If you’ve been tossing around the idea of adding solar panels to your California home, you’ve probably heard there are tax credits and incentives that can help with the cost. The tricky part is figuring out which ones are actually still around.
A lot has changed in recent years. Some of the incentives homeowners could count on in previous years have ended, while several California-specific programs are still available if you meet the requirements. Depending on your household and the system you’re planning, there could still be money on the table.
What Happened to the Federal Solar Tax Credit in 2026?
For years, the federal Residential Clean Energy Credit was one of the biggest financial perks of installing solar. Homeowners could claim a credit equal to 30% of qualifying costs for solar panels, battery storage, and certain other clean energy improvements.
But when 2026 rolled around, that credit disappeared. Under legislation passed in 2025, the Residential Clean Energy Credit ended early, meaning you can’t claim it for new qualifying systems installed after December 31, 2025.
But if you finished up your project in 2025, you might still be able to claim that credit on your 2025 federal tax return.
What Solar Incentives Are Available in California in 2026?
California doesn’t offer one blanket rebate that every homeowner gets for installing a solar power system. The programs still available in 2026 are more targeted, with some of the biggest incentives reserved for households that meet certain income or location requirements.
These incentives include:
SGIP Solar and Battery Incentives
California’s Self-Generation Incentive Program (SGIP) offers incentives for low-income households installing solar paired with battery storage.
Through its Residential Solar and Storage Equity program, eligible customers can receive $3.10 per watt for solar and $1.10 per watt-hour for battery storage.
Those numbers add up pretty fast.
At current incentive rates, a 5-kilowatt (kW) solar system could qualify for up to $15,500 for the solar portion, while a 15-kilowatt-hour (kWh) battery could qualify for an additional $16,500. Incentives are capped at 30 kWh for single-family battery storage.
There are a few catches, though. Your solar power system has to be paired with battery storage to qualify under this program, and customers have to meet the program’s low-income eligibility requirements (at or below 80% of the area median income).
DAC-SASH
If you meet certain income and location requirements, you may qualify for a no-cost rooftop solar system through California’s Disadvantaged Communities – Single-family Solar Homes (DAC-SASH) program.
But once again, eligibility for this incentive is quite specific.
You generally need to own and live in the home as your primary residence, qualify for the CARE or FERA income guidelines, and live in a qualifying disadvantaged community or California Indian Country.
Your home also needs to be in PG&E, Southern California Edison, or San Diego Gas & Electric territory.
For eligible households, DAC-SASH provides an incentive toward the cost of the solar system. GRID Alternatives handles the program statewide and oversees the design, contracting, and installation of systems funded through it.
California Solar Property Tax Exclusion
Installing a solar power system can add value to your property, which, under normal circumstances, would probably raise your property taxes. But in California, qualifying systems completed in 2026 can still benefit from the state’s Active Solar Energy System New Construction Exclusion.
Under the exclusion, the value added by a qualifying solar energy system isn’t treated as new construction for property tax assessment purposes.
Now, for this one, timing matters. The law is set to expire on January 1, 2027, so that means your project needs to be finished during 2026 to qualify.
How Does California’s Solar Billing Plan Affect Solar Savings?
California’s Net Billing Tariff, often called NEM 3.0, doesn’t give you an upfront rebate for installing solar, but it does affect how much your system can save you over time. If your panels produce more electricity than your home is using, the extra power can be sent to the grid in exchange for bill credits.
Those credits are based on the electricity’s value to the grid at the time it’s exported rather than the retail rate you pay for electricity. That means the value can change depending on the time of day and year.
This setup has made battery storage a bigger part of the solar equation.
A battery can store some of the electricity your panels produce during the day so you can use it later instead of buying as much power from the grid. It can also give you more control over when you export electricity.
How Much Does Solar Cost After Incentives in California?
Solar still comes with a pretty sizable upfront price tag. The current cost of an installed solar system in California is about $2.48 per watt. For the average 8.9 kW system, that comes out to $22,100 before incentives.
What you actually pay can look quite different depending on which California programs you qualify for. If you don’t meet the requirements for an income-based incentive, you may pay close to the full installation price in 2026, given that the federal tax credit isn’t available anymore.
If you qualify for programs like SGIP or DAC-SASH, the difference can be much larger. SGIP’s Residential Solar and Storage Equity incentives can offset qualifying solar and battery costs, while DAC-SASH can provide no-cost rooftop solar to eligible homeowners.
But because these programs have pretty narrow eligibility requirements, it’s best not to treat those savings as representative of what the average California homeowner will pay.
2026 Federal & California Solar Incentives: Frequently Asked Questions
The rules around solar incentives have shifted so much that advice from even a year or two ago may no longer apply. If you’re considering solar in 2026, these are a few of the questions you might run into as you sort through what’s still on the table.
Is there a federal solar tax credit in 2026?
Unfortunately, no. The federal Residential Clean Energy Credit ended for expenditures made after December 31, 2025. Before it expired, homeowners could claim a credit equal to 30% of qualifying costs for improvements that included solar electric systems and battery storage.
Can I claim the 30% tax credit if I installed solar in 2025?
You may still qualify if your system was installed by the end of 2025. The IRS treats an expenditure for an improvement as made when the original installation is complete, so a system completed in 2025 may qualify for the credit even though you’re filing your return in 2026.
Does California have a state solar tax credit?
Not currently. Instead, qualifying homeowners may be able to save through programs such as SGIP and DAC-SASH, along with California’s property tax exclusion for qualifying solar energy systems completed before the current deadline.
How much is the California solar rebate in 2026?
There’s not a single standard rebate amount for every California homeowner. SGIP’s Residential Solar and Storage Equity program, for example, offers qualifying low-income households $3.10 per watt for solar and $1.10 per watt-hour for battery storage.
Other programs have their own benefits and eligibility requirements.
Can I get free solar panels in California?
Possibly, if you meet the requirements for DAC-SASH. The program provides no-cost rooftop solar installations for qualifying low-income homeowners in designated communities. Eligibility depends on factors that include your income, home, location, and electric utility.
Does solar increase my California property taxes?
Not if you finish installing the system before January 1, 2027. California currently has an Active Solar Energy System New Construction Exclusion that leaves the value added by a qualifying solar system out for property tax assessment purposes.
Are solar batteries eligible for California incentives in 2026?
They sure are.
California’s Self-Generation Incentive Program (SGIP) includes incentives for qualifying residential battery storage projects. Under the Residential Solar and Storage Equity program, eligible low-income customers can get $1.10 per watt-hour of storage capacity, subject to the program’s eligibility requirements and incentive limits.
See What a Solar Power System May Cost for Your California Home
Solar incentives look different in 2026, but there may still be opportunities to bring down the cost of your project. The programs you qualify for depend on your household, property, utility, and the type of system you’re considering.
Fisher Electric can help you explore your solar and battery options for your home and understand how the available incentives may factor into your project. Give us a call to schedule a consultation and see what solar could look like for your home.
Sources & References
- EnergySage – “California Solar Panel Cost: 2026 Prices and Savings”
Provides current California solar installation cost data, including average cost per watt and estimated system costs based on system size.
https://www.energysage.com/local-data/solar-panel-cost/ca - Lawrence Berkeley National Laboratory – “One Year In: Tracking the Impacts of NEM 3.0 on California’s Residential Solar Market”
Examines the effects of California’s NEM 3.0 policy on residential solar installations and battery storage adoption following the transition to the state’s Net Billing Tariff.
https://emp.lbl.gov/publications/one-year-tracking-impacts-nem-30 - California State Board of Equalization – “Active Solar Energy System New Construction Exclusion”
Explains California’s property tax exclusion for qualifying active solar energy systems, including the current Jan. 1, 2027 sunset date and how the exclusion applies to qualifying installations.
https://www.boe.ca.gov/proptaxes/active-solar-energy-system - California Public Utilities Commission – “Self-Generation Incentive Program (SGIP)”
Provides information about California’s SGIP, including residential solar and battery storage incentives, program eligibility, and available incentive categories.
https://www.cpuc.ca.gov/sgip - GRID Alternatives – “Disadvantaged Communities – Single-family Solar Homes (DAC-SASH)”
Outlines the DAC-SASH program, including no-cost solar installations for qualifying California homeowners and the income, location, utility, and homeownership requirements for participation.
https://gridalternatives.org/what-we-do/program-administration/dac-sash - Internal Revenue Service – “FAQs for Modification of Sections 25C, 25D, 25E, 30C, 30D, 45L, 45W, and 179D Under Public Law 119-21”
Clarifies changes to the Residential Clean Energy Credit under 2025 legislation, including its termination after Dec. 31, 2025, and how the installation-completion date affects eligibility.
https://www.irs.gov/newsroom/faqs-for-modification-of-sections-25c-25d-25e-30c-30d-45l-45w-and-179d-under-public-law-119-21-139-stat-72-july-4-2025-commonly-known-as-the-one-big-beautiful-bill-obbb - Internal Revenue Service – “Residential Clean Energy Credit”
Explains the federal Residential Clean Energy Credit, qualifying clean energy improvements, credit amounts, and the rules affecting residential projects completed through the end of 2025.
https://www.irs.gov/credits-deductions/residential-clean-energy-credit
