Pros and cons of solar panels in California in 2026

The advantages

1. You buy less electricity

This is the core of it. Power your panels make while the house is using it never crosses the meter, so you do not pay the utility for it. Under current rules that home use is where most of the value sits, which is why a system sized to your own daytime and early-evening demand tends to make more sense than one sized to export. The guide to sizing a system for your home shows how to work from your bill.

2. Backup power, with a battery

Panels alone usually shut down when the grid goes down. Paired with a battery and the right equipment, they can keep chosen circuits running and recharge the battery the next day. Californians add storage more than most: LBNL reports that California and Hawaii again had the highest residential battery attachment rates in 2025 (LBNL, checked September 23, 2026). The outage guide explains what a backup design has to include.

3. No property tax increase, for now

The Board of Equalization says installing a qualifying active solar energy system “will not result in either an increase or a decrease in the assessment of the existing property.” It is a new construction exclusion rather than an exemption, and the statute is scheduled to sunset on January 1, 2027 (BOE, checked September 23, 2026). If your install will finish near that date, confirm the rule that applies.

4. Prices came down in 2025

LBNL’s August 2026 update reports that installed prices for host-owned residential systems fell by $0.50 per watt in 2025 after inflation (LBNL, checked September 23, 2026). That offsets part of what the lost tax credit took away, though not all of it.

5. Help for income-qualified homeowners

The CPUC lists DAC-SASH, which provides no-cost rooftop solar to income-qualified homeowners in disadvantaged communities, and SGIP incentives for low-income customers who pair solar with storage (CPUC, checked September 23, 2026). If you might qualify, check these before you request a market-rate quote. See low-income solar programs in California.

6. A system you own stays with the house

A purchased system is part of the home. How much it adds to a sale price is a separate, unsettled question, covered in whether solar increases home value in California.

The drawbacks

1. Exports are worth less than imports

For PG&E, SCE and SDG&E customers who applied to connect on or after April 15, 2023, the CPUC’s Net Billing Tariff credits exported power at values from its Avoided Cost Calculator, “usually lower than the retail rate” (CPUC, checked September 24, 2026). A system that sends most of its output to the grid earns much less than it would have under the older NEM 2.0 rules. The mechanics are in NEM 2.0 versus NEM 3.0.

2. The federal tax credit is gone

The IRS says the residential clean energy credit is not allowed for expenditures made after December 31, 2025, and an expenditure counts as made when the installation is completed (IRS, checked September 23, 2026). A system finished in 2026 carries its full price. See what the Inflation Reduction Act credit was and why it ended.

3. The upfront cost is large

LBNL’s most recent stated range puts host-owned residential systems installed in 2023 between $3.20 and $5.50 per watt, with California near the middle of the national pack (LBNL Tracking the Sun, 2024 Edition). At the ends of that band, a 6-kilowatt system works out to roughly $19,200 to $33,000 before financing. The statewide cost guide breaks down what goes into a quote.

4. Batteries add real money

Storage is what makes solar work best under net billing, and it is not cheap. Among cash-purchase residential systems, LBNL found median prices $2.10 per watt higher for solar paired with storage than for solar alone, in data where about 80% of systems were in California (LBNL, 2026 update). Whether that pays back is covered in the battery payback analysis.

5. The roof has to be ready

Panels last longer than many roofs. If yours will need replacing in the next several years, doing it first avoids paying to remove and reinstall the array later. The roof suitability check and the removal and reinstall checklist cover both sides.

6. Leases and PPAs are long commitments

A lease or PPA can start with nothing down, but you pay every month for the contract term, often with a yearly increase, and the contract follows the house if you sell. The CPUC guide’s blunt reminder applies here: “Solar energy is rarely free” (CPUC, checked September 23, 2026). Compare ownership and leasing on the same system with the cash, loan, lease and PPA comparison.

7. You still get a bill, and companies can fail

Solar customers still pay the utility for grid power they use and for fixed charges; see why you still get a utility bill with solar. And a warranty is only as good as the company behind it. Read what survives when an installer goes bankrupt before you weigh a long warranty.

Who solar tends to suit, and who should wait

Solar is more likely to work out if most of these are true:

• You own the home and expect to stay long enough to recover the cost.
• The roof is in good shape, faces a useful direction and gets little shade.
• You use a fair amount of power during the day or early evening, or plan to add an EV or heat pump.
• You can buy with cash or a loan whose total cost you have compared with a lease or PPA.

It is worth pausing if:

• The roof needs replacing soon, or trees and neighboring buildings shade it most of the day.
• You expect to move within a few years, especially with a lease or PPA that must transfer.
• A quote assumes your bill disappears, or subtracts a federal tax credit on a 2026 install.
• The only offer came from a door-to-door pitch with a deadline.

If you decide to go ahead, the CPUC recommends getting bids from at least three qualified providers and comparing them. The guide to choosing and verifying a solar company shows how, and the worth-it stress test helps you test a proposal against less favorable assumptions.