Guide
Solar incentives and rebates in California
The honest version, including the part most solar advertising has not caught up with.
The 30% federal credit has ended for homeowners
The Section 25D Residential Clean Energy Credit was terminated by the reconciliation law signed on 4 July 2025, for expenditures made after 31 December 2025. There was no phase-down. A homeowner who buys a system outright — cash or loan — in 2026 receives no federal tax credit.
A great many calculators and quotes still apply 30% automatically. If you are comparing proposals, check whether the savings you have been shown assume a credit that no longer exists — on a typical system it is a five-figure difference in what you actually pay.
Our estimator applies no federal credit for an owned system, which is why its prices may look higher than a competitor’s. The system is not more expensive; the arithmetic is current.
Third-party ownership is treated differently
Section 48E, the commercial credit, was not terminated on the same schedule. It is claimed by the owner of the system, so it can apply to a lease or a power purchase agreement, where the provider owns the equipment and you buy the output. The value reaches you as a lower rate rather than as a credit on your return.
That is a genuinely different product with different consequences — particularly when you sell the house, because the contract has to be settled or assumed by the buyer. It is worth understanding before you sign, not after.
State and local programmes
California has run incentives for battery storage through the Self-Generation Incentive Program, with higher tiers for households in high fire-threat districts, on medical baseline, or on low-income tariffs. Several municipal utilities in and around the Valley have also run their own solar and storage rebates from time to time.
We are deliberately not printing amounts here. These programmes are budgeted, they open and close, the tiers change, and a figure typed onto a website a year ago is worse than no figure at all. Ask us what is actually open for your address and utility when you are ready to move, and we will tell you what we can currently evidence.
The incentive that is easy to overlook
For most Valley homeowners the largest single financial factor is not a rebate at all — it is which utility serves the property. LADWP is municipally owned and still credits exported solar at close to the retail rate. SCE is on NEM 3.0, where exports earn a fraction of that. The same house, the same roof and the same array produce materially different savings on either side of that boundary, and no rebate on offer closes the gap.
Check which applies to your address — the estimator identifies your utility and prices to its rules.
This page is general information about publicly announced programmes, not tax advice. Whether you can use a credit depends on your own tax position, and that is a question for your accountant.
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