California Solar Incentives, Tax Credits & Rebates 2026
State-program snapshot: 2026-01 · Federal status reviewed: 2026-08-06Cost Context
An illustrative 9.4 kW system using the historical observed average cost in California is $41,924. New federal residential credit for a 2026 installation: $0. Modeled annual savings before financing: $5,471.
Federal Residential Credit Status
Residential Clean Energy Credit
Ended for new 2026 systems0% for property placed in service in 2026
IRS guidance states that the 30% credit applied to qualified residential clean-energy property installed from 2022 through December 31, 2025. It is not available for property placed in service after that date.
Eligibility
No new residential credit for a system first placed in service in 2026. A previously earned unused credit may be eligible for carryforward under IRS rules.
Primary source
IRS Residential Clean Energy Credit guidance ↗California State Program Snapshot
Self-Generation Incentive Program (SGIP)
RebateVaries by storage capacity, typically $150-$1,000/kWh for battery storage
Rebate for installing energy storage systems paired with solar. Higher incentives available in equity and equity resiliency categories.
NEM 3.0 (Net Billing Tariff)
Net MeteringExport credits at avoided-cost rate, varies by time of use
New solar customers receive bill credits for excess energy exported to the grid at time-varying avoided cost rates. Battery storage strongly recommended.
California Solar Initiative (CSI) - Thermal
RebateUp to $1,875 for solar water heating
Rebates for installing solar water heating systems in residential buildings.
State and utility programs can change between reviews. Confirm eligibility, funding and deadlines with the administering agency or utility before relying on this snapshot.
Tax Exemptions
property tax Exemption
Solar installations are 100% exempt from property tax assessment increases under the Active Solar Energy Tax Exclusion through 2027.
sales tax Exemption
California does not exempt solar equipment from state sales tax.
Utility Programs
Pacific Gas & Electric (PG&E)
- NEM 3.0
- Time-of-Use rates
- EV + Solar bundled rates
Southern California Edison (SCE)
- NEM 3.0
- Clean Energy Optimization billing
San Diego Gas & Electric (SDG&E)
- NEM 3.0
- Power Your Drive EV integration
Highlights & Drawbacks
Highlights
- ✓SGIP storage rebates can offset battery costs significantly
- ✓Property tax exclusion protects home value
- ✓Strong installer competition keeps costs competitive
Drawbacks
- !No sales tax exemption on solar equipment
- !NEM 3.0 significantly reduced export credit values vs NEM 2.0
- !No state income tax credit for solar
State-program sources: DSIRE, state energy offices and utilities; snapshot dated 2026-01. Programs, funding and eligibility can change without notice. Federal residential status reviewed against IRS guidance on August 6, 2026.