California is the biggest solar market in the country, and 2026 carries a time-sensitive twist: the state’s solar property-tax exclusion is set to sunset on January 1, 2027, making 2026 the last “safe” year to lock it in. Combined with high electricity rates, the case for acting this year is strong.
California Solar Incentives in 2026
- No federal tax credit on a 2026 cash or loan purchase - Section 25D expired 31 December 2025.
- Property-tax exclusion — the added home value is not taxed, but this is set to sunset Jan 1, 2027. Installing in 2026 locks it in.
- High electricity rates — among the highest in the U.S., so every kWh you offset saves more.
- Net billing (NEM 3.0) — pairing with a battery improves the economics under current rules.
- Local and utility programs, especially for batteries.
Why a Battery Matters More in California
Under California's current net-billing rules, adding a home battery significantly improves your savings because you store your own solar power instead of selling it back at a low rate. Many California buyers now pair solar with storage.
What Solar Costs in California
A typical 7 kW system runs about $21,000 installed, with no federal credit to reduce it in 2026. California's high electricity rates still mean relatively fast payback.
Get my 3 free California solar quotes →
FAQ
What is changing in California in 2027?
The solar property-tax exclusion is set to sunset on January 1, 2027, so installing in 2026 locks in that benefit.
Do I need a battery in California?
Not required, but under current net-billing rules a battery noticeably improves savings, which is why many California homeowners add one.
Related
General 2026 guidance, not tax advice. Verify current California rules (including the 2027 sunset and net-billing) before purchasing.