{"id":12549,"date":"2026-01-21T23:57:00","date_gmt":"2026-01-21T23:57:00","guid":{"rendered":"https:\/\/www.solar.com\/learn\/?p=12549"},"modified":"2026-01-22T22:27:23","modified_gmt":"2026-01-22T22:27:23","slug":"is-solar-worth-it-in-california","status":"publish","type":"post","link":"https:\/\/www.solar.com\/learn\/is-solar-worth-it-in-california\/","title":{"rendered":"Is Solar Worth It In California in 2026?"},"content":{"rendered":"<p><strong>Yes, solar is still worth it in California in 2026<\/strong>\u2014but the strategy for unlocking your full savings potential has shifted.<\/p>\n<p>As of January 1, the homeowner-claimed tax credit for buying solar panels has expired. However, California homeowners have a brief window to benefit from the business-claimed tax credit through Third-Party Owned solar options, such as leases, Power Purchase Agreements (PPAs), and Prepaid Solar.<\/p>\n<p>In this new era, your total return on investment, when your savings kick in, and whether solar is &#8220;worth it&#8221; depends largely on <em>how<\/em> you go solar.<\/p>\n<p><strong>Jump Ahead:<\/strong><\/p>\n<ul>\n<li><a href=\"#how\"><em>How\u00a0<\/em>You Go Solar in 2026 Matters<\/a><\/li>\n<li><a href=\"#options\">Comparing Your Solar Options in 2026<\/a><\/li>\n<li><a href=\"#snapshot\">Economic Snapshot: Utility Hikes vs. Solar Savings<\/a><\/li>\n<li><a href=\"#verdict\">Final Verdict: Is Solar Worth It in California?<\/a><\/li>\n<li><a href=\"#faq\">Common Questions About Solar in California<\/a><\/li>\n<\/ul>\n<p>&nbsp;<\/p>\n<gs-injectable background = 'true' border='true' primary_color = '#8b72d3' secondary_color='#f98d7e' utm_campaign = 'get_started_injectable' utm_medium='solar worth it in CA' content_texts = 'true' upper_text='Get custom solar proposals' upper_text_span = 'for your home' lower_text='See how much solar could lower your' lower_text_span = 'electricity costs in California' get_started_text='Get started' only_community_solar='false'><\/gs-injectable>\n<p>&nbsp;<\/p>\n<h2><a id=\"how\"><\/a>The 2026 Shift:\u00a0<em>How<\/em> You Go Solar Matters More<\/h2>\n<p>For over a decade, buying solar with cash or a loan was the best path to cost savings for Californians in a position to claim the federal tax credit. With new tax credit rules in 2026, it&#8217;s worth considering a few strategies to see which one best aligns with your savings goals.<\/p>\n<p>Here&#8217;s why:<\/p>\n<ul>\n<li><strong>So Long, Homeowner Tax Credit: <\/strong>Under the &#8220;<a href=\"https:\/\/www.solar.com\/learn\/trump-and-the-fate-of-the-30-solar-tax-credit\/\" target=\"_blank\" rel=\"noopener\">One Big Beautiful Bill<\/a>,&#8221; the federal tax credit claimed directly by homeowners who purchase solar and\/or battery storage ended on January 1, 2026.<\/li>\n<li><strong>Tapping into the Business Tax Credit: <\/strong>Solar leases, PPAs, and Prepaid Solar fall under the category of Third-Party Owned (TPO) solar, and still qualify for a business-claimed federal tax credit through the end of 2027. In a TPO arrangement, the provider claims the tax credit and passes that value to you in the form of lower monthly payments or a discount to the upfront cost of going solar.<\/li>\n<\/ul>\n<p><strong>The Result:\u00a0<\/strong>Buying solar and\/or battery in 2026 means paying full price, while TPO options allow you to benefit from a federal tax credit.<\/p>\n<p>&nbsp;<\/p>\n<h2><a id=\"options\"><\/a>Comparing Your California Solar Options in 2026<\/h2>\n<p>With new tax credit rules, there are three basic options for going solar in California.<\/p>\n<h3><strong>Direct Purchase (cash or loan)<\/strong><\/h3>\n<p>Own and control the system from Day 1 with no restrictions on equipment selection. Even without a tax credit to claim, direct ownership can provide substantial long-term energy cost savings in California.<\/p>\n<h3><strong>Standard Lease or PPA<\/strong><\/h3>\n<p>Go solar for $0 down and make monthly payments to a third-party owner who monitors and maintains the system. Best described as &#8220;switching utilities&#8221; to lock in a lower, more predictable cost of electricity.<\/p>\n<p><strong>Related reading:\u00a0<\/strong><a href=\"https:\/\/www.solar.com\/learn\/solar-lease-vs-ppa\/\" target=\"_blank\" rel=\"noopener\">Solar Lease vs. PPA in 2026: Find Your Best Path to Savings<\/a><\/p>\n<h3><strong>Prepaid Solar<\/strong><\/h3>\n<p>Pay upfront or finance solar for around 70% of the cost to purchase a comparable system. Think of this as a &#8220;service-to-ownership&#8221; model. A third-party provider owns and maintains the system for the first 5 years, after which you have the option to &#8220;buyout&#8221; the contract (typically at little to no cost, since the balance is paid upfront).\u00a0See our guide to <a href=\"https:\/\/www.solar.com\/learn\/prepaid-solar-leases-ppas\/\" target=\"_blank\" rel=\"noopener\">Prepaid Solar Leases &amp; PPAs here<\/a>.<\/p>\n<p>&nbsp;<\/p>\n<table style=\"border-collapse: collapse; width: 100%;\">\n<tbody>\n<tr>\n<td style=\"width: 25%;\">Feature<\/td>\n<td style=\"width: 25%;\">Direct Ownership (Cash\/Loan)<\/td>\n<td style=\"width: 25%;\">Prepaid Solar<\/td>\n<td style=\"width: 25%;\">Standards Lease\/PPA<\/td>\n<\/tr>\n<tr>\n<td style=\"width: 25%;\">Federal tax credit<\/td>\n<td style=\"width: 25%;\">None<\/td>\n<td style=\"width: 25%;\">Claimed by provider, applied as discount to upfront cost<\/td>\n<td style=\"width: 25%;\">Claimed by provider, applied as discount to monthly payments<\/td>\n<\/tr>\n<tr>\n<td style=\"width: 25%;\">State\/Local Incentives<\/td>\n<td style=\"width: 25%;\">Claimed by homeowner<\/td>\n<td style=\"width: 25%;\">Claimed by provider, applied as discount to upfront cost<\/td>\n<td style=\"width: 25%;\">Claimed by provider, applied as discount to monthly payments<\/td>\n<\/tr>\n<tr>\n<td style=\"width: 25%;\">Upfront cost<\/td>\n<td style=\"width: 25%;\">Full price<\/td>\n<td style=\"width: 25%;\">Typically 70% of direct purchase<\/td>\n<td style=\"width: 25%;\">Often $0<\/td>\n<\/tr>\n<tr>\n<td style=\"width: 25%;\">Monitoring &amp; Maintenance<\/td>\n<td style=\"width: 25%;\">Homeowner&#8217;s responsibility<\/td>\n<td style=\"width: 25%;\">Provider&#8217;s responsibility until homeowner exercises option to take ownership<\/td>\n<td style=\"width: 25%;\">Provider&#8217;s responsibility<\/td>\n<\/tr>\n<tr>\n<td style=\"width: 25%;\">Equipment selection<\/td>\n<td style=\"width: 25%;\">No restrictions<\/td>\n<td style=\"width: 25%;\">Restricted by tax credit rules<\/td>\n<td style=\"width: 25%;\">Restricted by tax credit rules<\/td>\n<\/tr>\n<tr>\n<td style=\"width: 25%;\">Best for<\/td>\n<td style=\"width: 25%;\">Total system control and long-term ROI<\/td>\n<td style=\"width: 25%;\">Greatest long-term ROI<\/td>\n<td style=\"width: 25%;\">Greatest immediate monthly savings<\/td>\n<\/tr>\n<\/tbody>\n<\/table>\n<h2><\/h2>\n<h2><a id=\"snapshot\"><\/a>California Economic Snapshot: Utility Hikes vs. Solar Savings<\/h2>\n<p>California remains one of the most expensive states for grid power, with the average bill effectively <a href=\"https:\/\/www.siliconvalley.com\/2024\/07\/29\/electric-bills-have-essentially-doubled-over-the-past-decade\/\"><em>doubling\u00a0<\/em>over the last 10 years<\/a> and more rate increases expected. Here&#8217;s what homeowners are facing in 2026:<\/p>\n<ul>\n<li><b data-path-to-node=\"12,0,0\" data-index-in-node=\"0\">Utility Rate Inflation:<\/b> Average California rates now sit at 31 to 34 cents per kilowatt-hour (kWh), nearly double the national average.<\/li>\n<li data-path-to-node=\"10,1,0\"><b data-path-to-node=\"10,1,0\" data-index-in-node=\"0\">The &#8220;Worth It&#8221; Threshold:<\/b> Most California households reach &#8220;solar parity&#8221; (where solar is cheaper than the grid) if their monthly bill exceeds $150.<\/li>\n<li data-path-to-node=\"10,2,0\"><b data-path-to-node=\"10,2,0\" data-index-in-node=\"0\">Battery Necessity:<\/b> Under <a href=\"https:\/\/www.solar.com\/learn\/nem-3-0-proposal-and-impacts-for-california-homeowners\/\" target=\"_blank\" rel=\"noopener\">NEM 3.0<\/a>, exporting solar energy to the grid is less profitable for customers of SCE, PG&amp;E, and SDG&amp;E. To make solar &#8220;worth it&#8221; in 2026, nearly all systems now include a battery to store your power for use during expensive &#8220;Peak&#8221; hours (4 PM \u2013 9 PM) when prices can reach over\u00a0<a href=\"https:\/\/www.solar.com\/learn\/sce-time-of-use-tou-rates-a-beginners-guide\/\" target=\"_blank\" rel=\"noopener\"><em>70 cents<\/em><em> per kWh.<\/em><\/a><\/li>\n<\/ul>\n<h3>2026 Rate Comparison by Major Utility<\/h3>\n<table style=\"border-collapse: collapse; width: 100%; height: 96px;\">\n<tbody>\n<tr style=\"height: 24px;\">\n<td style=\"width: 33.3333%; height: 24px;\">Utility Provider<\/td>\n<td style=\"width: 33.3333%; height: 24px;\">Avg. Bundled Residential Rate (per kWh)<\/td>\n<td style=\"width: 33.3333%; height: 24px;\">2026 Trend<\/td>\n<\/tr>\n<tr style=\"height: 24px;\">\n<td style=\"width: 33.3333%; height: 24px;\">PG&amp;E<\/td>\n<td style=\"width: 33.3333%; height: 24px;\"><a href=\"https:\/\/www.pge.com\/assets\/pge\/docs\/account\/rate-plans\/electric-rate-advisory-0925.pdf\" target=\"_blank\" rel=\"noopener\">43-45 cents<\/a><\/td>\n<td style=\"width: 33.3333%; height: 24px;\">Rising due to undergrounding projects<\/td>\n<\/tr>\n<tr style=\"height: 24px;\">\n<td style=\"width: 33.3333%; height: 24px;\">SCE<\/td>\n<td style=\"width: 33.3333%; height: 24px;\"><a href=\"https:\/\/www.sce.com\/save-money\/rates-financing\/sce-rate-advisory\/20251001\" target=\"_blank\" rel=\"noopener\">33-35 cents<\/a><\/td>\n<td style=\"width: 33.3333%; height: 24px;\">12.9% increase took effect in late 2025<\/td>\n<\/tr>\n<tr style=\"height: 24px;\">\n<td style=\"width: 33.3333%; height: 24px;\">SDG&amp;E<\/td>\n<td style=\"width: 33.3333%; height: 24px;\"><a href=\"https:\/\/www.sdge.com\/sites\/default\/files\/October2025ElectricRateChangeAlert.pdf\">40-42 cents<\/a><\/td>\n<td style=\"width: 33.3333%; height: 24px;\">Series of rate hikes approved through 2027<\/td>\n<\/tr>\n<\/tbody>\n<\/table>\n<p>There&#8217;s reason to believe California utility rates will continue rising for the foreseeable future. Page 63 of this <a href=\"https:\/\/www.cpuc.ca.gov\/-\/media\/cpuc-website\/divisions\/office-of-governmental-affairs-division\/reports\/2025\/2025-sb-695-report_093025.pdf\" target=\"_blank\" rel=\"noopener\">2025 report by the CPUC<\/a> (the board that approves utility rate hikes) forecasts <strong>6-7% average annual rate increases through 2028<\/strong>\u00a0for all three utilities listed above.<\/p>\n<p>&nbsp;<\/p>\n<h2><a id=\"verdict\"><\/a>Final Verdict: Is Solar Worth It in California?<\/h2>\n<p>If your average monthly electric bill is over $150, solar is absolutely worth it to lower your electricity costs, protect your home from power outages, and power your home with clean energy. With new tax credit rules in 2026, <em>how\u00a0<\/em>you go solar matters more than ever. Start by considering your savings goals.<\/p>\n<ul>\n<li><strong>If your goal is immediate bill<\/strong>\u00a0<strong>relief<\/strong>, then a standard lease or PPA with $0 upfront cost can be a good fit. Also, consider financing a Prepaid Solar project to spread the cost of solar over consistent monthly payments.<\/li>\n<li><strong>If you&#8217;d rather invest in greater long-term savings,\u00a0<\/strong>then paying upfront for a direct purchase or Prepaid Solar project is likely a better fit.<\/li>\n<\/ul>\n<p>Schedule a strategy session with an expert Energy Advisor to see which option is best for your home.<\/p>\n<p>&nbsp;<\/p>\n<gs-injectable background = 'true' border='true' primary_color = '#8b72d3' secondary_color='#f98d7e' utm_campaign = 'get_started_injectable' utm_medium='solar worth it in CA' content_texts = 'true' upper_text='Get custom solar proposals' upper_text_span = 'for your home' lower_text='See how much solar could lower your' lower_text_span = 'electricity costs in California' get_started_text='Get started' only_community_solar='false'><\/gs-injectable>\n<p>&nbsp;<\/p>\n<h2><a id=\"faq\"><\/a>Common Questions About Solar in California<\/h2>\n<h3>Did I miss the federal solar tax credit?<\/h3>\n<p>Only if you buy the system outright and it wasn&#8217;t installed before January 1, 2026. There is still a business-claimed solar tax credit available through the end of 2027 that homeowners can benefit from via Third-Party Owned solar. In a standard PPA or a lease, this tax credit is &#8220;baked into&#8221; your lower monthly rate. If you choose a Prepaid Solar option, the tax credit is claimed by the provider and applied as a discount to your upfront solar costs.<\/p>\n<h3>Is a battery really required in California?<\/h3>\n<p>Technically, no, but financially, yes. Under NEM 3.0, utilities pay very little for the excess solar power you send to the grid. Adding a battery improves your solar savings by storing your excess solar power to avoid using grid electricity during expensive &#8220;Peak&#8221; evening hours.<\/p>\n<h3>Does solar work during a PSPS (Public Safety Power Shutoff)?<\/h3>\n<p>Only if you have a backup-enabled battery storage system. Solar-only systems shut down during grid outages as a safety measure to protect utility lineworkers. With solar plus backup battery, you can continue producing, storing, and using solar power during PSPS events and other outages.<\/p>\n<p>&nbsp;<\/p>\n","protected":false},"excerpt":{"rendered":"<p>Yes, solar is still worth it in California in 2026\u2014but the strategy for unlocking your full savings potential has shifted. As of January 1, the homeowner-claimed tax credit for buying&#8230;<\/p>\n","protected":false},"author":51,"featured_media":12551,"comment_status":"open","ping_status":"closed","sticky":false,"template":"","format":"standard","meta":{"content-type":""},"categories":[3,72],"tags":[],"yoast_head":"<!-- This site is optimized with the Yoast SEO Premium plugin v19.5 (Yoast SEO v19.10) - https:\/\/yoast.com\/wordpress\/plugins\/seo\/ -->\n<title>Is Solar Worth It In California in 2026? | Solar.com<\/title>\n<meta name=\"robots\" content=\"index, follow, max-snippet:-1, max-image-preview:large, max-video-preview:-1\" \/>\n<link rel=\"canonical\" href=\"https:\/\/www.solar.com\/learn\/is-solar-worth-it-in-california\/\" \/>\n<meta property=\"og:locale\" content=\"en_US\" \/>\n<meta property=\"og:type\" content=\"article\" \/>\n<meta property=\"og:title\" content=\"Is Solar Worth It In California in 2026?\" \/>\n<meta property=\"og:description\" content=\"Yes, solar is still worth it in California in 2026\u2014but the strategy for unlocking your full savings potential has shifted. 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