California Solar Panels

The Self-Generation Incentive Program (SGIP) Residential Solar and Storage Equity (RSSE) budget is the only active SGIP pathway in 2026. Funded by $280 million in state dollars under AB 209, it offers $3,100 per kW for paired solar and $1,100 per kWh for battery storage — generous enough to cover 100% of system costs for many households. For example, a typical 7 kW solar system paired with a 10 kWh battery could receive up to $21,700 for solar and $11,000 for the battery, totaling $32,700 in incentives.

To qualify, your household income must be at or below 80% of the Area Median Income (AMI), or you must be enrolled in the CARE, FERA, or ESA utility assistance programs. You must also be a residential customer of PG&E, SCE, SDG&E, SoCalGas, or LADWP. Systems must be sized to the home’s actual electricity usage — batteries larger than 15 kWh for single-family homes require justification based on energy consumption.

As of early 2026, the $280 million budget is fully reserved, but new applications are accepted on a waitlist and funded as existing reservations cancel. The best way to apply is through an SGIP-approved installer. All applicants must enroll in a qualified Demand Response program within one year of reserving funds. Check current funding availability at selfgenca.com.

The Disadvantaged Communities – Single-Family Affordable Solar Homes (DAC-SASH) program provides an upfront rebate of up to $3 per watt for solar installations, which can cover $12,000–$15,000 of the cost of a typical 4–5 kW system. The program is funded at $8.5 million annually and remains active through 2030, making it one of the most valuable solar incentives available to qualifying Californians in 2026.

To be eligible, you must: (1) receive electrical service from PG&E, SCE, or SDG&E; (2) own and occupy a single-family home as your primary residence; (3) live in a Disadvantaged Community (DAC) as identified by the CalEnviroScreen 4.0 map; and (4) have a total household income within CARE or FERA program limits. You can verify your address using the CalEnviroScreen tool at oehha.ca.gov/calenviroscreen.

The program is administered by GRID Alternatives, a nonprofit solar installer. The rebate covers equipment and installation costs, though out-of-pocket expenses may apply for roof repairs, panel upgrades, or permitting fees. To get started, complete the online eligibility form at gridalternatives.org or call GRID Alternatives toll-free at (866) 921-4696 for a pre-screening conversation.

Under California Revenue & Taxation Code §73, active solar energy systems are excluded from property tax reassessment. This means that even though a solar installation can add $15,000–$30,000 in market value to your home, your property taxes will not increase as a result. This exclusion applies automatically — no special application is required — and is available to all California homeowners regardless of income.

The exclusion currently applies to systems that are fully installed and have received Permission to Operate (PTO) from their utility before January 1, 2027. As of April 2026, no extension has been enacted, so homeowners should plan installations with enough lead time to complete the process before the deadline. The exclusion covers solar panels, inverters, and related equipment that are part of an active solar energy system.

This incentive is especially valuable when combined with other programs like SGIP RSSE or DAC-SASH, since it protects long-term affordability by keeping your annual property tax bill unchanged for the life of your system. It is one of the few solar incentives available to all California homeowners, not just those who meet income requirements.

The Sacramento Municipal Utility District (SMUD) My Energy Optimizer Partner+ program is one of the most generous battery storage incentives available from any California utility in 2026. Eligible SMUD customers can receive a rebate of up to $5,400 per Tesla Powerwall, with a household cap of $10,000, paid by check after installation. This rebate requires no personal tax credit and is available regardless of income level.

In addition to the upfront rebate, enrolled customers earn $440 per year per Powerwall through SMUD’s Virtual Power Plant (VPP) program, in which SMUD can draw on your battery during peak grid demand events. These ongoing payments can significantly improve the financial return of a battery storage investment over time. To qualify, customers must enroll within 90 days of receiving Permission to Operate (PTO) on SMUD’s Solar and Storage Rate.

This program is available exclusively to customers in SMUD’s service territory (primarily Sacramento County). SMUD also maintains full retail-rate net metering for solar exports — a major advantage over PG&E, SCE, and SDG&E customers on NEM 3.0. The combination of the battery rebate, VPP payments, and favorable net metering makes SMUD’s service area one of the best in California for solar-plus-storage economics in 2026.

Alameda Municipal Power (AMP) offers a one-time $500 rebate for eligible homeowners who install a new solar panel system. This local utility incentive is available to AMP customers whose total household income is below $106,000 and who are installing solar on a home that was built before 2020. While modest compared to state-level programs, it can be stacked with other incentives for additional savings.

This rebate is specific to customers served by Alameda Municipal Power, which provides electricity to the City of Alameda. Homeowners interested in this rebate should contact AMP directly to confirm current program availability, eligibility requirements, and the application process before beginning their solar installation.

Local utility rebates like this one are worth checking even if you are not in Alameda — other municipal utilities and Community Choice Aggregators (CCAs) across California may offer similar programs. Always verify current availability directly with your utility, as program funding and terms can change.

California’s Net Billing Tariff (NEM 3.0) applies to all new residential solar interconnections made on or after April 15, 2023, for customers of PG&E, SCE, and SDG&E. Under NEM 3.0, excess solar energy exported to the grid earns credits based on time-varying avoided-cost rates averaging approximately $0.05–$0.08 per kWh — roughly 75% less than the retail rates (~$0.30–$0.35/kWh) credited under the previous NEM 2.0 policy. This makes battery storage economically essential for new solar customers, as storing energy for self-consumption is far more valuable than exporting it.

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. However, starting July 1, 2026, customers who have been on their existing NEM tariff for 10 or more years will be transitioned to the current NEM version (NEM 3.0) under AB 942.

Municipal utility customers have a significant advantage: LADWP and SMUD operate their own net metering programs and currently credit solar exports at full retail rates ($0.22–$0.34/kWh for LADWP), making solar economics considerably more favorable in those service territories. If you are a PG&E, SCE, or SDG&E customer, pairing solar with battery storage is strongly recommended to maximize self-consumption and offset the lower export rates under NEM 3.0.

The Disadvantaged Communities Green Tariff (DAC-GT) is designed for income-qualified residents in disadvantaged communities who are unable to install rooftop solar — including renters, condo owners, and homeowners with unsuitable roofs. Participants receive 100% renewable energy plus a 20% discount off their otherwise applicable utility rate, providing meaningful savings without requiring any solar installation or upfront investment.

The program is available through PG&E, SCE, SDG&E, and many Community Choice Aggregators (CCAs) across California. Eligibility is based on income qualification and residence in a designated disadvantaged community as identified by CalEnviroScreen 4.0. This makes it an accessible alternative for households that cannot benefit from rooftop solar programs like DAC-SASH or SGIP RSSE.

While DAC-GT does not involve solar panels or battery storage on your property, it is an important clean energy incentive for Californians who face barriers to direct solar ownership. Contact your utility provider or visit the CPUC website to check eligibility and enrollment availability in your area.

Property Assessed Clean Energy (PACE) financing allows California homeowners to install solar panels and battery storage systems with no upfront cost. Instead of a traditional loan, the financing is tied to your property and repaid over 10–20 years as an addition to your annual property tax bill. Because the debt is secured by the property rather than the borrower, PACE programs typically offer lower interest rates than unsecured personal loans.

PACE financing is available statewide through providers such as Ygrene and Renew Financial. It is particularly useful for homeowners who do not qualify for income-based programs like SGIP RSSE or DAC-SASH, and who want to avoid a large upfront payment. If you sell your home before the financing is paid off, the remaining balance transfers to the new owner as part of the property — which must be disclosed to buyers.

Important considerations: PACE financing can complicate mortgage refinancing and may affect your ability to sell the home, as some lenders are cautious about properties with PACE liens. Carefully review the terms, interest rate, and total repayment cost before enrolling. PACE is a financing tool, not a grant or rebate, so the full system cost is still paid over time. Visit California’s Energy Upgrade CA portal for more information on available PACE programs in your area.

While the federal residential solar tax credit (25D) has expired for homeowner-purchased systems, the commercial Investment Tax Credit (ITC-48E) remains available for third-party owned solar systems — including those installed under leases and Power Purchase Agreements (PPAs). Solar companies that own and install systems on residential rooftops can claim a base credit of 30% of system costs, with bonus adders of up to 10% each for projects in low-income communities, energy communities, or on Indian land — potentially reaching 40% or more.

For homeowners, the most practical benefit comes through prepaid solar leases: because the third-party owner claims the commercial ITC, they can pass the equivalent ~30% savings directly to you as a reduced purchase price at the point of sale. This effectively replicates the financial benefit of the expired residential ITC without requiring you to have any personal tax liability. PPAs offer a similar benefit — you pay nothing upfront and lock in a per-kWh rate below your utility’s current price.

To qualify for the commercial ITC, projects must begin construction before July 4, 2026. Projects that miss this deadline must be placed in service by December 31, 2027 to remain eligible. If you are considering a solar lease or PPA, act promptly to ensure your provider can begin construction in time to capture the credit and pass the savings to you. LightReach is currently the only California PPA provider offering battery storage under the same agreement — an important consideration for PG&E and SCE customers under NEM 3.0.