California Intelligence · 2026 Edition
California Solar Incentives in 2026: What’s Actually Left
The landscape has shifted from outright credits to strategic consumption. The federal residential credit has sunset, NEM 3.0 has reshaped the math, and the value now lives in storing your own energy. Here’s what genuinely remains — and how to act on it.
Reviewed June 2026 · Consult a licensed tax professional
01 / The Federal Landscape
The Federal Tax Credit Has Expired
The residential Section 25D credit expired on December 31, 2025. For 2026, there is no federal credit for homeowners who buy their system with cash or a loan.
There is still a path to capture federal value. Lease and power-purchase (PPA) arrangements use the commercial Section 48E credit — the company that owns the system claims it and reflects the benefit in the rate you pay. For many California homeowners, solar is now an asset-management decision rather than a tax play. Tax rules depend on your situation, so always consult a licensed tax professional.
Legislative Anchor
The Property-Tax Exclusion — Act Before 2027
California excludes solar energy systems from property-tax reassessment, so adding solar doesn’t raise your assessed value. Under SB 710 (signed October 2025), systems installed and operational before January 1, 2027 keep that exclusion until the property is sold. The exclusion is set to end after 2026 — which makes timing a real part of the decision.
02 / Consumption Logic
NEM 3.0: Why a Battery Now Matters in California
Since April 2023, California’s net-billing tariff has cut the credit for exporting solar to the grid by roughly 75% — from around $0.30/kWh under the old rules to roughly $0.05–0.08/kWh today. The era of selling power back at retail rates is over.
Store, don’t export
The value now lives in storing your own generation in a battery and using it during expensive evening hours, rather than sending it to the grid for a fraction of its worth.
Designed as solar + storage
That’s why premium California systems are now designed as solar and storage together from the start, not solar alone. See how this shapes pricing in our guide to premium solar cost.
Market Reality
SGIP Battery Rebates: Mostly Closed
The general and equity SGIP budgets for battery storage closed at the end of 2025. Only the income-qualified RSSE / AB 209 pathway remains, and it is largely waitlisted. We’re transparent about this: for most homeowners, planning should center on long-term savings, not a one-time rebate.
Equity Programs
Income-Qualified Programs (DAC-SASH & RSSE)
DAC-SASH provides up to $3 per watt through 2030 for income-qualified homeowners in disadvantaged communities. The Residential Solar and Storage Equity (RSSE) program supports income-qualified households and those at high outage risk. We check your eligibility for both as part of your consultation.
Local & Utility Programs
Programs from PG&E, SCE, SDG&E and individual municipalities vary widely by territory and change frequently. The only reliable way to know what applies to your address is a personalized review.
PG&E
High-usage tier avoidance and wildfire-resilience backup.
SCE
Optimizing for Southern California time-of-use windows.
SDG&E
Rate management in one of the country’s most expensive territories.
How to Maximize Value in 2026
Pair solar with storage
Under NEM 3.0, exported energy is worth far less than the energy you consume yourself. A battery lets you store daytime production and use it through the evening, where the real value now lives.
Install before 2027
Systems installed and operational before January 1, 2027 keep the property-tax exclusion until sale under SB 710. The exclusion is set to end after 2026 — timing matters.
Compare ownership vs. lease/PPA
With the residential Section 25D credit expired, a lease or PPA can still capture federal credit value through the commercial Section 48E credit, passed through in your rate. We model both paths for your situation.
Check income-qualified programs
If you may be eligible, DAC-SASH and RSSE can provide meaningful support. We confirm your eligibility as part of your consultation.
Common Inquiries
No — the residential Section 25D credit expired December 31, 2025. Lease and PPA arrangements can still capture value through the commercial Section 48E credit. Consult a licensed tax professional.
It's California's net-billing rule (in effect since 2023) that cut credits for exporting solar to the grid by roughly 75%, which is why pairing solar with a battery now produces better economics than solar alone.
The general SGIP budgets closed at the end of 2025. Only income-qualified pathways remain, and they are largely waitlisted.
No — California excludes solar from property-tax reassessment for systems installed and operational before January 1, 2027.
Possibly, through DAC-SASH or RSSE if you meet the income and location criteria. We'll check your eligibility during your consultation.
Want to know exactly what you qualify for?
Our consultants provide a comprehensive incentive review and architectural feasibility study for your California property — mapping exactly which programs apply to your address and how to time your install.