California is still one of the best places in the U.S. to go solar, but 2026 looks very different than 2022–2025.
- Electricity prices remain among the highest in the nation, so every kilowatt-hour you avoid buying from the grid is valuable.
- New solar customers are generally on California’s Net Billing Tariff (sometimes called “NEM 3.0”), which makes exporting power to the grid less lucrative than it used to be.
- Investor-owned utilities (PG&E, SCE, SDG&E) are rolling out a new fixed monthly charge structure in late 2025 and early 2026.
- The federal residential solar tax credit timeline changed, which impacts the math for new installs in 2026.
This guide is written to help you answer one question:
If I install solar now, will it save me real money over the time I live in this home?
Key takeaways (2026 reality check)
- Solar can still be worth it in California in 2026, especially for households with higher usage, Time-of-Use (TOU) peak pricing, and plans to stay in the home long enough to earn back the upfront cost.
- Solar-only savings depend heavily on how much of your solar energy you use in the moment. Under Net Billing, exporting midday solar is often worth much less than offsetting your own evening usage.
- A battery can meaningfully improve payback for many homes, because it increases self-consumption and lets you use your solar when grid power is most expensive.
- Solar will not eliminate your entire bill for most customers going forward, because:
- there are fixed charges and minimum bill components, and
- some usage still comes from the grid (especially at night and during winter).
If you want a fast rule of thumb:
- Usually worth it if you: (1) have a sunny roof, (2) use a lot of electricity, (3) pay high TOU rates, and (4) plan to stay 7+ years.
- Often worth it with a battery if you: (1) are under Net Billing, (2) have higher evening usage, (3) want outage backup, or (4) want to minimize peak-hour buying.
- May not be worth it if you: (1) have low usage, (2) heavy shade, (3) a roof that needs replacement soon, or (4) plan to move very soon.
Why California is still a solar hotspot in 2026
1) Electricity is still expensive (and rate complexity matters)
California’s electricity pricing is not just “high.” It’s also complicated, because your cost depends on:
- Your utility (PG&E, SCE, SDG&E, LADWP, SMUD, etc.)
- Your rate plan (TOU schedules and tiers)
- Season (summer vs winter)
- When you use electricity (peak vs off-peak)
If you want a benchmark for what households are dealing with, start with the average electric bill in California and compare it to your own monthly usage and cents per kWh.
Why this matters for solar: the higher your effective rate per kWh, the more valuable each solar kWh becomes.
2) Some California utilities continue to change rates and billing structures
Utility pricing changes can materially move your solar payback.
- If you’re served by Southern California Edison, review the latest context in our SCE rate changes breakdown.
- If you’re in the City of Los Angeles, use this guide to preparing for LADWP utility rate increases to understand what’s driving bills and what homeowners can do.
Important disclaimer: NRG Clean Power is not your utility and not a regulator. Rate schedules can change. Always confirm pricing details on your utility’s official site.
The biggest changes that affect solar ROI in 2026
1) Net Billing Tariff (NEM 3.0) made “exporting” less valuable
If your solar system is interconnected under California’s Net Billing Tariff (NBT), your bill savings depend much more on self-consumption.
In plain English:
- Solar you use in your home is usually worth close to your full retail electricity rate.
- Solar you export to the grid is compensated based on the grid’s time-varying value (which is often low during midday when solar is abundant).
This is why a battery is more frequently recommended now. A battery can store excess midday production and discharge it later, helping you offset higher-priced evening usage.
If you have an older NEM plan: Many customers who interconnected before the NBT start date are on legacy tariff rules for a long “grandfathering” period. If that’s you, your savings profile can look very different.
2) New fixed monthly charges reduce the “zero bill” dream
Investor-owned utilities in California have been shifting part of grid costs into a separate fixed monthly charge (with discounted tiers for low-income customers).
What this means for solar:
- You can still reduce the usage-based portion of your bill.
- But you should expect a portion of your monthly cost that solar cannot eliminate.
3) The federal residential solar tax credit timeline changed
In 2025, many homeowners relied on a federal credit that lowered the net cost of solar and batteries.
As of February 2026, IRS guidance for the Residential Clean Energy Credit (IRC Section 25D) indicates the credit is not allowed for expenditures made after December 31, 2025. That means most homeowners installing solar in 2026 should plan without a federal 25D credit.
- If your system was installed and placed in service by December 31, 2025, you may still be able to claim the credit when filing your 2025 taxes in 2026.
- For new installs placed in service in 2026, build your ROI math assuming no federal residential clean energy credit.
Tip: Treat tax credit claims as tax matters. Talk to a qualified tax professional if you plan your purchase around a credit.
Cost of solar in California in 2026
Solar pricing varies by:
- system size
- roof type and complexity
- electrical upgrades (main panel upgrades, trenching, etc.)
- equipment choice (panel + inverter brands)
- battery add-on (and backup requirements)
As a practical planning range, many homeowners see installed solar pricing expressed as cost per watt ($/W).
Typical solar-only price range by system size
Below is a simple range to help you sanity-check quotes.
| System size | Typical installed price range (before incentives) |
|---|---|
| 4 kW | $9,600–$13,000 |
| 5 kW | $12,000–$16,250 |
| 6 kW | $14,400–$19,500 |
| 8 kW | $19,200–$26,000 |
| 10 kW | $24,000–$32,500 |
Important: This is not a “quote.” It’s a planning range. Your roof, electrical scope, and utility requirements can push you above or below this.
What about batteries?
A battery can add meaningful cost, but it can also:
- increase self-consumption under Net Billing
- reduce peak-hour buying
- provide backup power (depending on configuration)
Battery pricing varies widely by usable capacity, power output, and backup scope. The best way to evaluate it is to price solar-only and solar-plus-battery side by side.
How much can you save with solar in 2026?
Your solar savings are mostly driven by five inputs:
- Your annual electricity usage (kWh/year)
- Your all-in electricity rate (cents/kWh, including TOU effects)
- Your system production (kWh/year)
- Your self-consumption rate (what you use vs export)
- Any fixed charges and minimum bill components
A realistic savings model for Net Billing
Because exporting is often worth less than self-using, it helps to estimate savings in two scenarios:
- Solar-only: Lower self-consumption (you export more midday energy)
- Solar + battery: Higher self-consumption (you store more midday energy for later)
Here’s a sample model using conservative assumptions:
- Production: ~1,500 kWh per kW per year (varies by location/shading)
- Retail rate value: $0.34/kWh
- Average export credit value: $0.05/kWh (can be higher or lower depending on hour/season)
- Self-consumption: 50% (solar-only) vs 80% (solar + battery)
- 25-year projection assumes 2.5% average annual rate increase (illustrative)
| System size | Est. production (kWh/yr) | Solar-only savings (50% self-use) | Solar + battery savings (80% self-use) | Solar-only 25-year savings* | Solar + battery 25-year savings* |
|---|---|---|---|---|---|
| 4 kW | 6,000 | $1,170 | $1,692 | $39,965 | $57,795 |
| 5 kW | 7,500 | $1,462 | $2,115 | $49,939 | $72,244 |
| 6 kW | 9,000 | $1,755 | $2,538 | $59,947 | $86,692 |
| 8 kW | 12,000 | $2,340 | $3,384 | $79,929 | $115,590 |
| 10 kW | 15,000 | $2,925 | $4,230 | $99,911 | $144,487 |
*These 25-year figures are illustrative projections, not guarantees. Real-world savings depend on rate plan changes, export values, and your usage behavior.
What does this imply for payback?
A simple payback estimate is:
Payback (years) ≈ Net installed cost ÷ annual savings
For example, a 5 kW system in the table above:
- If it costs $12,000 and saves ~$1,462/year, payback is ~8.2 years.
- If it costs $16,250 and saves ~$1,462/year, payback is ~11.1 years.
Batteries can increase annual savings by boosting self-consumption, but they also add cost. The best path is to evaluate battery ROI against:
- your TOU peak pricing
- your export compensation under Net Billing
- your outage/backup needs
When solar is most worth it in California (2026 checklist)
Solar tends to be a strong investment when you check several of these boxes:
- You have a sunny roof (limited shading, good orientation)
- Your roof is in good shape (or you plan to replace it before installing solar)
- You have moderate-to-high usage (higher bills = larger savings potential)
- You can shift loads to daytime (EV charging, laundry, pool pump, HVAC)
- You’re on TOU rates with expensive peaks
- You plan to stay in your home long enough to recoup your investment
Quick “is it worth it?” test you can do from your bill
Grab your last 12 months of bills and do this:
- Add up your annual kWh usage.
- Estimate your effective average rate: total dollars paid ÷ total kWh.
- Multiply your expected solar kWh offset by your effective rate.
- Treat exports as a separate, lower value bucket.
If you want, an installer can do this with your actual interval data and your utility plan.
Other benefits homeowners care about (beyond monthly savings)
1) Backup power and resilience
Wildfire shutoffs, storms, and grid constraints are a real concern in many parts of California.
Solar plus storage can:
- keep critical loads running
- reduce reliance on portable generators
- provide a more stable home energy plan
2) Potential home value and California property tax treatment
A frequently overlooked advantage in California is that the state has had an active solar energy system new construction exclusion that can prevent your property tax assessment from increasing solely because you added a qualifying solar system.
This exclusion has a current sunset date scheduled for January 1, 2027.
(Always confirm how it applies in your county and your situation.)
The bottom line: is solar worth it in California in 2026?
For many California homeowners, yes, solar can still be worth it in 2026.
But the “why” has changed.
- It’s less about getting paid well for exporting energy.
- It’s more about avoiding expensive grid purchases and maximizing self-consumption, often with a battery.
If you want the most accurate answer for your home, the next step is simple:
- Get a proposal based on your actual utility plan and 12-month usage.
- Compare solar-only vs solar + battery.
- Check your roof condition and electrical scope.
If you’d like, request a no-obligation quote so we can model your savings and design the right system for your utility, roof, and goals.