Is solar worth it in California? Homeowners here tend to arrive at that question from a different direction than homeowners in most other states.

It usually isn't curiosity.

It's the bill.

Electricity in California is expensive, and it has been getting more expensive for a long time. Average residential rates in June 2026 sat at roughly 33.7¢ per kWh at PG&E and 34.4¢ at Southern California Edison. At San Diego Gas & Electric, the average was roughly 45.5¢. Those figures are before the California Climate Credit is applied. (A kWh, or kilowatt-hour, is the unit of electricity on your bill.)

For comparison, the national average is somewhere in the high teens.

So the instinct makes sense. When power costs that much, producing some of your own starts to look obvious.

But California changed the rules in 2023, and a lot of the advice still circulating online is describing a system that no longer exists.

The question most Californians are really asking

“Is solar still worth it after the net metering changes?”

“What does solar look like for my home, on my utility, under the rules that apply today?”

California Rates Have Climbed Faster Than Inflation

This is the part that drives most of the interest.

Looking at the ten years from January 2016 through June 2026, residential rates rose approximately:

The Public Advocates Office has noted that rate growth since 2014 has outpaced general inflation by a wide margin.

Rates could level off. They could keep climbing. Nobody can promise either one.

But a homeowner planning around the assumption that electricity will stay exactly where it is today is making an assumption the last decade hasn't supported.

What Changed in 2023, and Why It Matters

On April 15, 2023, California moved new solar customers onto the Net Billing Tariff — the arrangement most people call NEM 3.0.

Here is the short version of what changed.

Under the older net metering rules, electricity you sent to the grid was credited at close to the retail rate. A kilowatt-hour exported was worth roughly the same as a kilowatt-hour you didn't have to buy.

Under the Net Billing Tariff, exported electricity is credited at avoided-cost values instead. Those values are considerably lower than retail.

The electricity you use inside your own house is unaffected. That still offsets the full retail rate you would otherwise pay.

Which leads to the single most important sentence in this entire article:

Under today's rules, California solar is worth the most when you use it yourself rather than send it to the grid.

Self-Consumption Versus Export

Suppose your panels produce 1 kWh at one o'clock on a Tuesday afternoon.

Scenario A

  • Your air conditioning, pool pump, EV charger or appliances draw that electricity right away
  • You avoid buying that kWh at the full retail rate

Scenario B

  • Nobody is home and the house doesn't need it
  • The kWh goes to the grid and earns the applicable export credit, which is well below retail

Same panel. Same sunshine. Same kilowatt-hour.

Very different value to the household.

That gap is why a California solar design should account for when your home uses electricity. How much it uses over a year is only part of the picture.

Which Utility Do You Have?

This matters more in California than most homeowners expect, because the Net Billing Tariff does not apply everywhere in the state.

It applies to the three large investor-owned utilities:

Municipal utilities operate their own programs. Sacramento's SMUD and the Los Angeles Department of Water and Power set their own rules for customers with rooftop generation. Those rules are not the same as the investor-owned utilities' rules.

So a homeowner in Sacramento and a homeowner in Fresno can face genuinely different solar math.

Before you compare any two proposals, know which utility serves the address.

Time-of-Use Pricing Is Part of the Picture

Most California residential customers with solar are on a time-of-use rate.

That means electricity costs different amounts at different hours. The expensive window generally lands in the late afternoon and evening — commonly around 4 p.m. to 9 p.m.

Notice the problem.

Solar production peaks around midday. Household demand tends to peak after people get home, when the sun is dropping and the rate is climbing.

The system generates the most when power is cheap, and the household needs the most when power is expensive.

Closing that gap is the central design challenge for California solar right now.

Which Is Why Batteries Come Up So Often Here

A battery stores daytime production and releases it in the evening.

Under today's rules, that converts low-value exported electricity into high-value electricity you don't have to buy during peak hours.

That's a real benefit, and it's why storage is discussed far more in California than in states with more generous export credits.

But a battery is a significant expense, and it should earn its place in the proposal.

The honest comparison looks at:

A battery should solve a problem you actually have.

Outages Are a Separate Reason Californians Consider Storage

California utilities can shut off power on purpose during dangerous fire weather. These are called Public Safety Power Shutoffs.

The CPUC (California Public Utilities Commission) describes them as a measure of last resort. Utilities use them when they believe strong winds create a significant risk of power lines sparking a wildfire. Six investor-owned utilities in the state have the authority to call one.

If you live in an area where these happen, backup power may be worth something to you regardless of the bill math.

That's a legitimate reason to want storage. It just deserves to be evaluated on its own terms rather than folded into a savings number.

Solar Panels By Themselves Usually Aren't Backup Power

This surprises people every time.

A standard grid-connected solar system is designed to shut down when the utility loses power.

That's a safety requirement, meant to protect crews working on the lines.

Keeping your lights on during an outage takes equipment specifically designed for it, and that usually means battery storage.

If outage protection is part of why you're considering solar, ask directly:

What Happened to the Federal 30% Tax Credit?

It ended.

The federal Residential Clean Energy Credit no longer applies to new residential clean-energy property placed in service after December 31, 2025. The IRS has stated the 30% credit covered qualifying systems installed from 2022 through the end of 2025.

So a 2026 California proposal should not be showing you a 30% federal credit.

If one does, that's worth a direct question before you go any further.

Are There Still California Incentives?

There is a state program worth knowing about, though for most homeowners it is no longer an option.

The Self-Generation Incentive Program, or SGIP, has provided incentives for battery storage in California. Its general residential storage budget and its other ratepayer-funded residential budgets closed to new applications at the end of 2025.

What remains is a state-funded Residential Solar and Storage Equity budget aimed at income-qualified households. Demand has been heavy, and in several utility territories new applicants are being placed on a waitlist until funding frees up.

Availability and eligibility requirements change over time, and each utility territory has its own program administrator.

The practical takeaway: most 2026 California battery proposals should not count on an SGIP rebate. If your household may be income-qualified, it's worth asking whether you could join the waitlist rather than guessing.

Where Efficiency Fits In California

This is the part that often gets skipped, and in a state with rates this high it's arguably the most valuable step.

Every kilowatt-hour your home doesn't need is a kilowatt-hour you don't have to generate, store or buy.

In California that can mean:

Solar generates electricity to serve that load. It doesn't shrink the load.

Should Efficiency Come First?

Sometimes, and the arithmetic is straightforward.

Imagine a home using 14,000 kWh per year. A solar company sizes a system around that number.

Now suppose an HVAC replacement and some envelope work bring the house down to 10,500 kWh.

The system needed after that work is meaningfully smaller. Which tends to mean:

Under the current export rules, that last point carries more weight in California than it used to. Building a system to produce electricity you'll mostly export is a worse deal now than it was before 2023.

And Sometimes Solar Should Come First

Picture a different California home.

It has:

There isn't much waste left to remove in a house like that.

At that point the question becomes a straight financial one: can you produce part of what you're currently buying at roughly 34¢ or more per kilowatt-hour, for less than you're paying now?

So, Is Solar Worth It in California?

For a lot of homeowners, yes — but for different reasons than five years ago.

California offers:

What California no longer offers is a system where you can ignore the details and still come out ahead.

Export credits are lower. The federal credit is gone. Design matters more than it used to.

Which means the proposal in front of you deserves more scrutiny, not less.

Start With the Home

Ashborn Partners helps California homeowners explore solar, battery storage, heating and cooling, and whole-home energy options through one personalized home-energy review.

We don't start from the assumption that every homeowner needs panels.

We start with your utility, your rate plan, your actual usage, and the problem you're trying to solve.

Your home. Your energy. Your options.