California has the most installed residential solar capacity in the U.S. — and despite NEM 3.0 changes, remains one of the better markets for solar thanks to high electricity rates, even without the federal credit.
Federal Credit (Ended)
The 30% residential solar credit (25D) ended for systems installed after December 31, 2025. Solar leases and PPAs may still reflect a commercial credit claimed by the installer, for a limited time.
SGIP: California Battery Storage Incentive
The Self-Generation Incentive Program (SGIP) provides rebates for home battery storage systems. In equity-designated areas, rebates can cover 100% of battery installation costs. In standard areas, SGIP provides $0.15–$0.25/Wh — roughly $2,000–$3,375 for a 13.5 kWh Powerwall.
SGIP waitlists vary by utility territory. PG&E and SCE have had frequent waitlist openings; SDG&E's program has been more limited.
NEM 3.0: What Changed in April 2023
California's Net Energy Metering 3.0 (effective April 15, 2023 for new applicants) reduced the export credit rate from near-retail rates (~$0.30/kWh) to avoided-cost rates (~$0.05/kWh). This significantly reduced the financial value of exporting excess solar to the grid.
Impact: Homeowners who maximize self-consumption (with battery storage, EV charging, or load shifting) are less affected. Pure export economics suffered substantially.
Utility Programs
PG&E, SCE, and SDG&E offer demand response and battery programs that pay you to reduce usage or export power during peak periods. SGIP's general-market battery budget has closed, and its remaining residential budget serves income-qualified households.
Is Solar Still Worth It in California Under NEM 3.0?
It can, especially with battery storage. With electricity rates of $0.25–$0.44/kWh depending on your utility and rate schedule, using your own solar power is valuable. Without the federal credit, paybacks are longer than they were in 2025, so compare quotes carefully, including leases and PPAs, which may still reflect a commercial credit.