California solar tax credit and incentives in 2026: what is left

Is there a California solar tax credit in 2026?

No state credit, and the federal one has ended for new systems. California’s Franchise Tax Board lists 13 personal income tax credits on its credits page, and none is for solar (FTB, checked September 23, 2026). The credit most people mean by “the California solar tax credit” is the federal Residential Clean Energy Credit under 26 U.S.C. § 25D.

• 2022 through 2025: the IRS says the credit “equals 30% of the costs of new, qualified clean energy property for your home installed anytime from 2022 through December 31, 2025.” That is the answer for the 2022 and 2023 credit questions too.
• 2026 and later: “The credit is not available for any property placed in service after December 31, 2025” (IRS). Public Law 119-21, enacted July 4, 2025, set that end date. The IRS adds that “if installation is completed after December 31, 2025, the expenditure will be treated as made after December 31, 2025,” so a 2025 contract or deposit does not qualify a 2026 installation (IRS FAQ, both checked September 23, 2026).

How the credit was claimed, for a system installed by 2025

“File Form 5695, Residential Energy Credits with your tax return to claim the credit.” You claim it “for the tax year when the property is installed, not merely purchased,” and “you can carry forward any excess unused credit” to later years (IRS). The IRS also says you could claim it for your main home “whether you own or rent it,” but not as a landlord who does not live there. For the records to keep, see completion dates and prior-year records; for a quote that still subtracts a credit, see how to compare it without one.

California solar incentives in 2026, in one table

Sources, all checked September 23, 2026: IRS, SGIP program tracker, CPUC disadvantaged-communities programs, CPUC CARE and FERA, BOE, SMUD and SDG&E. A program name on a flyer is not a reservation; check the administrator’s current status for your address.

What each utility runs itself is different enough to need its own page: PG&E’s solar programs (two of its community solar options are full or on hold), SMUD’s export rate, SolarShares and battery incentive, and LADWP’s solar programs in Los Angeles. A business asking about incentives should start with commercial solar financing in California, because the federal business credit follows different rules from the homeowner credit.

Start with the incentive's owner and purpose

A federal credit belongs in the eligible taxpayer's calculation. A project rebate needs an approved budget and reservation. A household bill discount reduces utility charges. None should appear as an automatic reduction on every California solar quote.

For a new homeowner purchase, read what to do when a 2026 quote still subtracts a credit before accepting an incentive line. State program availability does not extend the federal expenditure deadline.

Finished by the end of 2025? Keep the completion record

The federal credit follows the installation date, not the payment date. Section 25D treats an expenditure as made “when the original installation of the item is completed.” For a home being built or rebuilt, it counts when you begin using the home. A deposit or a 2025 contract does not move a 2026 completion into 2025 (26 U.S.C. § 25D(e)(8) and (h), checked September 24, 2026).

• Keep the signed contract, invoices and payment dates together.
• Ask the installer for records showing when installation was completed, including any work that was still outstanding.
• For new construction, keep the date you began using the home.
• Keep prior returns and Form 5695 worksheets. Section 25D(c) carries a credit your tax could not absorb into the next tax year.
• Let your tax preparer decide the correct year. A project finished in an earlier year does not belong on a later return by default.

If a 2026 quote still subtracts a tax credit

Ask who claims it and where it shows in the signed price. A lease or PPA provider may hold a business credit under 26 U.S.C. § 48E on equipment it owns. That credit is the provider's. It gives you no credit and does not set your price.

Then rebuild the comparison without it. Ask for the cash price before any incentive. Put battery, roof and electrical work on separate lines. For financing, add every payment and the utility bill that remains. If an offer only works after subtracting a credit you cannot claim, it does not work.

The bill and quote calculator does the price-per-watt and bill arithmetic with the quote's own numbers. It does not decide tax eligibility.

Separate the available paths

The older SASH program is closed. A page mentioning SASH is not evidence that new applications are open. Check DAC-SASH as its own program.

Who should check DAC-SASH?

The official handbook identifies several checks: PG&E, SCE or SDG&E service; a single-family primary residence owned and occupied by the applicant; household income meeting CARE or FERA income requirements; and a qualifying disadvantaged-community or California Indian Country location.

The administrator also reviews the site and available funding. The handbook allows for funding gaps and possible applicant contributions. Ask for the approved project scope and any amount you would pay before treating an installation as fully funded. GRID Alternatives DAC-SASH handbook, sixth edition, sections 4.2.1–4.2.3; reviewed September 10, 2026.

Check the address before the estimate

Identify the electric utility, any community choice provider and the actual program administrator. A city name or ZIP code is a starting point, not an approval. Ask whether the budget covers your customer category and whether the project has a reservation.

The SGIP tracker separates categories that can be open, closed or waitlisted. Read the row and administrator together. A remaining dollar balance alone does not establish availability.

Every California incentive guide on this site