Every claim on this page checked against primary sources on July 28, 2026

California solar incentives

California has no state solar tax credit and has not had one for years — the Franchise Tax Board lists all four of its solar credits under "repealed credits with carryover provisions." What California has instead is a property tax rule worth more than most states' credits, and it is about to end. Revenue and Taxation Code section 73 keeps a solar system from adding a cent to your assessed value, and it becomes inoperative on January 1, 2027. A system completed before that date keeps the exclusion until the house next changes hands; a system completed after it is assessable new construction, and in a state where property tax runs about 1% of assessed value every year, that is a permanent cost rather than a one-time one. Everything else here is smaller and more conditional: exports are paid under the net billing tariff rather than at retail, the general-population battery rebate is closed with barely a million dollars left in it statewide, and the real money is in equity programs you have to qualify for.

Why California has no solar tax credit, in the state's own words

Plenty of guides say California has no state solar credit. Almost none of them say how you would know, which matters, because a negative claim is the easiest kind to get wrong.

Here is how. The Franchise Tax Board publishes a Credit Table in the instructions to Schedule P (540), and it has two headed lists: "Current Credits" and "Repealed Credits with Carryover Provisions." The current list has thirty entries — California Competes, motion picture production, child and dependent care, low-income housing, research — and none of them is solar. All four solar entries are on the repealed list: Solar Energy, Solar Pump, Commercial Solar Electric System and Commercial Solar Energy, each pointing at FTB Form 3540, which is the form for credits that no longer exist. FTB, 2025 Instructions for Schedule P (540)

That is the administering agency enumerating its own credits and putting solar in the graveyard column. It also means one thing is still live: if you are carrying forward an unused credit from one of those repealed programs, Form 3540 is where it goes.

Why this page will not tell you California's export rate

Because there isn't one. Under the net billing tariff, exported energy is credited using the CPUC's Avoided Cost Calculator: a value that differs by hour and by month, averaged across the days in a month. It is not a tariff sheet with a number on it, the way Arizona's and Utah's are. The CPUC's own summary is that export compensation "is usually lower than the retail rate ... but can rise above the retail rate on late summer evenings." CPUC

That design is the whole point, and it changes what a good California system looks like:

• Storage stopped being optional. The value of a kilowatt-hour you hold until the late-summer evening peak can exceed the value of one you export at noon by a wide margin. The CPUC reports that nearly 70% of net billing customers had paired a battery with their solar by the end of 2024 — that is the market answering the tariff.
• You do not get to pick your rate plan. Net billing customers must take a specific electrification time-of-use rate — E-ELEC at PG&E, TOU-D-PRIME at SCE, EV-TOU-5 at SDG&E — with lower off-peak and higher on-peak prices than the ordinary tariffs.
• Oversizing is capped differently. Net billing allows a system up to your annual load plus 50% if you attest to the need, which is more headroom than NEM allowed — but headroom to export into a low-value hour is not the same as headroom worth paying for.

One number the CPUC does publish: whatever surplus is left at your annual true-up is cashed out as net surplus compensation at "approximately $0.02 to $0.03 per kWh." A system built to send power to the grid rather than to use it is, at the margin, selling at two to three cents.

If you already have NEM 1.0 or NEM 2.0, you are on a twenty-year clock

Both older tariffs are closed to new enrolments, but they were not cancelled for the people already on them. Under CPUC Decision 14-03-041, a customer- generator may remain on their NEM tariff for twenty years from the date they interconnected, or switch to the current tariff if they would rather.

Two things follow that are easy to miss. Switching is one-directional in substance — the net billing tariff's nine-year legacy guarantee is available only to "the original customer who causes a generation facility to be interconnected" under it, and the CPUC states plainly that customers who move to net billing from a previous NEM tariff are not eligible for that legacy period. And the twenty-year clock runs from interconnection, not from purchase of the house, so a home bought with an existing NEM 2.0 system carries however much of the twenty years is left.

The general battery rebate is closed, and the number is small

SGIP — the Self-Generation Incentive Program — is the mechanism through which California funds behind-the-meter storage, and it runs as a series of steps whose rates fall as budget is taken up. There are eleven budget categories. Only one of them, Small Residential Storage, is open to a household of any income.

As of the day this page was checked, that budget sat at Step 7 with a rate of 15 cents per watt-hour, had been at that step since February 18, 2025, and showed Step Status "Closed" at all four program administrators. The money still in it — about $1.8 million spread across the Center for Sustainable Energy, SCE, SoCalGas and PG&E — is not being reserved. SGIP Incentive Step Tracker

Meanwhile the Residential Solar and Storage Equity budget pays seven times as much per watt-hour and adds a per-watt solar incentive on top. That is not an accident of budgeting; it is a deliberate redirection of the program toward low-income households, and it is where nearly all remaining California incentive money now sits. If you qualify, the difference is enormous. If you do not, the honest answer is that California's rebate programs have very little for you.

Both figures move. The tracker is updated nightly, which is precisely why this site records the date it was read next to every number rather than publishing a figure and hoping.

California wrote the contract rules other states should copy

This is the part of the page a reader should take to a sales appointment.

Front page. Boldface. Sixteen point. Total cost including financing costs. The statute goes further: the contract and the disclosure must be written in the same language that was principally used in the oral sales presentation or the marketing material you were given, and the Contractors State License Board may require the document to spell out the impacts financing terms will have on the sale of your home, including any balloon payments or system relocation required if the contract is not assigned to the buyer.

Separately, the CPUC requires that solar providers submitting residential interconnection applications in PG&E, SCE, SDG&E, Bear Valley, PacifiCorp and Liberty territory collect your initials and signature on the California Solar Consumer Protection Guide, and give you time to read it before you sign. CPUC Solar Consumer Protection Guide The Guide itself names the tactic it exists to defeat: "Time is running out and you must quickly sign an electronic tablet to get solar." You are entitled by law to a printed version if you ask.

The irony of 2026 is that there genuinely is a deadline this year — the property tax one — and it is a real, statutory, published date rather than a closing technique. Ask to see the completion schedule in writing.

Ownership decides more in California than the brochures admit

Federal law now favours third-party ownership, because the credit that survived is the one companies claim. That story is here. California adds its own wrinkles on top, and they point in different directions:

• SGIP's storage budgets are paid to the customer and require you to own the system; a leased battery is a different conversation with the program administrator.
• DAC-SASH gets to "no cost" for most participants precisely through third-party ownership — GRID Alternatives closes the funding gap on roughly 90% of projects with a TPO model. Here, not owning the system is the mechanism, not the disqualification.
• The property tax exclusion attaches to the assessment of the property, and how it applies to a system the homeowner does not own is a question we did not find guidance on and are not going to guess at.

So are solar panels worth it in California in 2026?

California remains one of the best places in the country to own solar, for a reason that has nothing to do with incentives: electricity here is expensive, and every kilowatt-hour you generate and use yourself is a kilowatt-hour you do not buy at a high retail rate. That arithmetic did not change when net metering did.

What changed is the shape of the good system. Under the net billing tariff the value of an exported kilowatt-hour is set by the grid's need at that hour, and at the annual true-up surplus cashes out at two to three cents. So the system that pays in California in 2026 is sized to your own consumption, oriented toward using its own output, and paired with storage that can carry production into the evening — which is exactly what nearly 70% of net billing customers have already done.

And there is a genuine, dated reason not to drift. The property tax exclusion is the only broad state benefit left, it is worth roughly 1% of the system's assessed value every year for as long as you own the house, and it stops applying to anything completed on or after January 1, 2027. If you are going to do this, the arithmetic says complete it this year.

What this page does not cover yet

Being explicit about the edges is part of the method. Not yet verified, and therefore not claimed here:

• Sales tax on a residential solar installation. California taxes construction contracts through rules about who is the consumer of the materials rather than through a solar-specific exemption, and answering it properly needs the CDTFA's construction contractor regulations, which were not read this pass. We would rather leave the gap stated than print a confident guess.
• The actual export credit values. Each utility publishes hourly Avoided Cost Calculator schedules, and those are the operative numbers for a payback calculation. The mechanism is described above from the CPUC; the values were not read entry by entry.
• The value of the nine-year adder in cents per kilowatt- hour, and the difference between the CPUC's description of a nine-year customer entitlement and Legislative Counsel's description of an adder "available during the first 5 years of the successor tariff." Both are quoted in the data file; neither was reconciled against Decision 22-12-056 itself.
• How section 73 treats a leased or third-party-owned system. The statute addresses the assessment of the property; we found no guidance on systems the homeowner does not own.
• Municipal utilities. LADWP, SMUD, Imperial Irrigation District and the rest are outside CPUC jurisdiction, and none of their tariffs were read. If your bill does not come from PG&E, SCE or SDG&E, the net billing section above may not describe you at all — though LADWP does administer the SGIP equity budget for its own customers.
• SGIP income and location eligibility in detail, and DAC-SASH's income thresholds. Both live in program handbooks that were not read this pass.
• Whether a further SGIP Small Residential Storage step will open. The program's public announcements page was not reachable at the URL published on the SGIP site on the day this was checked.
• Pending legislation. AB 942 would have moved a home buyer off legacy net metering on purchase; it was amended and remains in committee. It is not law, so this page does not treat it as one.

Each of those is queued. When one is verified it will appear above with its own date, and the change will be listed in the record.