireusa.org (opens in new tab) before committing to a project.
Battery storage incentives in California
Self-Generation Incentive Program (SGIP) is the primary battery incentive in California. The general equity residential tier is open on a waitlist basis. PG&E customers may also access the PowerPair program (paired solar and storage rebate). See incentives table below for current status.
Savings example
This example uses real California market data. No federal residential credit is applied. Figures are illustrative; your in-home assessment uses your actual utility bills and the current rate schedule for your specific utility.
Annual production estimated at 11,000 kWh based on NREL PVWatts for Los Angeles at 5.5 peak sun hours. Assumes 70% self-consumption at $0.30/kWh blended retail value plus 30% exported at $0.06/kWh NEM 3.0 export credit. Utility rate escalation at 3% annually. System price at California market average. Federal residential credit: $0 (expired). Figures are illustrative; your in-home assessment will use your actual bills and utility rate schedule.
California SCE customer under NEM 3.0 (illustrative)
Illustrative example. Federal residential credit: $0 (Section 25D expired December 31, 2025). Your estimate will use your actual utility bills and current rate schedule.
Permitting
AB 1124 (signed September 2023) caps solar permit fees at $450 for residential systems in California. SolarAPP+ automated permit approval is adopted by roughly 200 California jurisdictions as of 2026, enabling same-day permit issuance in participating cities. Permit timelines for non-SolarAPP+ jurisdictions average 2 to 6 weeks. Contract to energization typically runs 8 to 16 weeks statewide.
Permit timelines vary by jurisdiction. LA DBS (Los Angeles Department of Building and Safety), SDPD, and smaller county AHJs (Authority Having Jurisdiction) each have different queues. SolarAPP+ adoption reduces permit wait to hours in participating cities.
Commercial solar in California
The commercial solar credit (Section 48E, 30 percent) remains available for qualifying commercial projects. Construction must begin by July 4, 2026 to qualify for the full placed-in-service window. Combined with MACRS accelerated depreciation and 100 percent first-year bonus depreciation, the combined first-year federal benefit can reach 45 to 55 percent of project cost for many California business owners. Direct Pay is also available for nonprofits, municipalities, and other tax-exempt entities.
Commercial solar overviewCommercial solar projects must begin construction by July 4, 2026 to qualify for the 30 percent Section 48E federal tax credit. After that date, the system must be placed in service by December 31, 2027.
Get a Free California Commercial AssessmentGet accurate solar numbers for your California home.
We run the math for your specific utility, your net-metering rate, and the 2026 incentives that apply to your address. No federal residential credit assumed. No pressure.
Frequently asked
Every answer is specific to California: your utility rules, your incentives, your net-metering regime. No generic boilerplate.
California quick reference
Sources: CPUC NEM 3.0 tariff (verified June 2026); SGIP program status via SCE/PG&E/SDG&E (June 2026); California Revenue and Taxation Code Section 73 (property tax exclusion); AB 1124 (2023). Verify current program terms before relying on any figure.
California markets
Each California metro has its own utility, net-metering rate, and permitting timeline. Click through for city-specific data.
LADWP / SCE
Dual-utility split: LADWP full retail vs SCE NEM 3.0
Los Angeles guideSDG&E
Highest continental residential rates; NEM 3.0 + battery incentives
San Diego guidePG&E
High tech adoption, NEM 3.0, AB 1124 permit cap applies
San Jose guideSMUD / PG&E
SMUD offers full retail net metering unlike PG&E NEM 3.0
Sacramento guidePG&E
High shade risk, NEM 3.0, strong PG&E rates; roof assessment critical
San Francisco guidePG&E
Valley heat load, high AC demand, NEM 3.0 export rates apply
Fresno guideA free in-home assessment runs the real numbers for your utility rate, your net-metering rate, and the 2026 incentives that apply to your address. No federal residential credit assumed. No pressure.
