California
California Solar & EV Incentives 2026 — Net Billing, SGIP & Income-Qualified EV Grants
California pairs net billing for solar exports (NEM 3.0) with income-qualified programs: the remaining SGIP battery budget and the Clean Cars 4 All and Driving Clean Assistance EV grants. Most SGIP budgets are now closed, and the federal solar and EV purchase credits ended in 2025.
4
Incentive categories
6
Program entries
34.74¢
Avg rate / kWh
15.9 yrs
Simple solar payback
$32,450
25-yr net solar savings
Excellent
Solar potential
Battery Incentives in California
Self-Generation Incentive Program (SGIP)
$1.10/Wh (income-qualified RSSE only)
As of October 6, 2026, SGIP's general-market, equity, and equity-resiliency residential storage budgets are closed to new applications. The only residential budget accepting applications is the income-qualified Residential Solar and Storage Equity (RSSE) budget for PG&E and SCE customers, at $1.10/Wh for storage installed with solar; other territories are waitlisted. Budgets fill and reopen in steps, so check the live program metrics before counting on a rebate.
Eligibility: Income-qualified PG&E or SCE customers installing storage with solar (RSSE budget); general-market applications are closed.
EV Incentives in California
Clean Cars 4 All
Up to $12,000 + up to $2,000 charging
Income-qualified program that scraps an older, higher-polluting vehicle and helps buy a new or used zero-emission vehicle or plug-in hybrid (or e-bike / transit alternatives). Up to $12,000 for a ZEV in a disadvantaged community, $10,000 elsewhere, plus up to $2,000 for a home charger or prepaid charge card. Offered through the South Coast, San Joaquin Valley, Bay Area, Sacramento Metro, and San Diego air districts. Income-qualified only. Funding and availability vary — confirm with CARB / your air district.
Eligibility: Household income at or below 300% of the Federal Poverty Level; must scrap a functional vehicle; must live in a participating air district (elsewhere, apply to DCAP).
Driving Clean Assistance Program (DCAP)
Up to $12,000 + up to $2,000 charging
Statewide, income-qualified purchase grant plus financing assistance. With a vehicle to scrap: up to $12,000 in a disadvantaged community or $10,000 elsewhere; without scrappage: up to $7,500. Each includes up to $2,000 for home charging or a prepaid charge card. You must apply and be approved before buying the vehicle. Income-qualified only. Funding and availability vary — confirm with CARB / the program administrator.
Eligibility: California residents with household income at or below 300% of the Federal Poverty Level; apply before purchase.
Closed programs: Clean Vehicle Rebate Project (CVRP) — closed 2023-11-08 (California Air Resources Board (CARB))
Solar Incentives in California
Net Billing Tariff (NEM 3.0)
Net billing (avoided-cost export credits)
California replaced retail net metering with the Net Billing Tariff (NEM 3.0) in April 2023. Exported solar is now credited at lower avoided-cost rates rather than the full retail rate, which makes pairing solar with a home battery far more valuable than export-only systems.
Eligibility: CA IOU customers (PG&E, SCE, SDG&E) with solar panels.
Active Solar Energy System New-Construction Exclusion
100% of added value excluded from assessment
New-construction assessment exclusion for the added value of an active solar energy system (Revenue & Taxation Code §73). Statutory sunset: January 1, 2027. Systems that qualify before then keep the exclusion until a change in ownership. This is an assessment exclusion, not a property-tax exemption.
Eligibility: Active solar energy systems completed before January 1, 2027 on California property.
Heat Pump Incentives in California
Federal HEAR Framework (State Availability Varies)
Statutory household cap up to $14,000
Federal law sets measure and household caps, but consumers can use rebates only where the state or territory program is active and funded. A listed cap is not an available award.
Eligibility: Income, equipment, project, state-program, and funding rules apply; confirm availability with the administering state program before purchase.
California (HEEHRA): single-family heat pump rebates are fully reserved statewide as of Feb 24, 2026 — new reservations go to a waitlist, and new income-verification applications are not being accepted. The multifamily track has paused new Stage 1 submissions while existing applications are processed.
Status as of 2026-02-24. Source: TECH Clean California (HEEHRA administrator for the California Energy Commission)
Get Free Solar Quotes for Your Home
Open the external EnergySage marketplace to request and compare itemized solar proposals.
Your estimated 25-year savings: $32,450
We are not affiliated with EnergySage and receive no commission or referral fee. The button opens an external site; review its terms and privacy policy.
Solar Policy & Local Utilities in California
Net Metering
Net billing (NEM 3.0)California replaced retail net metering with the Net Billing Tariff (NEM 3.0) in April 2023. Exported solar is now credited at lower avoided-cost rates rather than the full retail rate, which makes pairing solar with a home battery far more valuable than export-only systems.
Source: California Public Utilities Commission (CPUC)
Major Utilities
- Pacific Gas & Electric (PG&E)
- Southern California Edison (SCE)
- San Diego Gas & Electric (SDG&E)
California Solar Facts
- California has more installed solar capacity than any other U.S. state. (SEIA)
- Since 2020, California's Title 24 building code has required solar on most new homes. (California Energy Commission)
Last verified: 2026-06. Always confirm current terms with your utility or at DSIRE.
Is Solar Worth It in California?
Solar can still pay off in California, but net billing changed the math. With the highest average residential electricity rate in the lower 48 states (34.74¢/kWh in EIA data), every kWh you use on-site is valuable, yet exported solar earns only about 4¢/kWh. Our 8 kW planning example, which assumes about 35% of production is used on-site, pays back in about 15.9 years with $32,450 in 25-year net savings. Sizing to your own load, shifting usage to daytime, or adding a battery improves the result.
Nationally, EnergySage reports the average U.S. homeowner saves about $60,500 over 25 years by going solar, without the expired federal credit (page updated June 2026). Actual savings vary by state, electricity rate, export rules, and system size.
Key Advantage
California's high utility rates (34.74¢/kWh) make every self-consumed kWh of solar worth far more than in most states, even without the federal ITC (expired Dec 31, 2025).
Watch Out For
NEM 3.0 replaced retail-rate solar exports with avoided-cost export credits worth only about 4¢/kWh for a typical rooftop system, so exported solar adds little value. A battery or daytime load shifting is the main way to raise self-consumption.
Solar Cost & Savings in California (8 kW System)
| Item | Amount |
|---|---|
| Gross install cost | $31,920 |
| Net install cost | $31,920 |
| Annual energy savings | $2,013 |
| Simple payback period | 15.9 years |
| 25-year net savings | $32,450 |
The federal residential solar tax credit (Section 25D) is not available for expenditures after Dec 31, 2025 and is not included above. State and utility incentives may still apply and are listed separately.
* Planning example for an 8 kW system: $3.99/W installed (LBNL 2024 median for California), 5.8 peak sun hrs/day, one 20% system derate, 0.5%/yr panel degradation from year two, and 34.74¢/kWh escalating 2.5%/yr. Self-consumption 35% at the retail rate; the remaining 65% is exported and credited at 4.15¢/kWh (Self-consumption from NREL PVWatts hourly production matched to NREL ResStock California single-family hourly load; export credit from PG&E's 2026 Solar Billing Plan Energy Export Credit price sheet, weighted by exported energy (checked October 6, 2026)). Tax credits require eligibility and sufficient tax liability.
Get Free Solar Quotes for Your Home
Open the external EnergySage marketplace to request and compare itemized solar proposals.
Your estimated 25-year savings: $32,450
We are not affiliated with EnergySage and receive no commission or referral fee. The button opens an external site; review its terms and privacy policy.
How to Go Solar in California: Step-by-Step
- 1
Get your last 12 months of electricity bills
Find your total annual kWh usage. EIA's 2024 average for California homes was 503 kWh a month, about 6,000 kWh a year. Your own usage, not the average, determines your system size.
- 2
Calculate your system size
Divide annual kWh by (365 × 5.8 peak sun hours × 0.80 efficiency). Example: 8,000 kWh ÷ (365 × 5.8 × 0.8) = 4.7 kW minimum, round up to nearest panel count.
- 3
Get 3+ quotes from licensed contractors
Confirm each contractor holds an active California Contractors State License Board license (C-10 electrical or C-46 solar). Compare itemized $/W pricing against this guide's $3.99/W planning assumption, LBNL's 2024 median for host-owned California systems.
- 4
Check state and utility incentives
Visit DSIRE.org for current California solar and battery incentives. The federal 25D solar ITC expired Dec 31, 2025. If installed in 2025, file IRS Form 5695 with your 2025 tax return to claim it.
- 5
Check SGIP battery rebate availability
As of October 6, 2026, SGIP's general-market, equity, and equity-resiliency residential storage budgets are closed to new applications. The only residential budget accepting applications is the income-qualified Residential Solar and Storage Equity (RSSE) budget for PG&E and SCE customers, at $1.10/Wh for storage installed with solar; other territories are waitlisted. Your installer normally files the application; confirm eligibility before signing.
Frequently Asked Questions — Solar & Clean Energy in California
Is solar worth it in California in 2026?
It can be, but less than before net billing. In our planning model an 8 kW system saves about $2,013 in its first year, for a simple payback of about 15.9 years and $32,450 in 25-year net savings. That assumes about 35% of production offsets retail electricity at 34.74¢/kWh and the rest is exported at about 4¢/kWh, based on NREL hourly solar and household-load data and PG&E's 2026 export credit values. Using more of your solar on-site, sizing to your consumption, or adding a battery shortens payback. Note: The federal 25D solar ITC expired Dec 31, 2025 — consult a tax professional if you installed in 2025.
How much does solar cost in California in 2026?
Lawrence Berkeley National Laboratory's Tracking the Sun data put the median price of host-owned residential systems installed in California in 2024 at about $3.99/W before incentives, or about $31,920 for an 8 kW system. Nationally, cash purchases came in lower (about $3.5/W) and loan-financed systems higher (about $4.7/W). Quotes vary widely by installer, so compare several. The federal 25D ITC expired Dec 31, 2025. The SGIP battery rebate is now limited to income-qualified households, so most buyers should budget without it.
What solar incentives are available in California?
California homeowners can access: (1) the SGIP battery rebate, now limited to income-qualified PG&E and SCE customers installing storage with solar ($1.10/Wh, RSSE budget; general-market budgets closed as of October 2026), (2) the property-tax new-construction exclusion for the added value of a solar system (statutory sunset January 1, 2027; qualifying systems keep it until a change in ownership), (3) NEM 3.0 net billing with avoided-cost export credits. Note: The federal 25D solar ITC expired Dec 31, 2025 — check with a tax professional if you installed in 2025.
How does NEM 3.0 affect solar ROI in California?
The Net Billing Tariff (NEM 3.0, effective April 15, 2023) credits exported solar at CPUC Avoided Cost Calculator values that vary by hour and month and are well below the retail rate. Midday exports, when most solar is produced, are worth only a few cents per kWh; using PG&E's 2026 export values, the export-weighted average for a typical rooftop system is about 4¢/kWh. A battery lets you use midday solar in the evening instead of exporting it. Sources: CPUC, PG&E.
What size solar system does a California home need?
EIA reports that California homes used an average of 503 kWh a month in 2024, about 6,000 kWh a year, among the lowest of any state. With 5.8 peak sun hours and a 0.80 system-efficiency factor (20% losses), each 1,000 kWh of annual use needs about 0.6 kW, so 6,000 kWh needs roughly 3.5 kW. Single-family homes typically use more; NREL's ResStock model of California detached homes averages about 9,700 kWh a year, which works out to roughly 5.7 kW. Under net billing, exports earn far less than retail, so size to your own consumption plus planned loads such as an EV rather than to your roof space.
Does California have net metering in 2026?
California net metering status: Net billing (NEM 3.0). California replaced retail net metering with the Net Billing Tariff (NEM 3.0) in April 2023. Exported solar is now credited at lower avoided-cost rates rather than the full retail rate, which makes pairing solar with a home battery far more valuable than export-only systems. (Source: California Public Utilities Commission (CPUC).)
Which utilities in California offer solar programs?
The main electric utilities in California are Pacific Gas & Electric (PG&E), Southern California Edison (SCE), San Diego Gas & Electric (SDG&E). Confirm current offers with your utility and check DSIRE.org for California programs.
Recommended Products for California
Product examples are provided for comparison only. Confirm electrical compatibility, installer requirements, warranty terms, and any current utility incentive before purchase.
Calculate Your California Savings
The Solar ROI link preselects California's planning inputs, including the listed electricity rate (34.74¢/kWh). Other tools open with their own defaults; review every input before calculating.
Browse Other States
Data Sources & Methodology
Incentive data: DSIRE, U.S. DOE Home Energy Rebates, IRS residential credit guidance, and linked state program pages. Electricity rates: EIA Electric Power Monthly, Table 5.6.A (June 2026). Solar resource: NREL PVWatts reference with state-level planning inputs, not an address-specific API result. Installed price: LBNL Tracking the Sun (Residential systems installed in 2024), a median rather than a quote. The 2.5% annual rate change is a model assumption, not a forecast. Sources and methodology reviewed 2026-09-06. Always verify current amounts with the administering agency and utility.