Is solar worth it in California in 2026?

How California pays for your solar power

Net billing (exports credited below retail). Since April 15, 2023, new solar customers of PG&E, SCE and SDG&E get hourly avoided-cost credits for exports, usually below the retail rate, under the CPUC Net Billing Tariff.

In the calculator, 40% of your solar output is used at home at the retail price and the rest is exported at about 20% of retail, so each solar kWh is worth 52% of the retail price on average. Change it if your utility pays more or less. Method

State or utility incentive	What it is worth
Property tax exclusion for new solar systems	Added solar is not reassessed, but only if the system is completed before Jan 1, 2027; it lasts until the home changes ownership
SGIP battery rebates (Self-Generation Incentive Program)	Rebates for home batteries; several residential budget steps show as closed or waitlisted on the program tracker as of Oct 7, 2026

How exports are credited

California no longer credits new solar exports at the full retail rate. On December 15, 2022, the California Public Utilities Commission (CPUC) adopted Decision 22-12-056, which created the Net Billing Tariff (NBT) as the successor to NEM 2.0. It applies to customers who submitted an interconnection application on or after April 15, 2023. Customers who applied by April 14, 2023 stayed on the older net metering rules.

The three big investor-owned utilities, PG&E, SCE and SDG&E, call the NBT the “Solar Billing Plan.” Solar output is first used on site. Surplus power sent to the grid earns an “Energy Export Credit” that reflects what that power is worth to the grid at that hour. The CPUC says this credit is usually lower than the retail rate but can rise above it on late summer evenings. Credits roll over month to month until the annual true-up.

A few other NBT features, from the CPUC’s page:

• Export adder: Residential PG&E and SCE customers who apply to interconnect before the end of 2027 receive slightly higher export credits for nine years. SDG&E customers are excluded, and so are customers who must add solar to meet the building code.
• Required rate plan: NBT customers must use a specific time-of-use rate with cheap off-peak and pricier on-peak energy (E-ELEC for PG&E, TOU-D-PRIME for SCE, EV-TOU-5 for SDG&E).
• Nine-year guarantee: The original customer is guaranteed the NBT tariff for nine years. Customers moving from an older NEM tariff do not get this.
• Monthly payment: Bills are due monthly instead of in one annual lump.

The CPUC page covers PG&E, SCE and SDG&E only. Customers of municipal utilities and others should confirm their own utility’s solar tariff.

State incentives in 2026

Property tax exclusion. Under California Revenue and Taxation Code section 73, adding an active solar energy system does not count as new construction, so it does not raise the home’s assessed value. SB 710, signed in October 2025, restates that a system that qualifies before January 1, 2027 keeps the exclusion until the property changes ownership. The Board of Equalization’s analysis notes that an earlier draft of SB 710 would have created a more limited exclusion after that date, but that language was removed before passage. Systems completed in 2027 or later are therefore not covered by the current statute unless the legislature acts. Anyone planning an install should treat the end of 2026 as the deadline for completion.

SGIP battery rebates. The Self-Generation Incentive Program offers rebates on home batteries. Its public tracker, checked on October 7, 2026, shows the Small Residential Storage budget steps as closed for four of the five program administrators, with small remaining balances, and some other residential budgets on waitlists. Amounts and availability change often, so the tracker and the program administrator are the places to confirm. Check the current rebate per kilowatt-hour with your program administrator before counting on it.

California has no state income tax credit for residential solar.

What it means for payback

Under net billing, the value of each kilowatt-hour depends on when it is used. Power consumed in the home as it is produced offsets the full retail price, while exported midday power earns much less. That shifts the economics toward using solar directly and toward adding a battery, which lets the household use or export stored energy in the evening when prices are higher. The CPUC reports that nearly 70 percent of NBT customers had paired a battery with solar by the end of 2024.

Other rules worth knowing

• Prevailing wage: Public Utilities Code section 769.2 requires contractors to pay prevailing wages on certain eligible renewable generation facilities using NEM or net billing tariffs, per the CPUC’s NEM Revisit page. Check the exact scope with the utility.
• Rules can change: The CPUC has planned a future evaluation of the NBT. Rates shown by utilities change annually, so confirm current export prices on the utility’s site before signing a contract.