Helping Riverside County homeowners navigate SCE rates and solar options since 2020
Quick answer
- -Federal Section 25D ITC: Terminated for new residential installations after December 31, 2025; consult a licensed tax professional for current federal incentive options on 2026 installs
- -California property tax exclusion: Solar does not increase your assessed home value
- -SGIP (battery rebate): General residential budget is reserved and waitlisted as of early 2026; equity categories still accepting waitlist applications
- -DAC-SASH: Up to $3 per watt for low-income homeowners in disadvantaged communities; apply through Grid Alternatives
- -No California state solar tax credit currently exists; do not confuse property tax exclusion with a direct rebate
1. California Solar Incentives at a Glance
| Incentive | Amount | Status 2026 | Who qualifies |
|---|---|---|---|
| Federal ITC (Section 25D) | N/A for 2026 | Ended 12/31/2025 | Pre-2026 installs only; consult tax professional |
| CA Property Tax Exclusion | Full exclusion from reassessment | Active | Any CA homeowner who installs solar |
| SGIP General Residential | Varies by kWh | Reserved/Waitlisted | Battery storage owners; waitlist only |
| SGIP Equity Categories | Up to $850/kWh | Waitlisted | Low-income, medical baseline, fire-tier 2+ |
| DAC-SASH | Up to $3/watt | Active (limited) | Low-income homeowners in disadvantaged communities |
| CA State Tax Credit | None | Does not exist | N/A |
2. Federal Solar Tax Credit (Section 25D) - Status Update
Section 25D residential solar credit ended December 31, 2025
The Residential Clean Energy Credit (Section 25D), which provided a 30% federal tax credit for residential solar installations, was terminated for new installations after December 31, 2025 under federal legislation signed in 2025. If your system was installed and operational on or before December 31, 2025, you remain eligible to claim the credit on your taxes for that year.
The Section 25D credit was a significant incentive for residential solar buyers for over a decade. It provided a dollar-for-dollar reduction of federal income tax liability equal to 30% of the total installed system cost, including panels, labor, inverter, mounting hardware, and battery storage when installed with solar.
For homeowners who installed solar before the December 31, 2025 cutoff: the credit is claimed on IRS Form 5695 for the tax year in which your system was placed in service. Unused credit carries forward to future tax years. Consult a CPA or tax professional for the exact mechanics of claiming or carrying forward your credit.
For 2026 installations
If you are planning to install solar in 2026, consult a licensed tax professional and a licensed solar installer about what federal incentive options, if any, currently apply to your situation. Federal tax law can change, and a qualified professional working with your specific tax circumstances is the right source for current guidance. The California incentives described below are unaffected by federal legislation changes.
3. California Property Tax Exclusion
California Revenue and Taxation Code Section 73 excludes active solar energy systems from property tax reassessment. When you install solar, your home's assessed value for property tax purposes does not increase due to the panels.
This matters because solar typically adds $15,000 to $25,000 to a home's appraised market value according to the Lawrence Berkeley National Laboratory. Without the exclusion, a $20,000 increase in assessed value would add roughly $200 to $300 per year in property taxes in Riverside County at current rates. The exclusion eliminates that cost entirely.
The exclusion applies to new solar installations and has been extended multiple times by the California legislature. It applies automatically when you pull permits; you do not need to apply separately.
4. SGIP Battery Rebate Program
The Self-Generation Incentive Program (SGIP) is California's primary rebate for home battery storage, administered through utilities including SCE. The rebate is paid per kilowatt-hour of installed battery capacity.
2026 Status: General Residential Budget is Reserved
As of early 2026, SGIP's general residential budget for SCE territory is fully subscribed and waitlisted. Customers who apply are placed on a waitlist. New funding requires CPUC approval and is not guaranteed on a specific timeline.
Equity categories still accepting waitlist applications
SGIP has higher-rebate equity and equity resilience categories for customers who:
- Are enrolled in CARE or FERA low-income rate programs
- Receive medical baseline allowance
- Are in a high fire risk area (Tier 2 or Tier 3 under CPUC fire risk maps)
- Are in an SB 535 disadvantaged community
The equity resilience rebate was as high as $850 per kWh when funded. A 10 kWh battery at that rate is an $8,500 rebate. If you qualify for any of these categories, it is worth joining the waitlist through SCE's SGIP portal even without a firm timeline.
5. DAC-SASH: Low-Income Solar Program
DAC-SASH stands for Disadvantaged Communities - Single-family Affordable Solar Homes. It is a California program that provides grants of up to $3 per watt to qualifying low-income homeowners in disadvantaged communities.
DAC-SASH eligibility checklist
- You own your home (not a renter)
- You are an existing SCE, PG&E, or SDG&E customer
- You are enrolled in CARE or FERA (or are income-eligible)
- Your property is in a census tract designated as a disadvantaged community (SB 535 or AB 1550 criteria)
- You do not already have solar installed
DAC-SASH is administered by Grid Alternatives, a nonprofit solar installer. Qualifying customers receive the solar system at significantly reduced or no out-of-pocket cost. At $3 per watt, a 6 kW system would receive up to $18,000 in grant funding before any other incentives.
To check whether your address falls within a qualifying disadvantaged community census tract, use the CalEnviroScreen tool at oehha.ca.gov. If your address qualifies, contact Grid Alternatives directly for a pre-qualification.
6. How NEM 3.0 Affects the Incentive Math
California's Net Energy Metering 3.0 tariff changed how SCE credits excess solar electricity sent to the grid. Under NEM 3.0, export credits are lower than the retail rate you pay for electricity. This changes how quickly a solar system pays back its cost but does not change the dollar amounts of any incentive listed above.
What NEM 3.0 does change: the value of battery storage. Rather than exporting excess daytime solar at a reduced credit, a battery lets you store that electricity and use it during the 4-9pm peak period when SCE rates are highest. This improves the economics of battery storage significantly compared to a pre-NEM 3.0 solar-only system.
If you are evaluating solar under NEM 3.0, getting a full bill analysis that accounts for your current TOU rate, usage pattern, and estimated battery savings is more important than it was under NEM 2.0. A correctly sized solar-plus-storage system can still substantially reduce a high SCE bill.
7. Stacking California Incentives on the Same System
Multiple California incentives can apply to the same solar installation. For 2026 installations, the available state and local programs stack as follows:
- DAC-SASH grant is applied first. If you qualify, this reduces your out-of-pocket cost directly. A $18,000 DAC-SASH grant on a $25,000 system means you pay approximately $7,000 before any other incentive.
- SGIP battery rebate (if funded) reduces battery cost. SGIP is currently waitlisted, but if approved, the rebate applies to the battery portion of your installation.
- California property tax exclusion applies automatically to the full system value regardless of any grants or rebates received. You do not pay additional property tax no matter how much the system was subsidized.
For any federal tax incentive questions related to a 2026 installation, speak with a licensed CPA or tax professional. Federal tax law governing residential solar changed at the end of 2025, and the interaction between state grants and any available federal provisions requires professional guidance specific to your situation.
Get Your Personalized Incentive Estimate
Every home is different. A 15-minute call covers your current SCE bill, which California programs apply to your address, and what realistic savings look like under NEM 3.0.
(951) 290-30148. Frequently Asked Questions
What is the federal solar tax credit status in 2026?
The Section 25D residential solar tax credit ended for new installations after December 31, 2025. Homeowners who installed solar on or before that date can still claim the credit on their taxes. For systems installed in 2026, consult a licensed tax professional about current federal incentive options. California's state programs are unaffected.
Does California have a solar property tax exemption?
Yes. Revenue and Taxation Code Section 73 excludes solar installations from property tax reassessment. Adding solar does not increase your assessed property value. This applies automatically when your installation is permitted and does not require a separate application.
Is SGIP still available in 2026?
General residential SGIP is fully reserved and waitlisted as of early 2026. The equity categories (for low-income customers, medical baseline, high fire risk) are still accepting waitlist applications at higher rebate rates. Approval depends on new CPUC funding being allocated.
What is DAC-SASH and who qualifies?
DAC-SASH provides up to $3 per watt for low-income homeowners in disadvantaged communities who own their home, receive CARE or FERA, and are in an IOU service territory. A 6 kW system could receive up to $18,000. Apply through Grid Alternatives.
Can you combine California solar incentives?
Yes. California's property tax exclusion, SGIP, and DAC-SASH can all apply to the same installation. DAC-SASH and SGIP reduce your out-of-pocket cost; the property tax exclusion applies to the full system value regardless of grants received. For federal tax incentive questions on 2026 installations, consult a licensed tax professional.
Does NEM 3.0 affect the value of solar incentives?
NEM 3.0 does not change the dollar amount of any incentive. It changes how much export credit you receive for electricity sent back to the grid, which affects payback period. Battery storage paired with solar is more valuable under NEM 3.0 than under previous tariffs. Getting a full bill analysis specific to your usage pattern is important before installing.