Incentives
Solar incentives, tax credits & rebates in California (updated September 2026)
What is real, what ended and what still lowers the cost of solar, batteries and backup power for SCE customers in the Antelope Valley. Every figure below is sourced and dated.
- 01Federal 25D credit: ended for homeowners
- 0248E: still available for leases, PPAs & commercial
- 03SGIP battery rebates for qualifying households
- 04Property-tax exclusion through Jan 1, 2027
What changed in 2026
The 30% federal credit is gone for homeowners who buy solar
Last reviewed
The Section 25D Residential Clean Energy Credit does not apply to expenditures made after December 31, 2025, under Public Law 119-21 (signed July 4, 2025). The IRS treats an expenditure as made when the original installation is completed, so any system finished in 2026 gets no federal credit, regardless of when it was signed or paid for. This applies to solar and to battery-only additions.
The Section 48E business credit remains for commercial systems and for third-party-owned residential systems (leases and PPAs), where the provider claims it. Projects that began construction by July 4, 2026 (that window has closed) or that are placed in service by December 31, 2027 still qualify. For anything signed now, the only path is being placed in service by December 31, 2027.
Federal
Federal tax credits: 25D ended, 48E continues with a deadline
Section 25D, residential (ended)
Through 2025 homeowners could claim 30% of the cost of solar, batteries and related equipment against their federal income tax. That credit is terminated for expenditures made after December 31, 2025. Homeowners who completed installation in 2025 can still claim it on their 2025 return and carry forward any unused amount. Homeowners installing in 2026 cannot. We will not tell you otherwise, and you should be wary of anyone who does.
Section 48E, business (continues through 2027)
The clean electricity investment credit for business-owned systems survived with a deadline. For solar, a project that began construction by July 4, 2026 (a window that has now closed) or that is placed in service by December 31, 2027 qualifies, with IRS Notice 2025-42 setting the begin-construction rules. Anything signed today must be running by the end of 2027. This is why:
- Commercial solar for businesses, agriculture and multi-unit properties still carries a federal credit in 2026 and 2027.
- Residential leases and PPAs can still involve a federal credit. The provider owns the system and claims 48E; a fair contract passes part of it through as a lower monthly payment. You do not receive the credit yourself. How to compare that against a loan is on the solar financing options in Palmdale. See our home solar installation page for how we design a system that pays off without the credit.
The CPUC’s consumer protection guide warns that homeowners cannot capture business credits by forming an LLC for their own residence. Anyone suggesting that is proposing something improper.
California
SGIP battery rebates
The Self-Generation Incentive Program pays a rebate per kilowatt-hour of installed battery capacity, administered for SCE customers by SCE. The rates and status as of our last review:
| Budget | Rate | Who it is for | Status in SCE territory |
|---|---|---|---|
| Small residential (general market) | $150/kWh | Any residential customer | Closed (Step 7) at last review |
| Equity | $850/kWh | Income-qualified households and disadvantaged communities | Check current step |
| Equity Resiliency | $1,000/kWh | Equity-eligible customers in Tier 2/3 high fire-threat districts, with repeated PSPS events, medical baseline or critical well pumps | Closed (Step 5) at last review |
| Residential Solar and Storage Equity | $1,100/kWh | Income-qualified households (state-funded budget) | Waitlist |
- Small residential (general market)$150/kWhAny residential customerSCE status: Closed (Step 7) at last review
- Equity$850/kWhIncome-qualified households and disadvantaged communitiesSCE status: Check current step
- Equity Resiliency$1,000/kWhEquity-eligible customers in Tier 2/3 high fire-threat districts, with repeated PSPS events, medical baseline or critical well pumpsSCE status: Closed (Step 5) at last review
- Residential Solar and Storage Equity$1,100/kWhIncome-qualified households (state-funded budget)SCE status: Waitlist
Budgets open and close as funds are allocated, so treat the status column as a snapshot. If your home is in a high fire-threat district in the foothills around Leona Valley, Acton, Lake Hughes or Juniper Hills, or has experienced multiple Public Safety Power Shutoffs, ask us to check the equity resiliency criteria; more Antelope Valley homes qualify than people expect. Our battery storage page covers the systems we install.
SCE
NEM 3.0 (Net Billing) and SCE rates
Since April 15, 2023, new solar customers of SCE, PG&E and SDG&E are on the Net Billing Tariff, which SCE calls the Solar Billing Plan. It is not a rebate; it is the rulebook that decides what your solar is worth.
- Exports are credited at avoided-cost prices set by the CPUC’s Avoided Cost Calculator, varying by hour and month. SCE’s illustration: about $0.05–0.06/kWh for midday exports and $0.21–0.23/kWh during summer evenings (4–9 p.m.).
- Energy you use yourself still offsets the full retail rate, which is why batteries and daytime self-consumption matter more than system size.
- Export prices are locked for nine years from enrollment; SCE also notes an additional credit of about $0.04/kWh for eligible residential customers who enroll before 2028.
- Rate plan and true-up: customers are placed on TOU-D-PRIME and receive an annual settlement bill.
On rates: SCE’s average residential rate was 35.3 cents/kWh at the end of 2025, moved to 34.5 cents on January 1, 2026 (a 2.9% decrease driven by lower generation costs) and to 34.4 cents on June 1, 2026. That follows the CPUC-approved 2025 General Rate Case, which raised typical residential bills 9.1% in 2025 and authorized further base-revenue increases of $544 million in 2026, $522 million in 2027 and $447 million in 2028. In short, 2026 brought a small dip after a large step up, with more increases approved. Our NEM 3.0 guide shows how this changes system design.
California
Property-tax exclusion for solar (through January 1, 2027)
California’s active solar energy system new construction exclusion (Revenue and Taxation Code section 73) means installing solar does not increase your assessed value, and therefore your property tax. Batteries installed with solar are generally included. The exclusion sunsets January 1, 2027.
SB 710, signed by the Governor in October 2025, did not extend the sunset. What it does is guarantee that systems qualifying for the exclusion before January 1, 2027 continue to be excluded after that date until the property changes ownership. A system completed and qualifying before the deadline is protected for as long as you own the home. Systems completed afterward may be assessed as new construction unless the Legislature acts again. If this matters to you, plan for the full permit-and-install timeline described in our timeline guide.
City of Los Angeles
A note for LADWP customers
The Los Angeles Department of Water and Power is a municipal utility and is not governed by the CPUC’s Net Billing decision. LADWP runs its own net energy metering program, which as of 2026 still credits exports at or near the retail rate. If you live in the City of Los Angeles rather than an SCE area, the solar math is more favorable and a battery is less essential for savings, though still valuable for outages. See our Los Angeles service area page.
Backup power
Generac generators: financing, not incentives
There are no federal or California incentives for standby generators, and SGIP does not cover them. What SunCoast offers as a Generac Certified Dealer and Installer is financing with fixed monthly payments and $0-down programs, plus military and veteran discounts. For homes on PSPS-prone circuits, a generator paired with a battery is often the right design; our battery vs. generator guide compares them and the generator page covers the equipment.
Questions
Incentive questions, answered
Short, sourced answers. When rules change, this page changes with them.
01Is there any federal tax credit for home solar in 2026?
Not for a system you buy. The Section 25D residential credit does not apply to expenditures made after December 31, 2025, and the IRS treats an expenditure as made when installation is completed. A lease or PPA provider may still claim the Section 48E business credit on a third-party-owned system placed in service by the end of 2027, and may pass part of it through as a lower rate.
02I finished my install in 2025. Can I still claim it?
Yes, on your 2025 return, and unused credit can be carried forward under the existing rules. Talk to a tax professional about how to file.
03How much is the SGIP battery rebate?
The CPUC lists the Equity rate at $850 per kWh and the Equity Resiliency rate at $1,000 per kWh for eligible households. The general-market residential step in SCE territory is $150 per kWh but showed as closed at our last review, and the income-qualified Residential Solar and Storage Equity budget ($1,100 per kWh) was on a waitlist. Budgets change; we check before every battery project.
04What is NEM 3.0 and does it apply to me?
NEM 3.0 is the Net Billing Tariff, called the Solar Billing Plan by SCE. It applies to SCE, PG&E and SDG&E customers whose interconnection applications were submitted on or after April 15, 2023. Exports are credited at avoided-cost prices that vary by hour and month, which is why batteries and self-consumption matter. LADWP customers in the City of Los Angeles are not on NEM 3.0.
05Will solar raise my property taxes?
Not if the system qualifies for California's active solar energy system new construction exclusion, which sunsets January 1, 2027. SB 710 (signed October 2025) ensures systems that qualify before that date keep the exclusion until the property changes ownership.
06Are there incentives for a Generac generator?
No. There are no federal or California incentives for standby generators, and SGIP does not cover them. Financing with fixed monthly payments is available.
07Are there incentives for EV chargers or heat pumps?
The federal 25C credit for efficiency improvements, including heat pumps, and the 30C credit for home EV charging equipment were also terminated by the same 2025 law for property placed in service after specified dates in 2025 and mid-2026. Some utility rebates come and go; ask us what is open when you are ready.
Sources
Where these facts come from
Reviewed September 11, 2026. Tell us if a link is out of date and we will fix it.
- IRS: FAQs on Sections 25C, 25D, 25E, 30C, 30D, 45L, 45W and 179D under Public Law 119-21 (One Big Beautiful Bill)
- Congressional Research Service: Expiration and carryforward rules for the Residential Clean Energy Credit
- IRS Notice 2025-42: Beginning of construction for Sections 45Y and 48E
- The Tax Adviser: Navigating safe-harbor rules for solar and wind Sec. 48E facilities (Feb 2026)
- CPUC: Participating in the Self-Generation Incentive Program (Equity and Equity Resiliency rates)
- SGIP program metrics: budget and step status by utility
- SCE: How Solar Billing Plans work
- Aurora Solar: Explaining and modeling California's Net Billing Tariff (April 15, 2023 effective date)
- SCE: Rate advisory, January 1, 2026
- SCE: Rate advisory (June 1, 2026 change)
- CPUC: Decision fact sheet, SCE 2025 General Rate Case (Sept 2025)
- California Legislature: SB 710 (2025), active solar energy system exclusion
- Senator Blakespear: SB 710 signed by the Governor (October 2025)
- California State Board of Equalization: Letter to Assessors 2024/031, active solar energy system exclusion
- EnergySage: LADWP net metering (2026)
- CPUC: California Solar Consumer Protection Guide (October 2025)
This page is general information from a licensed contractor, not tax or legal advice. Confirm your situation with a tax professional. SunCoast Solar, CSLB #1028836 (B) and C-10 #1105123.
Keep reading
Guides on incentives and utility rules
Longer reads on what ended, what still lowers the price, and how SCE Net Billing changes the design.
Want to know which of these applies to your home?
Send us your address and a recent SCE bill. We will check SGIP eligibility, the property-tax deadline and Net Billing design for your roof, and give you a written answer.