- Federal 25D creditEnded for expenditures after 31 Dec 2025
- California state creditNone — and never was, recently
- Property taxActive solar exclusion still applies
- SGIP storage rebatePG&E customers only
The big change: the federal residential credit has ended
For most of the last two decades the first line of any solar incentives page was the federal residential clean energy credit — 30% of the system cost, claimed on your own tax return. It is no longer available to homeowners.
The credit under Internal Revenue Code Section 25D was terminated by legislation signed in July 2025 for expenditures made after 31 December 2025. A homeowner purchasing a system in 2026 cannot claim it.
What this means when you are being sold to
If a salesperson in 2026 is still showing you a 30% federal credit on a homeowner purchase, either their information is a year out of date or the proposal is misleading. Either is a good reason to be careful. Confirm your own position with a CPA — we install solar, we do not give tax advice.
What is still available in 2026
California’s active solar energy system property tax exclusion
California generally excludes the added value of a qualifying active solar energy system from your property’s assessed value. In plain terms, installing solar does not normally push up your property tax bill the way other capital improvements can. The exclusion has been extended several times by the legislature and carries a statutory sunset date, so confirm the current position with your County Assessor — Sacramento, Placer, El Dorado, Yolo and Solano counties each administer it locally.
SGIP storage rebates — PG&E customers only
The Self-Generation Incentive Program offers rebates toward battery storage, with substantially larger amounts for customers in high fire-threat districts, on medical baseline, or meeting income criteria. Two things to understand about it:
- It is administered through California’s investor-owned utilities. In our footprint that means PG&E customers — Rocklin, El Dorado Hills, Auburn, Placerville, Cameron Park, Davis, Woodland, Vacaville and so on. SMUD, Roseville Electric and Lodi Electric customers are outside it.
- Funding is tiered and steps down as budget is claimed, so both availability and amount move. Treat any figure as something to verify at the time you apply.
For foothill addresses in El Dorado and Placer counties, the high fire-threat district tier is worth checking specifically — it is materially larger than the general tier.
Utility programmes
SMUD has at various times run its own solar, storage and electrification programmes, as have Roseville Electric and Lodi Electric. These change more often than state programmes do and are not always well advertised. Check your own utility’s website directly rather than relying on a third-party summary — including this one.
Commercial and third-party ownership
The federal tax treatment of commercial solar, and of residential systems owned by a third party under a lease or power purchase agreement, sits under different sections of the tax code from the homeowner credit that ended. Those provisions have their own rules, phase-out schedules and labour requirements. If you own a business, or are considering a leased system, this is a real conversation to have with a qualified tax adviser — not with a solar salesperson, and not with us.
Low-income and assistance programmes
Programmes exist to help income-qualified households access solar, administered through specific agencies and community organisations. They are legitimate, and they are also the cover story for a great deal of cold-call fraud. A genuine programme will never be introduced to you by an unsolicited phone call demanding a decision today.
Two things that never applied here
- There is no California state solar tax credit. There has not been one for residential solar in many years. Advertisements implying otherwise are wrong.
- “Free government solar panels” is not a programme. No federal or state scheme gives homeowners free solar. Any advertisement or call claiming otherwise is describing a lease or a power purchase agreement at best, and a scam at worst.
How to check what applies to you, properly
- DSIRE — the incentive database maintained by NC State University. Search by ZIP code. It is independent and it is kept current.
- Your utility’s own website for programmes specific to SMUD, PG&E, Roseville Electric or Lodi Electric.
- Your County Assessor for the current status of the property tax exclusion.
- A CPA for anything touching your tax return. This is genuinely worth an hour of professional time on a purchase this size.
Written by the Sacramento Solar team for Sacramento-area homeowners. We install solar; we are not tax advisers, accountants or financial advisers. Figures are ranges current as of early 2026 and are offered as orientation, not as advice about your own situation. Verify current programme rules with your utility, the relevant agency or a qualified professional.