California Solar That Works for Your Home
California solar can still cut long-term energy costs, especially when paired with smart rate planning and the right battery strategy.
Solar in California
California is still one of the strongest rooftop solar markets in the country because sunshine and power prices both work in a homeowner’s favor. Much of the state receives about 5 to 6 peak sun hours per day, with inland areas often producing more than coastal homes. At the same time, California electric rates are among the highest in the U.S. EIA 2024 data and utility filings put many residential bills roughly in the $160 to $200 per month range, even though average household electricity use is lower than in hotter or colder states.
That combination matters. A properly sized solar system can offset a large share of a home’s daytime usage, reduce exposure to future rate increases, and make an EV, heat pump, or induction upgrade easier to budget for. The tradeoff is that California’s solar economics changed under the Net Billing Tariff, often called NEM 3.0. Exported solar is worth less than it used to be, so the best designs now focus on using more power at home and, for many households, adding battery storage.
Honest Watts helps California homeowners compare solar in that newer reality. We look at roof condition, shade, utility territory, time-of-use rates, battery value, financing terms, and available incentives before matching you with vetted local installers. The goal is not the biggest system possible. It is a system that fits your bill, your roof, and the way you use electricity.
What it costs
How much do solar panels cost in California?
As of 2026, California residential solar pricing commonly falls around $2.30 to $3.00 per watt before incentives, based on recent EnergySage marketplace data and NREL residential cost benchmarks. That means a 6 kW system often lands near $13,800 to $18,000 before incentives, while a larger 10 kW system may run about $23,000 to $30,000 before incentives. Prices vary by roof type, electrical work, equipment, installer overhead, and whether the project includes battery storage.
The 30% federal Residential Clean Energy Credit for homeowner-owned solar ended on December 31, 2025 under the One Big Beautiful Bill Act, so California homeowners who buy a system with cash or a loan and place it in service in 2026 receive $0 from that federal credit. Third-party-owned systems, including leases, PPAs, and prepaid solar, can still benefit from the Section 48E commercial clean energy credit through 2027. In those cases, the provider claims the credit and may pass savings through in the monthly payment or kWh rate.
A typical California home may need 6 to 10 kW of solar, but usage matters more than square footage. A coastal home with modest air conditioning may need less. A Central Valley home with summer cooling, a pool pump, or an EV may need more. Under current rate structures, many well-designed solar-only projects fall in the 7 to 11 year payback range, driven mainly by electricity-rate savings, state and local incentives, and utility program value, while solar-plus-storage can stretch longer unless the home has high evening usage, frequent outages, or access to battery incentives.
Key cost drivers include panel wattage and efficiency, inverter type, roof pitch, tile or flat-roof labor, main panel upgrades, trenching, battery size, and permitting requirements. Honest Watts compares bids on a cost-per-watt basis, but we also check production estimates, warranty terms, and battery assumptions so a lower price does not hide weaker long-term value.
Incentives & tax credits
Solar incentives in California (2026)
The former federal Residential Clean Energy Credit is no longer available for new homeowner-owned residential solar systems placed in service in 2026. That Section 25D credit ended on December 31, 2025 under the One Big Beautiful Bill Act, so California homeowners who buy solar with cash or a loan now receive $0 from the federal residential credit. Third-party-owned systems, such as leases, PPAs, and prepaid solar, can still benefit from the Section 48E commercial clean energy credit through 2027, but the provider claims it and may pass savings through in a lower monthly payment or kWh rate.
California does not offer a broad statewide residential solar tax credit. It does, however, offer a valuable property tax exclusion for active solar energy systems. Under current California law, the added home value from an eligible solar system is excluded from property tax assessment for systems completed before the program’s scheduled sunset, which is currently January 1, 2027. That can matter in a high-home-value market because solar may improve resale appeal without raising the assessed value tied to the system.
Battery incentives are more targeted. The Self-Generation Incentive Program, or SGIP, provides rebates for qualifying energy storage systems in investor-owned utility territories such as PG&E, Southern California Edison, and San Diego Gas & Electric. General-market SGIP funding has often been limited or stepped down, but equity and equity resiliency categories can be much higher, commonly listed around $850 to $1,000 per kWh for eligible low-income, medically vulnerable, wildfire-threat, or outage-prone customers. Availability changes by budget and territory.
California also has programs for specific households and property types. The DAC-SASH program, administered by GRID Alternatives, has offered upfront solar incentives for income-qualified homeowners in disadvantaged communities. SOMAH supports solar on qualifying multifamily affordable housing. Most major utilities no longer provide broad cash rebates for standard rooftop solar, so the right incentive strategy usually comes down to the property tax exclusion, SGIP eligibility, local program availability, and, for leases or PPAs, whether the provider’s Section 48E benefit is reflected in the offer.
Net metering
How net metering works in California
California no longer uses traditional retail net metering for new customers of the three large investor-owned utilities. Homeowners in PG&E, Southern California Edison, and San Diego Gas & Electric territory who submitted interconnection applications after April 14, 2023 are generally placed on the Net Billing Tariff, widely called NEM 3.0. Existing NEM 1.0 and NEM 2.0 customers usually keep their legacy terms for their grandfathering period, but major system changes can affect status.
Under NEM 3.0, imported electricity is billed at the retail time-of-use rate, while exported solar is credited based on California’s avoided cost values. Those export credits change by hour, month, and utility, and they are usually far below retail rates during sunny midday hours. In practical terms, sending excess solar to the grid is much less valuable than using it in the home. Evening electricity can be expensive, so a battery can improve savings by storing afternoon solar and discharging it during peak periods.
This is why California solar design has shifted. A good proposal should not simply maximize annual production. It should model your hourly usage, utility rate plan, roof orientation, battery size, EV charging schedule, and expected export credits. South- and west-facing arrays may be valuable depending on your load profile, and load shifting can change the economics.
Municipal utilities set their own solar compensation rules. Los Angeles Department of Water and Power, SMUD, Pasadena Water and Power, and other public utilities are not governed the same way as PG&E, SCE, and SDG&E. Some offer net metering-like structures, while others use solar billing plans with lower export values. Honest Watts checks your exact utility before estimating savings.
Cities we serve
Solar near you in California
Explore solar costs, incentives, and savings broken down by city.
FAQ
Frequently asked questions
Explore other states
Solar coverage across the country
Costs, incentives, and net-metering policies vary by state. See how solar pencils out where you live.
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