California has the most installed residential solar of any state — and for good reason. PG&E, SCE, and SDG&E customers pay $0.30–$0.55/kWh, among the highest rates in the US. The federal 30% Investment Tax Credit, California's permanent property tax exclusion, and the SGIP battery incentive stack into a compelling financial case. One critical update: California switched to NEM 3.0 in April 2023, which makes battery storage essential to maximize solar value. Enter your address to get matched with licensed CA installers.
California's Net Energy Metering program changed significantly in April 2023. Under the old NEM 2.0, excess solar power exported to the grid earned credits at the full retail rate (up to $0.50/kWh with PG&E). Under NEM 3.0, export rates dropped to approximately $0.02–$0.08/kWh during most hours — a reduction of 75% or more.
The implication: solar-only systems without battery storage are far less economical under NEM 3.0. The solution is to pair solar with a battery, use what you produce, store the rest, and draw from storage at night instead of exporting at low rates. Solar + battery is now the standard recommendation for new CA installations.
Existing NEM 2.0 customers are grandfathered for 20 years — if you went solar before April 2023, you keep your existing tariff.
The Inflation Reduction Act provides a 30% federal tax credit on the full cost of solar panels AND battery storage — dollar for dollar off your federal income tax. On a $35,000 solar + battery system, that's $10,500 back at tax time.
California Revenue and Taxation Code § 73 permanently excludes the added value of a solar installation from your property tax assessment. In high-value CA markets — where homes are worth $800K–$3M+ and property tax bills are significant — this is a meaningful long-term benefit. The exclusion is permanent (no time limit) and requires no separate application in most counties.
California's SGIP provides per-kWh incentives for battery storage systems. The Equity Resiliency budget provides up to $1,000/kWh for qualifying low-income customers and those in high fire risk areas (Tier 3 or Tier 4 VHFHSZ). General Market incentives are lower but still meaningful. SGIP is administered by PG&E, SCE, SDG&E, and SoCalGas on behalf of the CPUC. Your installer applies on your behalf.
California does not offer a state income tax credit for residential solar — the California Solar Initiative residential program ended years ago. The federal 30% ITC is the primary tax incentive for CA homeowners.
Under NEM 3.0 (effective April 14, 2023 for new installations), excess solar exported to the grid earns credits at the "avoided cost" rate — approximately $0.02–$0.08/kWh. Annual true-up applies. Battery storage is the solution: store excess production and use it at night or during peak rate hours rather than exporting at low rates.
PG&E serves Northern and Central California — the Bay Area, Sacramento, Central Valley, North Coast, and Sierra Nevada foothills. With tiered rates reaching $0.50+/kWh in Tier 2/3, PG&E customers have the strongest financial motivation for solar + battery in the state. PG&E interconnection: 4–12 weeks. NEM 3.0 applies to all new PG&E solar installations.
SCE serves most of Southern California outside the City of Los Angeles — Orange County, Inland Empire, Ventura County, and parts of LA County suburbs. Rates of $0.25–$0.45/kWh. NEM 3.0 applies. SCE interconnection: 4–12 weeks.
SDG&E serves San Diego County and southern Orange County. With some of the highest residential electricity rates in the US ($0.30–$0.55/kWh), SDG&E customers have exceptional solar ROI even under NEM 3.0 with battery storage.
LADWP serves the City of Los Angeles — a municipal utility with different rates ($0.20–$0.28/kWh) and a different net metering program (LADWP Net Billing) than the IOUs. LADWP customers are not under the CPUC's NEM 3.0 order — LADWP administers its own program. Solar economics are strong but distinct from PG&E/SCE/SDG&E. LADWP interconnection can take 3–6 months.
SMUD serves Sacramento city and county with some of the lowest rates among major CA utilities (~$0.13–$0.18/kWh). Solar ROI is more modest than PG&E/SDG&E territory but still viable with the 30% ITC and battery storage. SMUD is not under CPUC NEM 3.0 — it has its own net metering program.
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