Solar Incentives in California (2026)
The 30% federal Residential Clean Energy Credit expired on December 31, 2025, so homeowners who buy a system in California in 2026 no longer receive a federal tax credit. That makes California's state and utility incentives — and its net-metering rules — the main levers for lowering cost and shortening payback today.
Federal tax credit (ended for 2026 purchases)
The 30% federal credit (Section 25D) was repealed by the 2025 budget law and is no longer available for systems placed in service after December 31, 2025. If your system was installed and operating by the end of 2025, you can still claim the 30% credit on your 2025 return. The one remaining federal route in 2026 is a third-party-owned system: with a solar lease or PPA, the company that owns the panels can claim the separate business clean-energy credit (Section 48E, available through 2027) and may pass part of those savings to you through lower payments — though you won't own the system. Consult a tax professional for your situation.
California state & utility incentives
| Incentive | What it offers |
|---|---|
| SGIP battery rebate | Self-Generation Incentive Program rebates for home battery storage, with higher amounts for low-income and high-fire-risk areas. |
| Property tax exclusion | Active solar systems are excluded from property tax assessment, so going solar doesn't raise your property taxes. |
| Local utility programs | Some municipal utilities (e.g., LADWP, SMUD) offer additional rebates — check your provider. |
With the 30% federal credit expired (Dec 2025) and no state solar tax credit, SGIP battery rebates and net billing are California's main remaining incentives; a lease or PPA can still capture a federal benefit through the installer.
Net metering in California
Net billing (NEM 3.0) — exports credited near wholesale rates, which makes adding battery storage far more valuable than under older net metering.
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Solar panel cost by city →Frequently asked questions
- What solar incentives are available in California?
- The 30% federal Residential Clean Energy Credit expired December 31, 2025, so homeowners who buy in 2026 no longer receive it. California still offers SGIP battery rebate, Property tax exclusion, Local utility programs, plus net metering. A lease or PPA can still capture a federal benefit through the installer.
- Is there still a federal solar tax credit in 2026?
- Not for homeowners who buy a system — Section 25D expired at the end of 2025 under the 2025 budget law. The only remaining federal route is a third-party-owned system (lease or PPA), where the installer claims the business clean-energy credit (Section 48E, available through 2027) and may pass part of the savings to you.
- Does California have net metering?
- Net billing (NEM 3.0) — exports credited near wholesale rates, which makes adding battery storage far more valuable than under older net metering.
Incentive programs change often — verify current details on DSIRE and with your utility before deciding.