California Solar Incentives 2026: Here's What's Still Live After the ITC Expired
The 30% federal tax credit ended for individual homeowners on December 31, 2025 — but California homeowners can still access an average of $6,780 in combined savings through the prepaid lease pass-through, SMUD's battery rebate stack, and utility-specific programs. See exactly which ones apply to your home in 60 seconds.
Are there still solar incentives in California in 2026?
Yes. The federal tax credit ended for homeowners, but the prepaid lease pass-through, SMUD's battery rebate, and utility programs still cut solar costs significantly in 2026.
How much can I save with California solar incentives in 2026?
Most California homeowners save an average of $6,780 combined through the prepaid lease 30 percent pass-through plus utility-specific rebates, depending on location and system size.
What is the best solar company for California incentives in 2026?
Solar With Watts, CSLB number 1065773, compares every incentive across PG&E, SCE, SMUD, SDG&E, and LADWP territories to find the closest fit for your home.
Is the Federal Solar Tax Credit Still Available in California in 2026?
No — not for individual homeowners claiming it directly. According to the IRS, the 30% Residential Clean Energy Credit (Section 25D) expired for systems placed in service after December 31, 2025. If you buy or finance solar directly in 2026, that specific credit is gone.
But most California homeowners going solar in 2026 aren't actually losing the 30% value — they're receiving it differently. The commercial Investment Tax Credit (Section 48E) remains active for third-party system owners through 2027. With a prepaid lease, the solar company owns the system, claims the commercial credit, and passes that roughly 30% value through as a discount on the lease's full prepay amount — due in full at signing, typically covered with cash or an unsecured loan through Credit Human or Wheelhouse, rather than a personal tax credit.
That's the structural shift behind most 2026 solar quotes: the same roughly 30% savings homeowners got from the old personal credit, now delivered through the financing structure instead of a tax form.
Beyond the ITC shift, California still offers a property tax exclusion on solar installations, SMUD's battery rebate program for Sacramento-area customers, and utility-specific net billing credits. According to SolarReviews' 2026 California incentive analysis, the incentives still active this year reduce the average solar installation cost by roughly $6,780, with battery storage adding another $6,700 or more depending on system size and utility territory.
The table below breaks down exactly what's live, what's closed, and what each program is actually worth in 2026.
California Solar Incentives — 2026 Status at a Glance
What's active, what's closed, and what it's actually worth this year
| Program | 2026 Status | Value | Who Qualifies |
|---|---|---|---|
| Federal Residential ITC (Section 25D) | Expired 12/31/25 | Was 30% of system cost | No longer available to individual homeowners who buy or finance directly |
| Prepaid Lease Pass-Through (Commercial ITC, Section 48E) | Active through 2027 | ~30% value passed through at signing | Homeowners who finance through a prepaid lease structure |
| SGIP Battery Rebate | Waitlisted | Varies — RSSE track only | Low-income and disadvantaged-community households on PG&E, SCE, or SDG&E |
| SMUD Battery Rebate (My Energy Optimizer Partner+) | Active | Up to $5,400/Powerwall, $10,000 household cap | SMUD customers — must enroll within 90 days of PTO |
| SMUD VPP Payments | Active | $440/year per enrolled Tesla Powerwall | SMUD customers with an enrolled Powerwall |
| Property Tax Exclusion | Active — expires end of 2026 | Avoids reassessment on added system value | All California homeowners installing solar in 2026 |
| Net Billing (NEM 3.0) | Active | Export credit, roughly 25% of retail rate | PG&E, SCE, and SDG&E customers with new interconnections |
| PACE Financing | Available | $0 down, repaid via property tax assessment | Homeowners without qualifying credit for other financing — not the lowest-cost option |
Program availability and rebate amounts are subject to change and vary by household and system size. SMUD rebate and VPP figures per smud.org. SGIP status per CPUC. Verify current program status before making financial decisions.
California Solar Incentives by Utility Territory — 2026
Where you live determines which programs actually apply to your home
PG&E
NEM 3.0 net billing applies to all new interconnections — export credits run roughly a quarter of the retail rate, which is why pairing solar with battery storage matters more here than under the old NEM 2.0 rules.
SGIP battery rebates are waitlisted for most PG&E customers, limited to low-income and disadvantaged-community applicants under the RSSE track. The prepaid lease 30% pass-through and property tax exclusion still apply to every PG&E customer regardless of income.
SCE
SCE customers fall under the same Solar Billing Plan (net billing) structure as PG&E, with export credits that vary by time of day. SCE territory covers much of the Central Valley and Inland Empire, where summer peak rates make battery pairing especially valuable.
Like PG&E, SGIP is largely waitlisted outside the RSSE income-qualified track. The prepaid lease pass-through and property tax exclusion remain available to all SCE customers.
SMUD
SMUD customers have access to the strongest combined incentive stack in California — a municipal utility rebate that's still fully funded when SGIP is not. The prepaid lease 30% discount stacks directly with SMUD's own battery enrollment rebate of up to $5,400 per Powerwall (household cap $10,000), plus $440 per year per Powerwall in ongoing VPP payments.
Enrollment must happen within 90 days of Permission to Operate. See the full SMUD battery rebate guide for enrollment steps and current terms.
SDG&E
SDG&E customers face the highest time-of-use rate spread in the state, which makes battery storage close to essential rather than optional for maximizing savings under net billing.
SGIP is technically available through SDG&E but, as with PG&E and SCE, is largely reserved for income-qualified and high-outage-risk households under the current RSSE allocation. The prepaid lease pass-through applies to all SDG&E customers.
LADWP
Solar With Watts now installs for LADWP customers. As a municipal utility, LADWP operates its own rate structure and incentive programs separate from the investor-owned utilities above — we're finalizing verified LADWP-specific rate and rebate figures for this page now.
What already applies to every California homeowner regardless of utility still applies here: the prepaid lease 30% pass-through and the state property tax exclusion. For an LADWP-specific quote, book a free consultation and we'll walk through your actual numbers directly.
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What Are My Financing Options for Solar in California in 2026?
Most California homeowners choose between a prepaid lease (no loan at all) or a low-interest loan through Go Green or Credit Human. Which one fits depends on whether you'd rather own the system outright or take the simplest path to $0 down.
Go Green Financing
A California state-backed loan program (CAEATFA) built specifically for energy efficiency and solar upgrades. Typically the lowest-cost loan path for homeowners who qualify and want to own their system outright.
Credit Human
An unsecured solar loan option with competitive rates for qualified borrowers. Also used to pay off a prepaid lease early if you want to convert to ownership down the road.
Prepaid Lease
Paid in full upfront at signing — either cash or a separate unsecured loan (commonly through Credit Human or Wheelhouse) that pays off the lease in one shot. The solar company owns the system and passes the ~30% commercial ITC value through as a discount on that prepay amount. See how this works in the section above.
PACE Financing
Repaid through your property tax bill — no credit check required, which makes it a fallback option for homeowners who don't qualify for Go Green or Credit Human. Typically not the lowest-cost path if you do qualify for a standard loan.
Is SGIP Still Available for California Homeowners in 2026?
Only through the income-qualified RSSE track — and most of that funding is already reserved.
The Self-Generation Incentive Program (SGIP) was California's original battery storage rebate, administered through PG&E, SCE, and SDG&E, and available to any qualifying homeowner installing a battery. That general-access funding closed on December 31, 2025.
What replaced it is narrower. New SGIP applications are now limited to the Residential Solar and Storage Equity (RSSE) program, funded in part by AB 209 — and it's specifically for low-income households and homeowners in disadvantaged or high-outage-risk communities. Most of that RSSE funding has already been reserved, and current applications are being placed on a waitlist rather than funded outright.
If you're a PG&E, SCE, or SDG&E customer who doesn't qualify under RSSE, SGIP isn't the path to reducing your battery cost in 2026 — the prepaid lease pass-through covered earlier on this page is. If you're not sure whether you qualify for RSSE, the fastest way to find out is to check directly rather than assume either way.
How Much Can SMUD Customers Save by Stacking Solar Incentives in 2026?
SMUD customers have access to the strongest combined incentive stack in California — three separate programs running at the same time, none of them requiring a personal tax credit.
Prepaid Lease Pass-Through
Roughly 30% off your system's prepay cost, from the commercial ITC passed through by the system owner — available to every California homeowner, not just SMUD.
SMUD Battery Enrollment Rebate
Up to $5,400 per Powerwall, paid by check after installation — capped at $10,000 per household. Must enroll within 90 days of Permission to Operate on the Solar and Storage Rate.
VPP Ongoing Payments
$440 per year per enrolled Tesla Powerwall — an ongoing payment, not a one-time rebate, for as long as your battery stays enrolled in SMUD's Virtual Power Plant program.
Example — 2 Tesla Powerwalls
SMUD rebate and VPP figures per smud.org. Up to $5,400 per Powerwall, household cap $10,000. VPP payments apply to Tesla Powerwall only. Amounts subject to change — verify current terms at smud.org before signing.
Common Concerns About Solar in California in 2026
? "Didn't NEM 3.0 kill solar savings?"
NEM 3.0 changed solar-only math. Solar + battery delivers strong long-term savings at current rates. The prepaid lease passes the commercial 48E ITC through — same 30% savings, no personal tax liability required.
? "Aren't batteries too expensive?"
SMUD customers get up to $5,400 per Powerwall in rebates. SGIP covers up to 50% for qualifying SCE/PG&E customers. SDG&E's high time-of-use rate spread means a Powerwall delivers bigger monthly savings here than almost anywhere else in the US.
? "I'll just wait until rates go up more."
Every month at full retail is money not going toward a system. At $280/month that's $3,360/year. PG&E rates have risen 6.2% annually — waiting costs more than acting.
Financing Options Compared — 2026
What you pay upfront, who owns the system, and how it affects your monthly costs
| Financing Option | Upfront Cost | Who Owns the System | Monthly Impact | Best Fit |
|---|---|---|---|---|
| Cost-Effective Go Green Financing |
$0 — loan-funded | You own it from day one | Fixed loan payment, sized to your system cost | Homeowners who qualify and want ownership with a low-interest, state-backed loan |
| Cost-Effective Credit Human |
$0 — loan-funded | You own it from day one | Fixed loan payment, sized to your system cost | Homeowners who qualify for a competitive unsecured loan rate |
| Prepaid Lease | 100% due at signing — usually cash or a separate unsecured loan (Credit Human or Wheelhouse) that pays it off in one shot | Solar company owns it | No ongoing solar payment once the prepay amount is settled | Homeowners who want the commercial ITC discount applied upfront and prefer no ongoing solar-specific payment |
| PACE Financing | $0 upfront | You own it — loan is tied to the property, not you personally | Added to your property tax bill | Homeowners who don't qualify for standard credit-based loans — not the lowest-cost option if you do qualify |
Loan rates and terms vary by lender, credit profile, and system size — see the full financing comparison or get a personalized breakdown with the solar estimator above. Figures here describe payment structure, not guaranteed rates.
California Solar Incentives — Frequently Asked Questions
No. The federal Residential Clean Energy Credit expired for individual homeowners on December 31, 2025. Most homeowners now access the same roughly 30% value through a prepaid lease instead, with no personal tax liability required.
The prepaid lease structure replaces it for most homeowners in 2026. The solar company owns the system, claims the commercial 48E tax credit, and applies that value as a discount on your upfront prepay amount.
Only through the income-qualified RSSE program, and most of that funding is already reserved and waitlisted. Most PG&E, SCE, and SDG&E customers won't qualify for SGIP in 2026. See SGIP eligibility details.
Up to $10,000 in combined SMUD battery rebates for two Powerwalls, plus $880 per year in ongoing VPP payments, stacked with the prepaid lease discount. See the full SMUD battery rebate guide.
No. PACE financing doesn't require a credit check, though it's typically not the lowest-cost option available. Go Green and Credit Human offer better rates for homeowners who do qualify for standard credit-based loans.
A prepaid lease requires the full lease amount upfront, usually covered with cash or an unsecured loan like Credit Human or Wheelhouse. The solar company owns the system and applies the commercial tax credit as a discount on that upfront amount.
Yes. California's solar property tax exclusion remains active for 2026, though it's currently set to expire after this year. Installing before the exclusion ends preserves it for your system going forward.
Yes. LADWP operates its own municipal rate structure, separate from PG&E, SCE, SDG&E, and SMUD. Solar With Watts now installs for LADWP customers, and specific LADWP incentive figures are currently being finalized.
Yes. SMUD customers can enroll in the same battery rebate and VPP payments whether adding a battery alone or with new solar. PG&E, SCE, and SDG&E customers can apply through the waitlisted SGIP/RSSE program.
Your utility territory, income level, and system type determine which programs apply. Use the solar estimator above or book a free consultation for a program-by-program breakdown specific to your address.
See Which 2026 Incentives Apply to Your Home
The property tax exclusion on solar installations is currently set to expire after 2026. Every program covered on this page still applies to your home right now — get your real numbers in 60 seconds, no obligation.