California has the most installed residential solar capacity in the U.S. — and despite NEM 3.0 changes, remains one of the best markets for solar thanks to high electricity rates and substantial incentive stacking.
Federal Credit (Available in All States)
30% of total system cost under IRC 25D, no cap. On a California average system of $32,000, that's $9,600 back. Carries forward if your tax liability is insufficient.
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 each offer various demand response and solar incentive programs that complement federal and state credits. These include solar export incentive rates under NEM 3.0, battery incentives through SGIP, and demand response programs that pay you to reduce usage during peak periods.
Is Solar Still Worth It in California Under NEM 3.0?
Yes — especially with battery storage. With electricity rates of $0.25–$0.44/kWh depending on your utility and rate schedule, self-consumption of solar is extremely valuable. Paired with the 30% federal credit and SGIP battery rebate, California solar + storage systems typically pay back in 7–10 years with 25-year returns of $50,000+.