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Solar incentives in California
What is actually on offer here in 2026 — the state incentive, the federal position, and the export rule, which is usually worth more than either.
The state incentive
None (SGIP applies to storage in some cases). California has no state solar tax credit. SGIP storage rebates are means- and location-tested.
The federal position
§25D, the 30% residential credit, expired for systems placed in service after 31 December 2025 — installed, not merely purchased. §48E did not expire on that schedule, and a company owning panels on your roof under a lease or PPA can still claim it. That asymmetry, not anything specific to California, is the largest single change in residential solar economics. The detail, with sources.
Rate schedules and export rules
What your surplus earns is set here, and it is where two identical systems a mile apart stop being comparable.
PG&E — E-TOU-C
Peak 4–9pm every day, year round. PG&E’s legacy default TOU rate. Fixed charge $24.00/month.
Summer Peak $0.52, Off-peak $0.32.
Winter Peak $0.40, Off-peak $0.29.
Exports: net billing — exports earn the hour-by-hour avoided-cost value rather than retail, which in the middle of a sunny afternoon is a small fraction of it.
Source: PG&E residential rate plan pricing, effective 1 Mar 2026
PG&E — E-ELEC
The default rate for new PG&E solar customers under net billing. Deep midnight–3pm off-peak. Fixed charge $24.00/month.
Summer Peak $0.55, Part-peak $0.39, Off-peak $0.33.
Winter Peak $0.32, Part-peak $0.30, Off-peak $0.28.
Exports: net billing — exports earn the hour-by-hour avoided-cost value rather than retail, which in the middle of a sunny afternoon is a small fraction of it.
Source: PG&E residential rate plan pricing, effective 1 Mar 2026
Southern California Edison — TOU-D-PRIME
What new SCE solar and storage customers are put on. No baseline credit; $24.15/mo basic charge. Fixed charge $24.15/month.
Summer On-peak $0.60, Mid-peak $0.43, Off-peak $0.27.
Winter On-peak $0.52, Mid-peak $0.46, Off-peak $0.29.
Exports: net billing — exports earn the hour-by-hour avoided-cost value rather than retail, which in the middle of a sunny afternoon is a small fraction of it.
Source: SCE Schedule TOU-D-PRIME; Base Services Charge from Nov 2025
SDG&E — TOU-DR1
The highest residential prices in the continental US. On-peak 4–9pm daily. Fixed charge $24.15/month.
Summer On-peak $0.70, Off-peak $0.48, Super off-peak $0.39.
Winter On-peak $0.62, Off-peak $0.54, Super off-peak $0.45.
Exports: net billing — exports earn the hour-by-hour avoided-cost value rather than retail, which in the middle of a sunny afternoon is a small fraction of it.
Source: SDG&E Schedule TOU-DR1 total rates table, effective 1 Jan 2026
Production in California
| City | kWh per kW / year | 7 kW system |
|---|---|---|
| San Diego, CA | 1,571 | 10,998 |
| Los Angeles, CA | 1,571 | 10,995 |
| Fresno, CA | 1,532 | 10,724 |
| San Francisco, CA | 1,510 | 10,569 |
Policy changes affecting California
- The 30% residential solar credit is gone. What replaced it is not a credit.The 4 July begin-construction deadline has passed. What that means for commercial projects.Net billing is the default now, and it changes what a solar panel is for
Work out your own number
Credits are the easy part. What decides payback is how much of your own production you use versus export, hour by hour, against the schedules above.
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