California
California solar in 2026
California is the strangest solar market in the country right now. Electricity costs nearly twice the national average, which should make this an easy call. But the state also pays less for your exported power than almost anywhere, the federal credit is gone, and a property tax deadline lands January 1, 2027. Whether solar pencils here depends on when your panels produce and when you use power, not just how much you pay per month.
What the big three utilities charge
Almost every California homeowner buys power from PG&E, SCE, or SDG&E, and their prices have split apart. SDG&E customers absorbed an 11.4 percent increase in January 2026 and another bump in April. SCE actually drifted down. PG&E sits in between, high and slowly falling. Statewide, the average worked out to 33.25 cents in May 2026, basically flat against a year earlier.
| Utility | Average residential rate | Direction in 2026 |
|---|---|---|
| PG&E | 41.46 c/kWh (Jan 2026 advisory) | Down from 44.36 c/kWh in September 2025 |
| SCE | 34.4 c/kWh (June 2026 advisory) | Roughly flat, 33.2 c/kWh counting the Climate Credit |
| SDG&E | 46.4 c/kWh (April 2026) | Up 11.4 percent in January, another 1.5 percent in April |
| Statewide average (EIA) | 33.25 c/kWh | Flat vs 33.29 c/kWh in May 2025 |
Sources: PG&E electric rate advisory, January 2026; SCE rate advisory, June 2026; SDG&E rate change alert, April 2026; EIA Table 5.6.A. Utility averages are bundled residential figures from each utility's own advisory, not our estimates.
Net billing is not net metering, and the difference is money
Every system connected since April 15, 2023 falls under the Net Billing Tariff from CPUC Decision D.22-12-056. The utilities market it as the Solar Billing Plan. The mechanics matter: your exports earn what the grid thinks that hour of power is worth, set by an avoided cost model, not the retail rate you pay. On a sunny March afternoon, when every roof in the state is exporting, that value is low. The retail rate you avoid by using your own power stays high. So the game in California is self consumption: batteries, load shifting, and sizing the system to your actual daytime use.
One piece of the export rate is published and locked: a bonus credit paid on top of the hourly value for nine years, set by the year you connect. It is shrinking on a schedule.
| Interconnection year | Bonus per exported kWh | Low income bonus |
|---|---|---|
| 2024 | $0.018 | $0.072 |
| 2025 | $0.013 | $0.054 |
| 2026 (now) | $0.009 | $0.036 |
| 2027 (final year) | $0.004 | $0.018 |
Source: PG&E Solar Billing Plan toolkit, residential Energy Export Bonus Credit, locked for nine years from interconnection. The bonus program ends after 2027. The underlying hourly export values vary by hour and season and are not published as a single average, so be suspicious of any pitch quoting one flat "NEM 3.0 rate."
The incentive picture, including the deadline
California never had a state solar income tax credit, and the 30 percent federal credit died for purchases after December 31, 2025. What the state still has is narrower and has a clock on it.
| Item | What it does | Status |
|---|---|---|
| Property tax exclusion | Solar is excluded from new construction assessment, so your property taxes do not rise from the install | Ends for new systems January 1, 2027. Systems qualifying before that date keep it until the home changes hands (California BOE) |
| SGIP battery rebate | Storage rebates through the CPUC, equity tier listed at $850 per kWh | CPUC page says available; industry sources say general market budgets are thin. Confirm current funding with your installer before counting on it (CPUC SGIP) |
| State income tax credit | Does not exist in California | Nothing to claim. Any pitch that implies one is wrong |
| Federal 48E (lease/PPA only) | Provider claims it, prices some into your rate | Alive for third party owned systems (CRS) |
The practical read: if you are buying in California, the 2027 property tax deadline is the only date that should hurry you. Everything else rewards patience and careful sizing. A system qualifying in 2026 keeps its exclusion for as long as you own the home. The same system installed thirteen months later gets assessed as new construction, every year, forever.
Production: the sun is not the problem
We ran the PVGIS model ourselves for five California cities on August 17, 2026, same assumptions everywhere: south facing, 30 degree tilt, 14 percent losses. The surprise is San Diego at the bottom. The marine layer is real, and the sunniest reputation in the state belongs to a city that produces 9 percent less than Los Angeles.
| City | kWh per kW per year | Annual output, 9 kW system |
|---|---|---|
| Los Angeles | 1,705 | 15,345 kWh |
| San Jose | 1,660 | 14,940 kWh |
| Fresno | 1,647 | 14,823 kWh |
| Sacramento | 1,646 | 14,814 kWh |
| San Diego | 1,548 | 13,932 kWh |
Method: PVGIS v5.2, NSRDB radiation database, model runs by Solar Learning Lab, August 17, 2026. We use a 9 kW example because the average California system is 8.95 kW per EnergySage, smaller than the national norm since usage per home here is low.
Run your own numbers
California installs are cheap per watt ($2.46/W cash median per EnergySage) and the retail rate you offset is enormous. That is why EnergySage pegs average payback at 7.39 years, the fastest of any state we cover, even with net billing dragging on export value. Treat the output below as a self consumption estimate and remember exports earn less here.
Slider bounds come from our PVGIS runs across five California cities. San Diego sits at the bottom of the range, Los Angeles at the top.
National cash median was $3.50 per watt for 2024 installs (LBNL). Massachusetts quotes often run higher. Use your quote.
Assumptions you can change
Use the rate on your actual lease or PPA quote. There is no published statewide average we trust enough to hardcode.
Cash purchase
$8,364 after state credit
- Year 1 benefit
- $161/mo
- Payback
- 5 years
- 20 year net position
- $38,411
No federal credit and no California income tax credit. What you get instead: exports credited under the Net Billing Tariff and a property tax exclusion if your system qualifies before January 1, 2027.
Solar loan
$112/mo 15 yr payment
- Year 1 net
- $49/mo
- Upfront
- $0
- 20 year net position
- $26,642
We price loans at $3.66 per watt: the EnergySage California cash figure plus the $1.20 national loan-over-cash spread LBNL documents, since dealer fees get built into loan pricing.
Lease / PPA
$0 down you buy the power
- Year 1 net
- $45/mo
- Upfront
- $0
- 20 year net position
- $14,635
The provider keeps the federal 48E business credit and prices some of it into your rate. In 2026 this is the only path that captures any federal incentive.
Estimates, not quotes. Inputs use the California average rate from EIA (Table 5.6.A, May 2026), our own PVGIS production runs, and EnergySage August 2026 cost data. Under the Net Billing Tariff your export credits depend on hourly values we cannot model here, so treat the bill offset as approximate. We are a solar installer and we also partner with other solar companies. See our disclosures.
What changed in the last year
- SDG&E rates jumped 11.4 percent in January 2026, then another 1.5 percent in April (SDG&E January alert). San Diego is now the strongest solar case in the state on rates alone, despite the weakest production in our table.
- The export bonus credit stepped down again for 2026 interconnections, to $0.009 per kWh, and ends entirely after 2027 (PG&E toolkit).
- SB 710 confirmed the property tax exclusion mechanics: qualify before January 1, 2027 and you keep it until the property changes ownership (BOE legislative analysis).
- AB 942, the bill that would have shortened legacy net metering protections, was amended in the Senate to protect existing NEM contracts when a home sells (CALSSA). We have not confirmed its final enacted status from the legislature's own site, so do not treat it as settled law either way.
Who actually installs well in California
California's installer market is the country's largest and its churn since the NEM 3.0 transition has been brutal, so recency matters more than brand recognition. Our ratings pass centers on greater Los Angeles, where the CSLB contractor pool is deepest. Every company below holds a current Google rating of 4.7 or better. Ask each bidder how many net billing systems they have commissioned since 2023; an installer still pitching NEM 2 payback curves is reading from an old script.
Solar Optimum Glendale
Glendale, CA
4.7(372 Google reviews)
Echelon Solar Power
Los Angeles metro
4.9(136 Google reviews)
Solar G
Glendale, CA
5.0(128 Google reviews)
Powerfull Solar, Inc
Los Angeles, CA
5.0(107 Google reviews)
Green Integrations and Management Inc.
Los Angeles, CA
5.0(100 Google reviews)
These figures mirror what Google Maps showed on August 17, 2026 (collected with DataForSEO). Placement here is free and unpaid, and it is not a recommendation; verify each CSLB license number yourself before committing.
Go deeper: Los Angeles
Everything above describes Edison, PG&E and SDG&E territory. Los Angeles runs on municipal LADWP power and still credits solar exports at full retail, a deal the rest of the state lost in 2023. We built a dedicated guide with LADWP's tiered rate table, express permit rules and a month by month production curve for an LA roof: Los Angeles solar in 2026.
See what your house pencils out to
Four questions, then a savings range built from the same EIA and PVGIS data on this page. We are a solar installer and we also partner with other solar companies. Details in our disclosures.
What does your monthly electric bill look like?
California average is $167 per month (EIA, 2024).