California Solar Panels

The Self-Generation Incentive Program (SGIP) is California’s primary rebate program for home battery storage systems. As of 2026, the General Market, Equity, and Equity Resiliency ratepayer-funded tiers are closed to new applicants. The only active pathway is the Residential Solar and Storage Equity (RSSE) program, funded by AB 209 with $280 million in state funds. This tier offers up to $1,100/kWh for battery storage and $3,100/kW for paired solar, potentially covering 100% of system costs for qualifying households. However, most of this budget is already reserved and new applications are being placed on a waitlist.

To qualify for the RSSE program, you must be a residential customer of PG&E, SCE, SoCalGas, or SDG&E with a household income at or below 80% of the Area Median Income (AMI), or be enrolled in an income-based assistance program. Priority is given to customers in disadvantaged communities (DACs), high fire-threat districts, or areas that have experienced two or more Public Safety Power Shutoff (PSPS) events. Incentives are calculated on usable battery capacity (kWh) and cannot exceed the total installed cost of the system.

Even though the RSSE budget is currently waitlisted, it is worth applying to secure your place in line, as funding may become available. The program is administered through the SGIP portal at selfgenca.com. Eligible battery technologies include grid-tied lithium-ion systems from approved manufacturers. Incentives typically apply to up to 30 kWh of capacity for standard residential projects, or up to 80 kWh for households qualifying under resiliency criteria.

The Disadvantaged Communities – Single-Family Solar Homes (DAC-SASH) program offers income-qualified homeowners in disadvantaged communities an incentive of up to $3 per watt for solar systems between 1 and 5 kW, which can effectively cover the full cost of a rooftop solar installation. The program is active through 2030 and is administered by GRID Alternatives, a nonprofit organization. Applications are processed directly by GRID Alternatives — not through private solar installers — so homeowners should contact them directly to begin the process.

To be eligible, you must meet all three of the following criteria: (1) receive electric service from PG&E, SCE, or SDG&E; (2) own and occupy a single-family home as your primary residence; and (3) live in a disadvantaged community (DAC) as identified by the CalEnviroScreen 4.0 map (top 25% of census tracts statewide). Additionally, your total household income must fall within CARE or FERA program limits — through May 31, 2026, that means no more than $52,875 for a 1–2 person household or $94,125 for a 5-person household.

DAC-SASH is one of California’s most impactful solar equity programs, specifically designed to bring the benefits of rooftop solar to households that would otherwise be priced out. To apply or check eligibility, complete the online form at GRID Alternatives’ website or call toll-free at (866) 921-4696. Because this program targets underserved communities, it also includes workforce development and solar job training components.

The Residential Solar and Storage Equity (RSSE) program, funded through AB 209 with $280 million in state appropriations, is the most generous solar and battery incentive currently available in California. It offers $1,100/kWh for battery storage and $3,100/kW for paired solar installations, with the potential to cover 100% of system costs for qualifying low-income households. The program opened for reservations on June 2, 2025, and is available to customers of PG&E, SCE, SDG&E, and LADWP (LADWP applications were expected to open by end of 2025).

Eligibility requires that your household income be at or below 80% of the Area Median Income (AMI), or that you are enrolled in an income-based assistance program such as CARE or FERA. Preference is given to households located in designated disadvantaged communities (DACs), high fire-threat zones, or areas that have experienced repeated Public Safety Power Shutoffs (PSPS). The incentive is structured as a rebate applied to the installed cost of the system and cannot exceed total project costs.

As of April 2026, most RSSE sub-budgets are fully reserved and new applicants are being placed on a waitlist. However, some sub-budgets (such as the SCE RSSE-AB 209 POU sub-budget) have shown small amounts of remaining funding. Homeowners are encouraged to apply through the official SGIP portal at selfgenca.com to secure a waitlist position, as additional funding rounds may become available. This program can be combined with the DAC-SASH solar rebate for maximum savings.

The Solar on Multifamily Affordable Housing (SOMAH) program provides financial incentives for installing solar photovoltaic systems on multifamily affordable housing properties in California. Building owners and affordable housing developers can receive up to $3.50 per AC Watt for solar generation that directly benefits tenants, and $1.19 per AC Watt for systems serving common areas. The program is funded by up to $100 million annually from electric utility Greenhouse Gas Auction Proceeds and has been extended through 2032 under Senate Bill 355 (2023).

SOMAH is designed to bring the economic benefits of solar energy to low-income renters who cannot install their own rooftop systems. Eligible properties must be located in California’s disadvantaged communities (DACs), defined as census tracts scoring in the top 25% statewide on the CalEnviroScreen tool. The program is administered by a consortium of nonprofits including the Center for Sustainable Energy (CSE), GRID Alternatives, the Association for Energy Affordability (AEA), and the California Housing Partnership Corporation (CHPC).

As of May 22, 2026, SOMAH has paused integrated battery storage incentive additions in PG&E service territory until further notice, though solar-only incentives remain available. A waitlist form is available for active applications in the PowerClerk portal. Property owners and developers interested in the program should visit calsomah.org for eligibility details, application instructions, and to connect with program administrators.

The Disadvantaged Communities – Green Tariff (DAC-GT) program is designed for income-qualified residents in disadvantaged communities who are unable to install rooftop solar — such as renters or homeowners with unsuitable roofs. Through this program, eligible customers receive a 20% discount on their electricity bill by being credited with energy from utility-scale clean energy sources. The program is available through PG&E, SCE, and SDG&E and was approved and improved by the CPUC as part of a broader 2024 decision that also launched the new Community Renewable Energy (CRE) Program.

To qualify, customers must meet the income eligibility requirements for either the California Alternate Rates for Energy (CARE) or Family Electric Rate Assistance (FERA) programs, and must reside in a designated disadvantaged community (DAC). This program is specifically intended for those who cannot participate in rooftop solar programs like DAC-SASH or SOMAH, ensuring that the benefits of clean energy reach all income levels in underserved communities.

The DAC-GT program requires no installation or upfront cost — the bill discount is applied directly to your monthly electric bill once you are enrolled. Customers interested in enrolling should contact their utility (PG&E, SCE, or SDG&E) directly or visit the CPUC’s program page for more information. This program can be a meaningful source of ongoing savings for renters and others who lack access to traditional solar incentives.

Under California’s Active Solar Energy System Exclusion (Revenue and Taxation Code Section 73), the added value of a qualifying rooftop solar or solar-plus-storage system is excluded from your property tax assessment. This means that when you install solar panels, your property taxes will not increase as a result of the added home value — potentially saving homeowners hundreds of dollars per year. For example, on a $21,000 solar system, this exclusion can save approximately $150–$260 annually in property taxes.

This exclusion applies to both solar-only and solar-paired-with-battery-storage systems. It is available to residential and commercial property owners throughout California and does not require a separate application in most cases — the exclusion is applied automatically when the solar system is reported to the county assessor. The exclusion has been a long-standing benefit for California solar adopters, helping to ensure that going solar does not result in a higher tax bill.

Important deadline: This property tax exclusion is currently set to expire on January 1, 2027. After that date, new solar installations will be subject to property tax assessment based on the added value of the system. Homeowners who install solar before the exclusion expires will benefit from the protection for the life of their system under current law. If you are considering solar, this expiration date is an important factor in your timing decision.

California provides a sales tax exemption for solar energy equipment and battery storage systems. This means that when you purchase solar panels, inverters, racking, and qualifying energy storage components, you do not pay California state sales tax on those items. Given that California’s statewide base sales tax rate is 7.25% (with local additions), this exemption can represent a meaningful reduction in the upfront cost of a solar or battery installation.

The exemption applies to equipment used in solar energy systems, including photovoltaic panels and associated hardware, as well as battery storage systems paired with solar. It is typically applied at the point of sale by the solar installer or equipment supplier, so homeowners generally do not need to take any special action to claim it — the savings are built into your installation quote.

This exemption stacks with other California incentives such as the property tax exclusion and SGIP battery rebates, making it one of several ways the state reduces the cost of going solar. If you are comparing quotes from installers, make sure your quote reflects the sales tax exemption on equipment costs. For specific questions about which components qualify, consult the California Department of Tax and Fee Administration (CDTFA) or your solar installer.

California’s current solar export policy is the Net Billing Tariff (NBT), commonly called NEM 3.0, which took effect on April 15, 2023 for customers of PG&E, SCE, and SDG&E. Under this policy, excess solar electricity sent to the grid is credited at avoided-cost rates averaging $0.05–$0.08 per kWh — roughly 75% lower than the near-retail rates (~$0.30/kWh) available under the previous NEM 2.0 policy. Because export credits are now much lower, pairing solar with a battery storage system is strongly recommended to maximize self-consumption and savings.

Customers who submitted a solar interconnection application before April 14, 2023 are grandfathered into NEM 2.0 and receive retail-rate export credits for 20 years from their Permission to Operate (PTO) date. The final deadline for NEM 2.0 grandfathered systems to achieve Permission to Operate was April 15, 2026. Importantly, adding battery storage to an existing NEM 2.0 system does not affect your grandfathered status. NEM 3.0 also includes an ACC Plus adder — a slightly elevated export credit available to new solar customers who interconnect before the end of 2027, after which the adder phases out. Low-income customers and those in disadvantaged communities receive higher adder rates.

Customers of municipal utilities such as LADWP and SMUD are not subject to NEM 3.0 — these utilities operate their own net metering programs and currently credit solar exports at full retail rates, which is a significantly better deal. If you are a PG&E, SCE, or SDG&E customer installing solar under NEM 3.0, your system should be designed for maximum self-consumption, and you are required to enroll in a Time-of-Use (TOU) rate plan that charges more during peak evening hours and less during off-peak times, incentivizing battery storage to shift solar energy use to those high-cost periods.

The Sacramento Municipal Utility District (SMUD) offers its My Energy Optimizer Partner+ program, which provides substantial incentives for homeowners who install an eligible battery storage system and enroll it in SMUD’s virtual power plant (VPP). Participants receive a one-time enrollment incentive of up to $10,000 (calculated at $500/kWh minus a 20% holdback), plus ongoing quarterly payments ranging from $110/quarter for one battery to $330/quarter for three or more batteries — equivalent to $440–$1,320 per year in ongoing income.

Eligible battery brands for the program include Tesla Powerwall, Enphase, SolarEdge, Franklin, Sonnen, and Eguana. By enrolling, homeowners allow SMUD to dispatch their battery during periods of high grid demand, helping to stabilize the local electric grid while earning ongoing compensation. This program is available to SMUD customers in Sacramento County and represents one of the most financially attractive battery incentives in California for those in SMUD’s service territory.

Because SMUD operates its own net metering program with full retail-rate export credits (unlike PG&E, SCE, and SDG&E under NEM 3.0), SMUD customers enjoy a double advantage: better solar export rates and generous battery incentives. Homeowners interested in the My Energy Optimizer Partner+ program should visit SMUD’s website or contact SMUD directly to confirm current eligibility requirements, available battery models, and enrollment steps, as program details may be updated periodically.

Property Assessed Clean Energy (PACE) financing is a state-supported program administered by the California Department of Financial Protection and Innovation (DFPI) that allows homeowners to install solar panels and battery storage systems with no money upfront. Instead of a traditional loan, the financing is tied to your property and repaid through your property tax bill over a period of typically 10 to 20 years. Because the debt is secured by the property rather than the borrower, PACE programs often offer competitive interest rates and are accessible to homeowners who may not qualify for traditional financing.

One of the key advantages of PACE financing is that it is transferable — if you sell your home, the remaining balance can transfer to the new owner along with the property, which can be a selling point when marketing a solar-equipped home. PACE financing can be used for solar panel systems, battery storage, and other qualifying clean energy improvements. California is one of only a handful of states that offers PACE financing, making it a unique option for homeowners in the state.

It is important to understand that PACE is a loan, not a grant or rebate — you will pay interest over the life of the financing term, and the repayment obligation is attached to your property. Homeowners should carefully review the terms, interest rates, and total cost before entering a PACE agreement. The DFPI provides consumer protections and oversight for PACE providers in California. PACE financing can be combined with other incentives such as SGIP battery rebates and the property tax exclusion to reduce overall system costs.

Alameda Municipal Power (AMP) offers an Income Qualified Solar Rebate Program that provides a one-time $500 rebate to eligible homeowners who install a new solar panel system. To qualify, your household income must be below $106,000, and the solar system must be installed on a home that was built before 2020. This rebate is available exclusively to customers within AMP’s service territory in the City of Alameda.

This program is designed to make solar more accessible to moderate-income homeowners in Alameda who might otherwise face financial barriers to going solar. The $500 rebate is applied after installation and can be combined with other available incentives, such as the California property tax exclusion and the sales tax exemption on solar equipment, to further reduce the net cost of your system.

Homeowners interested in this rebate should contact Alameda Municipal Power directly to confirm current program availability, application requirements, and any documentation needed to demonstrate income eligibility. As a municipal utility, AMP also operates its own net metering program, which may offer more favorable solar export credit rates than the statewide NEM 3.0 policy that applies to PG&E, SCE, and SDG&E customers.

Pasadena Water and Power (PWP) launched a new residential solar rebate program in April 2026, offering customers $0.60 per watt for new rooftop solar installations. Income-qualified households receive an enhanced rebate of $1.00 per watt, making solar significantly more affordable for lower-income Pasadena residents. This program is available exclusively to customers within PWP’s service territory in the City of Pasadena.

As a municipal utility, Pasadena Water and Power operates independently from the statewide NEM 3.0 policy that applies to PG&E, SCE, and SDG&E customers. PWP customers may benefit from more favorable net metering terms in addition to this upfront rebate, making the overall economics of going solar potentially more attractive for Pasadena homeowners compared to customers of the large investor-owned utilities.

Homeowners interested in the PWP solar rebate should contact Pasadena Water and Power directly to confirm current program details, available funding, application procedures, and income qualification thresholds. Rebate programs at municipal utilities can have limited budgets that are exhausted over time, so it is advisable to apply as early as possible. This rebate can be stacked with the California property tax exclusion and sales tax exemption on solar equipment for additional savings.

The Rancho Mirage Energy Authority (RMEA) offers a battery storage rebate ranging from $500 to $1,500 for residential customers who install a qualifying home battery system. This rebate is designed to encourage energy storage adoption in the Rancho Mirage area, helping homeowners reduce their reliance on the grid during peak demand periods and improve energy resilience.

Battery storage is increasingly important in California’s desert communities, where extreme heat drives high air conditioning loads and grid stress. A home battery system allows homeowners to store solar energy generated during the day and use it during evening peak hours, reducing electricity costs under Time-of-Use rate structures. The RMEA rebate helps offset the upfront cost of battery installation and can be combined with other state-level incentives such as the SGIP rebate (if available) and the California sales tax exemption on storage equipment.

Homeowners in Rancho Mirage interested in this rebate should contact the Rancho Mirage Energy Authority directly to confirm current program availability, eligible battery models, rebate amounts, and application requirements. Program details, including the rebate range and eligibility criteria, may be updated periodically based on available funding.

The federal Clean Electricity Investment Tax Credit (Section 48E) provides a 30% tax credit on the cost of commercial solar energy systems. This credit is available to businesses, commercial property owners, nonprofits (as a direct pay option), and other non-residential entities installing solar in California. Unlike the residential ITC (which has expired), the commercial Section 48E credit remains available in 2026, though on a tightened timeline following recent federal legislation.

To qualify, a commercial solar project must either begin construction before July 4, 2026, or be placed in service by December 31, 2027. Safe-harbor provisions allow projects that have begun construction (by starting physical work or incurring at least 5% of total project costs) to lock in eligibility even if completion extends beyond the deadline. Projects of 1 megawatt (MW) or larger are subject to prevailing wage and apprenticeship requirements to receive the full 30% credit rate.

In addition to the base 30% credit, commercial projects may be eligible for bonus adders, including the Energy Community bonus (for projects in areas with historical fossil fuel employment) and the Low-Income Communities bonus. A companion Production Tax Credit (PTC) of 2.6 cents per kWh is also available as an alternative to the ITC for qualifying commercial solar projects, providing a per-kilowatt-hour credit for the first 10 years of system operation. Businesses should consult a tax professional to determine which credit structure — ITC or PTC — provides the greatest benefit for their specific project.