Solar States

California · homeowner planning guide

Solar panels in California: costs, incentives & payback

California solar economics depend on your utility, whether you are on a legacy net-energy-metering arrangement or the commission successor tariff, and whether any storage incentive still has open budget for your category.

Sun resourceHigh sun resource
Sun (2024)5.02 kWh/m²/day
Federal credit30% (2022–25 installs only)
State incentiveCheck eligibility
Export rulesCheck utility tariff

Guide updated: 2026-09-21. Local source-check scope and unresolved items are listed below.

Plan with your own numbers

Solar tools for California homeowners

Start with the solar calculator using your bill, fixed charges, self-consumption and export-price assumptions. The utility rules below are not automatically applied in the calculator. Utility production charges may need a separate adjustment; this is a planning scenario, not a utility tariff simulation or guaranteed savings.

Estimate solar size and cost in CaliforniaCalculate panels for a California homeEstimate California solar paybackCheck solar production context for CaliforniaEstimate solar panels for EV charging in California

Local export rules and incentives

Editorial review: 2026-09-21. PUC §§ 2827 and 2827.1 plus the 2026 SGIP Handbook and live SGIP portal metrics/waitlists reviewed. No statewide fixed export price (including the old fixed statewide export-price claim) is verified. Municipal/other non-large-utility tariffs and live award approval remain case-specific.

Export credit

Source-checked within the stated scope

California Public Utilities Code § 2827 establishes the classic net-energy-metering framework for eligible customer-generators (generally renewable facilities not more than one megawatt on the customer premises, with defined customer classes). It describes measuring the difference between grid electricity supplied and electricity exported, and provides for net surplus compensation rules in the statute. Separately, § 2827.1 requires the commission to develop a standard contract or tariff for eligible customer-generators of large electrical corporations (more than 100,000 service connections). Beginning July 1, 2017, or earlier if a utility hits its § 2827 NEM capacity limit, new eligible customer-generators of those large corporations take the commission successor tariff; the statute says there is no generating-capacity or customer-count cap on that successor tariff after that point. § 2827.1 requires the tariff to be based on costs and benefits and that total benefits to all customers and the system be approximately equal to total costs — it does not publish a single cents-per-kWh export price. Obtain your utility's current export/import schedules, fixed charges and any legacy NEM end date in writing. A statewide five-cent export assumption is not supported by these statutes.

Supporting sources: California Public Utilities Code § 2827 (net energy metering); California Public Utilities Code § 2827.1 (successor tariff for large electrical corporations).

Utility coverage

Source-checked within the stated scope

Section 2827 applies to electric utilities as defined there (electrical corporations, many local publicly owned utilities, electrical cooperatives), with stated exceptions. Section 2827.1 focuses on large electrical corporations and the commission-run successor tariff. A municipal utility, cooperative or community-choice arrangement can change which documents apply. Legacy § 2827 customers may keep prior NEM terms only for the transition length the commission set; new applications for large-IOU service generally fall under the successor tariff path. Identify PG&E, SCE, SDG&E or your municipal/other provider and any CCA on the bill before modeling savings.

Supporting sources: California Public Utilities Code § 2827 (net energy metering); California Public Utilities Code § 2827.1 (successor tariff for large electrical corporations).

Incentive eligibility

Source-checked within the stated scope

The Self-Generation Incentive Program (SGIP) is administered through the official portal at selfgenca.com, with program administrators including PG&E, CSE, SoCalGas, SCE and LADWP. The 2026 SGIP Handbook describes budget categories (including small residential storage and equity categories), step-based incentives, a 20% developer cap per general-market budget category per statewide step, and a reservation/claim process. Handbook text states that the deadline to submit new applications is December 30, 2025 and that ratepayer-funded SGIP waitlists close on that date — verify whether your budget category still accepts applications or only processes earlier reservations. The Program Metrics page (snapshot reviewed 2026-09-20 on the portal) still lists authorized, allocated and available funds by administrator and category; the Waitlists page still showed waitlist flags for some Residential Solar and Storage Equity AB 209 paths. Equity handbook examples include rates such as Residential Solar and Storage Equity solar $3.10/W and storage $1.10/Wh for listed categories — those are category rates in the handbook, not a guaranteed award for every homeowner. Do not treat a salesperson's SGIP estimate as reserved funds.

Supporting sources: Self-Generation Incentive Program application portal (selfgenca.com); 2026 SGIP Handbook (program PDF via selfgenca documents); SGIP Program Metrics; SGIP Waitlists.

Application and limits

Source-checked within the stated scope

Under § 2827, the baseline eligible customer-generator facility size is not more than one megawatt (with additional specialized provisions in the statute). Under § 2827.1, projects greater than one megawatt may be allowed in the successor framework if they meet onsite-load and interconnection rules the commission sets. SGIP requires registered applicants/developers, reservation requests and later claim steps; developer funding is capped at 20% of a given general-market budget category in each statewide step. Check live metrics for available funds, any waitlist, and your PA's rules before paying a deposit that assumes an incentive. Interconnection, permission to operate and incentive reservation are separate approvals.

Supporting sources: California Public Utilities Code § 2827 (net energy metering); California Public Utilities Code § 2827.1 (successor tariff for large electrical corporations); 2026 SGIP Handbook (program PDF via selfgenca documents); SGIP Program Metrics.

Official sources and review status

A source review is not an approval of your application, a confirmed rebate reservation or a verification of all utility tariffs. Dates shown apply only to the cited documents, not every claim about the state.

Before you sign

  1. Get the written tariff name for a new application (legacy NEM vs successor/net billing) and the current export values by hour.
  2. Open selfgenca.com Program Metrics and Waitlists for your PA and budget category; do not rely on a stale sales flyer.
  3. Model solar-only and solar-plus-storage without counting an unreserved SGIP award.
  4. Ask whether expansion would change legacy NEM treatment or successor tariff placement.

Before comparing solar quotes in California

For your California application, does the proposal distinguish legacy net metering from the tariff available to a new customer?

  1. Compare cash cost first. Divide the quoted solar cash price by system size in watts. Keep batteries, roof work and financing fees separate. Compare quotes by cost per watt.
  2. Separate incentives from bill savings. Require written eligibility and approval for each state or utility benefit. A pending application is not a guaranteed payment.
  3. Test the payback assumptions. Use your actual electricity bill and applicable export terms. Estimate your solar break-even year without unconfirmed incentives.

Federal credit: distinguish a past installation from a new one

The IRS states that the residential clean energy credit is not available for property placed in service after December 31, 2025. Paying before that date does not make a later completed installation eligible. A qualifying unused credit from an earlier installation is a separate tax question. Read the IRS credit guidance and installation-deadline FAQ (question 7).

Federal guidance checked 2026-09-11. This is general planning information, not individualized tax advice.

Source checks for California homeowners

EIA California energy profile provides state energy context, not a residential installation quote. Confirm current incentives with the administering agency and export terms with the utility named on your bill. These research links are not a confirmation that every local program described in the guide is currently open.

Questions homeowners ask

How is excess solar electricity credited?
California Public Utilities Code § 2827 establishes the classic net-energy-metering framework for eligible customer-generators (generally renewable facilities not more than one megawatt on the customer premises, with defined customer classes). It describes measuring the difference between grid electricity supplied and electricity exported, and provides for net surplus compensation rules in the statute. Separately, § 2827.1 requires the commission to develop a standard contract or tariff for eligible customer-generators of large electrical corporations (more than 100,000 service connections). Beginning July 1, 2017, or earlier if a utility hits its § 2827 NEM capacity limit, new eligible customer-generators of those large corporations take the commission successor tariff; the statute says there is no generating-capacity or customer-count cap on that successor tariff after that point. § 2827.1 requires the tariff to be based on costs and benefits and that total benefits to all customers and the system be approximately equal to total costs — it does not publish a single cents-per-kWh export price. Obtain your utility's current export/import schedules, fixed charges and any legacy NEM end date in writing. A statewide five-cent export assumption is not supported by these statutes.
Do the same solar rules apply to every utility?
Section 2827 applies to electric utilities as defined there (electrical corporations, many local publicly owned utilities, electrical cooperatives), with stated exceptions. Section 2827.1 focuses on large electrical corporations and the commission-run successor tariff. A municipal utility, cooperative or community-choice arrangement can change which documents apply. Legacy § 2827 customers may keep prior NEM terms only for the transition length the commission set; new applications for large-IOU service generally fall under the successor tariff path. Identify PG&E, SCE, SDG&E or your municipal/other provider and any CCA on the bill before modeling savings.
Which residential solar incentives are confirmed?
The Self-Generation Incentive Program (SGIP) is administered through the official portal at selfgenca.com, with program administrators including PG&E, CSE, SoCalGas, SCE and LADWP. The 2026 SGIP Handbook describes budget categories (including small residential storage and equity categories), step-based incentives, a 20% developer cap per general-market budget category per statewide step, and a reservation/claim process. Handbook text states that the deadline to submit new applications is December 30, 2025 and that ratepayer-funded SGIP waitlists close on that date — verify whether your budget category still accepts applications or only processes earlier reservations. The Program Metrics page (snapshot reviewed 2026-09-20 on the portal) still lists authorized, allocated and available funds by administrator and category; the Waitlists page still showed waitlist flags for some Residential Solar and Storage Equity AB 209 paths. Equity handbook examples include rates such as Residential Solar and Storage Equity solar $3.10/W and storage $1.10/Wh for listed categories — those are category rates in the handbook, not a guaranteed award for every homeowner. Do not treat a salesperson's SGIP estimate as reserved funds.
What application, capacity and funding limits should I check?
Under § 2827, the baseline eligible customer-generator facility size is not more than one megawatt (with additional specialized provisions in the statute). Under § 2827.1, projects greater than one megawatt may be allowed in the successor framework if they meet onsite-load and interconnection rules the commission sets. SGIP requires registered applicants/developers, reservation requests and later claim steps; developer funding is capped at 20% of a given general-market budget category in each statewide step. Check live metrics for available funds, any waitlist, and your PA's rules before paying a deposit that assumes an incentive. Interconnection, permission to operate and incentive reservation are separate approvals.
Is solar worth it in California?
It depends on sun resource, your utility's net metering or net-billing rules, and what you pay for electricity. The federal 30% clean-energy credit applied to systems in service by December 31, 2025; per the IRS it is not available for property placed in service after that date. California-specific programs are being verified and will appear here as confirmed.
How much does the federal solar credit cover?
The federal Residential Clean Energy Credit covered 30% of qualified costs for systems in service from 2022 through December 31, 2025. Per the IRS, the credit is not available for property placed in service after that date. California-specific programs are being verified and will appear here as confirmed.
Do I need a battery with solar in California?
Not always — where utilities pay full-retail net metering, a battery's value is lower. Where net billing cuts export credits, batteries let you shift your own energy into the evening. Your California utility tariff determines the math.
Can I install solar panels myself in California?
DIY installs happen, but most utilities require a licensed electrician, permits and an inspection before interconnection. Check California's permit office and your utility's interconnection rules first.

How to buy solar in California — the honest version

  1. Model the math first. Get 2–3 quotes in $/W (dollars per watt, before credit) and compare on that number — not on "savings" projections. Use the quote scorecard.
  2. Check your utility's export rules. Retail net metering vs net billing changes whether you want a battery — see the notes above and the battery planner.
  3. Ask about the hidden three: permits, HOA rules and roof condition — walk the 16-question checklist before you sign.
  4. Confirm local sun. Measured 2024 irradiance for California is on the sun look-up; national literacy starts at the federal credit guide.