What does solar actually cost in San Diego in 2026, now that the federal credit is gone?

Two things changed, and the second one is the one that catches people. First, the credit terminated. Section 25D was ended by Public Law 119-21, signed in July 2025. For a residential system you own, there is no 30% federal credit available in 2026.

Second, the IRS measures the deadline by completion, not by payment. This is where a lot of homeowners got hurt. The rule is that an expenditure is treated as made when the original installation of the item is completed. The IRS spelled out the consequence directly: if installation is completed after December 31, 2025, the expenditure is treated as made after that date, which prevents the taxpayer from claiming the section 25D credit (IRS FAQs on OBBB modifications).

• A contract signed in October 2025 did not preserve the credit.
• A deposit paid in December 2025 did not preserve it.
• A system still waiting on permit or interconnection when the calendar turned did not preserve it.
• Only a completed installation before January 1, 2026 qualified.

Here is the honest inventory. Every item below is dated, because every one of them can move.

Commercial solar, on a clock

Section 48E, the clean electricity investment credit, is alive for business-owned systems, but the timeline tightened sharply. Solar facilities that began construction after July 4, 2026 must be placed in service by December 31, 2027 to claim it. Energy storage is carved out of that solar and wind sunset. If you own a commercial building in Miramar, Kearny Mesa, or Poway, this is a real deadline and the engineering lead time is not short. Talk to your CPA before you talk to us.

Lease and PPA arrangements are structurally different

With a lease or a power purchase agreement, you do not own the system, so there is nothing for you to claim directly. Any benefit reaches you only as a lower price or rate, if the provider chooses to pass it through. Ask to see the escalator, the term, the buyout, and what happens if you sell the house or need a roof replacement under the array.

California's property tax exclusion, expiring soon

An active solar energy system currently does not trigger a property tax reassessment as new construction, but only for systems in progress or completed before January 1, 2027 (California BOE guidance). Systems excluded before the sunset stay excluded until the property changes ownership. This is one of the few genuine 2026 deadlines left, and it is a completion deadline, not a contract deadline.

SGIP battery rebates, mostly closed

The Self-Generation Incentive Program is administered here by the Center for Sustainable Energy. As of the program's own metrics dated August 20, 2026, the general Small Residential Storage category shows closed, at a Step 7 rate of $0.15 per watt-hour. Higher equity rates belong to income-qualified categories, and those show closed or waitlisted as well. We are not going to quote you a battery price with an SGIP rebate subtracted out of it. If a category reopens and you qualify, we will tell you and help you file.

There is no California state income tax credit for residential solar. There never was one in the sense people mean.

Under the net billing tariff, called NEM 3.0, which has applied to every new interconnection since April 15, 2023, the energy you send back to the grid is credited at values from the CPUC's Avoided Cost Calculator, which the CPUC itself describes as usually lower than import rates (CPUC, Net Energy Metering and Net Billing).

Practically: the kilowatt-hour your panels make at 11 a.m. and push to the grid is not worth the same as the kilowatt-hour you buy back at 6 p.m. It is worth considerably less. An oversized array that exports heavily in the middle of the day is no longer the efficient design it was under NEM 2.0.

Usually lower than import rates.

SDG&E's on-peak window is 4 p.m. to 9 p.m. SDG&E's own guidance to solar customers is to try to use your battery during on-peak hours from 4pm to 9pm when electricity is priced the highest (SDG&E Solar Billing Plan).

That is the whole economics of solar in San Diego in 2026, compressed into one sentence. The value is in not buying expensive evening electricity, not in selling cheap midday electricity. The CPUC reports that roughly 70% of net billing customers paired storage with their solar by the end of 2024, and that is why.

It also means a smaller, well-matched array with storage frequently beats a bigger array without it. We would rather sell you the right system twice, panels now, storage when it pencils, than an oversized one once. See our solar battery installation and Tesla Powerwall installation pages for what that looks like in practice.

This gets left out of a lot of proposals, so here it is plainly. SDG&E's Base Services Charge applies to residential customers including solar customers, because the house is still connected to the grid. It runs roughly $24 per month for general residential customers, about $12 for FERA/DRAH, and about $6 for CARE, effective October 2025. Solar export credits do not net against it.

There are also non-bypassable charges for public purpose programs that export credits cannot offset. So "solar eliminates your electric bill" is not a thing that happens. "Solar substantially reduces the usage-based portion of your bill, and a battery attacks the most expensive hours" is a thing that happens.

• We will not give you a savings number before we have seen a full year of your bills.
• We will not tell you that you need a new roof when you don't - check with a roof inspection first.
• We will not quote a federal residential tax credit, because there isn't one for homeowner-owned systems completed in 2026.

This is not a trick and it is not aimed at any particular competitor. Most solar salespeople in San Diego are working from slide decks that were accurate in 2024 and were never updated. Here is how to check any of it yourself, in about fifteen minutes.

1. 1Ask for the incentive by name and citation - not "the tax credit," but the section number, the program name, or the tariff schedule.
2. 2Look up whether it applies to owned systems, leased systems, or both.
3. 3Check the completion deadline, not the contract deadline.
4. 4Confirm your utility territory - SDG&E, or a Community Choice program like San Diego Community Power - since generation charges differ.
5. 5Ask what your system's export credits are actually worth under the current tariff, not the old one.

If you want a straight answer on your own roof and your own bills, contact us and send twelve months of statements. We'll model it before we quote it. If your roof needs work first, look at solar panel removal and reinstallation and solar installation, and check your provider on the utility companies page.