Solar in California: is it worth it in 2026?
California is a good state for solar: most homes that buy a system get their money back in about a decade. Three things decide that: electricity here is among the most expensive in the country (2nd of 51), it gets more sun than most states (4th), and exported power earns much less than the retail rate. Of the 51 states and DC, California has the 15th-fastest payback for a typical home.
The average home here pays about $155 a month for 494 kWh. A 3 kW system sized for that home would knock about $773 off the first year's bills, 42% of the total.
Checked November 12, 2026
What makes solar pay off in California
- Size the system to what you use during the day, not to your whole year: extra power sent to the grid earns about 15% of the retail rate. A battery, or running the dishwasher, laundry and EV charging while the sun is up, raises the value of every panel.
- High electricity prices do the heavy lifting. At 31.4¢ per kWh, even a modest system saves real money, but the price still matters. At $3.34 per watt, the high end of what companies quote, payback for a typical system here stretches to 15 years.
- Lots of sun. Each kW of panels makes about 1,677 kWh a year here, so a smaller system covers more of your bill than in most states.
Payback by system size
An average California home uses about 5,928 kWh a year. Here's how systems sized to cover part or all of that work out, bought with cash at $2.57 per watt:
| Covers | Size | Price | Makes a year | Payback | 25-year savings |
|---|---|---|---|---|---|
| 57% | 2 kW | $5,140 | 3,354 kWh | 10 years | $8,712 |
| 71% | 2.5 kW | $6,425 | 4,193 kWh | 10 years | $11,546 |
| 99% | 3.5 kW | $8,995 | 5,870 kWh | 10 years | $17,215 |
| 127% | 4.5 kW | $11,565 | 7,547 kWh | 11 years | $18,743 |
The 2 kW system pays back fastest, but the 4.5 kW system saves the most over 25 years, though only if the extra power is used at home. Assumes exported power earns about 15% of the retail rate, prices rise 2.5% a year and one inverter replacement.
How California credits power you send to the grid
Reduced credit (net billing)
Net billing ("NEM 3.0") since April 15, 2023 for PG&E, SCE and SDG&E customers: exported power earns hourly credits averaging about 4 to 5 cents per kWh, around a tenth of what power costs to buy. A battery, or using more power during the day, matters a lot. City utilities like LADWP and SMUD set their own rules.
Already have solar? How to read your true-up bill.
By utility
- PG&E: Hourly export credits averaging about 3.9 cents per kWh, plus an “ACC Plus” adder of about 1 cent for 2026 applicants, locked for 9 years. Requires the E-ELEC rate plan.
- Southern California Edison (SCE): Hourly export credits averaging about 4.6 cents per kWh, plus an adder of about 2 cents for 2026 applicants, locked for 9 years. Requires the TOU-D-PRIME rate plan.
- SDG&E: Hourly export credits averaging about 3.7 cents per kWh, with no adder. Requires the EV-TOU-5 rate plan.
- LADWP: Retail net metering, billed monthly: power you send out is credited at the energy rate, and extra credit is banked for later bills. California's NEM 3.0 doesn't apply.
- SMUD: 9.6 cents per kWh for every kWh sent to the grid, at any hour, on the Solar and Storage Rate from June 1, 2026 (up from 7.4 cents).
Before you sign in California
Check the license. Look the company up with the Contractors State License Board (CSLB), by its legal name or license number, and ask for the electrician's license number too.
California Solar Consumer Protection Guide (AB 1070):
- Customers of PG&E, SCE, SDG&E and some smaller utilities must read, initial and sign the state's Solar Consumer Protection Guide before signing a contract, or the system can't be connected.
- You also get the state's Solar Energy System Disclosure Document, showing the total cost.
- Forms must be in the language the sales pitch was given in.
In every state, the FTC Cooling-Off Rule lets you cancel a contract signed at your home until midnight of the third business day.
How to choose a solar company · Contract checklist · Before you sign
California compared with its neighbors
| State | Electricity | kWh per kW | Typical payback | Exported power |
|---|---|---|---|---|
| California | 31.4¢ | 1,677 | 10 years | Reduced credit (net billing) |
| Oregon | 15.5¢ | 1,121 | 15 years | Full credit (net metering) |
| Nevada | 13.3¢ | 1,753 | 14 years | Reduced credit (net billing) |
| Arizona | 15.3¢ | 1,755 | 16 years | Reduced credit (net billing) |
Questions about solar in California
How long does solar take to pay for itself in California?
About 10 years for a typical 3 kW system bought with cash at the 2026 median price of $2.57 per watt, with no federal tax credit and one inverter replacement. A bigger or smaller system, a different price, or your own usage will change that; the table above shows other sizes.
Does California have net metering?
Not full net metering. Net billing ("NEM 3.0") since April 15, 2023 for PG&E, SCE and SDG&E customers: exported power earns hourly credits averaging about 4 to 5 cents per kWh, around a tenth of what power costs to buy. A battery, or using more power during the day, matters a lot. City utilities like LADWP and SMUD set their own rules.
Is there a solar tax credit in California in 2026?
Not from the federal government for buyers: the 30% homeowner credit ended for systems installed after December 31, 2025. For a typical 3 kW system in California, that credit was worth about $2,313 and brought payback down to 7 years, instead of 10 years now. Leasing companies can still claim a business credit, so ask for a lease or PPA price too. Your state energy office lists any state rebates.
Is a solar battery worth it in California?
On bill savings alone, not quite: a 13.5 kWh battery at about $15,650 would move about 2,717 kWh of solar power a year from the grid to your evenings in a typical California home, adding about $12,263 of savings over 15 years. That doesn't cover its price, so the system's payback goes from 10 years to 16 years; the rest is paying for backup during outages. Time-of-use rates, battery rebates and utility payments for sharing your battery can tip it; try your numbers in the payback calculator.
Is plug-in solar legal in California?
Yes, starting January 1, 2027, under SB 868, up to 1,200 watts per home. The exemption ends January 1, 2030 unless extended; the utility may ask for online registration.
How do I check a solar company's license in California?
Look the company up with the Contractors State License Board (CSLB) (cslb.ca.gov) by its legal name or license number, and ask for the electrician's license too.
More guides: What changed for solar in 2026 · Lease or buy? · Plug-in solar · Is my solar system working?
Sources: U.S. Energy Information Administration (EIA), final 2025 data: Annual State Historical Spreadsheets (Form EIA-861, released October 7, 2026) and Electric Power Annual (October 21, 2026); NREL PVWatts (National Solar Radiation Database), statewide averages; NRG Clean Power: NEM 3.0 export credits by utility; LADWP: net energy metering guidelines; SMUD: Solar and Storage Rate schedule, effective June 1, 2026; SMUD: Solar and Storage Rate; CPUC: California Solar Consumer Protection Guide; Solar.com: Plug-in solar, the 2026 guide; EnergySage: median quoted price, first half of 2026.