Multifamily Solar in California: VNEM, SOMAH, and Title 24

The split-incentive problem, and why it's the whole story here

A single-family homeowner who installs solar pays for the system and receives the utility bill savings directly. An apartment building doesn't work that way. The owner capitalizes the roof, the inverter, and the interconnection; the tenants hold the individual electric accounts and pay PG&E, SCE, or SDG&E directly every month.

If there's no way to route the solar system's savings back to whoever's paying for the capital, the person with the checkbook has no financial reason to write the check.

This is the split-incentive problem, and it's the reason multifamily solar adoption in California has lagged single-family adoption for years, not a technology or cost issue on its own (source: KPBS, Canary Media reporting on the policy landscape).

California built two structurally different fixes. Virtual net metering (and its successor, the net billing tariff) is a billing mechanism: it lets a property owner allocate one interconnected system's credits across multiple accounts on one property, common-area and tenant alike, in whatever split the owner sets.

SOMAH is a program requirement layered on top: for projects that qualify, at least 51% of the energy produced must go to tenants as bill credits, not to the owner. VNEM/VNBT makes sharing possible. SOMAH makes it mandatory, for the subset of buildings that qualify.

Which one applies to your property is the single most important fact to establish before running any other numbers.

How the money moves: VNEM and its replacement, VNBT

Virtual net energy metering (VNEM) was the original CPUC tariff that let a single solar installation's output be divided across a multifamily property's common-area and individual tenant meters. As of February 15, 2024, new applicants use its replacement, the Virtual Net Billing Tariff (VNBT), under CPUC Decision 23-11-068.

The one carve-out: SOMAH and MASH projects keep the legacy VNEM tariff rather than moving to VNBT.

Under VNBT, exported power is compensated at the Avoided Cost Calculator (ACC) rate rather than retail rate — the same shift NEM 3.0 made for single-family export credits. Residential tenant ("benefiting") accounts get 15-minute interval netting against their allocated share, the closest thing to old-style netting that survives under the new tariff.

Nonresidential common-area accounts instead get dollar-denominated bill credits with no netting, and can sit on any applicable rate schedule.

We are not quoting a specific VNBT export rate in cents per kWh for multifamily accounts here — in September 2026, PG&E and SDG&E had published 2026-vintage ACC data but SCE had not, and the figure is not directly comparable to residential NEM 3.0 export values.

One fixed mechanic worth knowing operationally: once an owner sets the percentage split across common-area and tenant accounts, that split has to hold for a minimum of 12 months before it can be revised.

SOMAH: the program built specifically for affordable housing

SOMAH (Solar on Multifamily Affordable Housing) exists to solve the split-incentive problem directly rather than just enabling a workaround.

Eligibility requires all of the following: the property is deed-restricted low-income rental housing; it has a minimum of 5 units; every unit is individually metered; the property is existing construction (new construction only qualifies if the system exceeds what code already requires); and it's served by PG&E, SCE, SDG&E, Liberty, or PacifiCorp.

On top of that baseline, at least one of four conditions must also be true: 66% or more of residents are at or below 80% of area median income, the property sits in a disadvantaged community (top 25% on CalEnviroScreen), the property is tribally owned, or it's owned by a public housing authority.

The program's core mechanism is the 51% rule, confirmed directly against calsomah.org's current eligibility page: at minimum, 51% of the total energy a SOMAH project produces must flow to tenants as bill credits rather than to the owner or common areas.

On incentive dollar amounts, calsomah.org's currently published rate table (checked September 2026) shows tenant-allocated capacity earning $3.50 per AC-watt if the project stacks no other tax credit, stepping down to $2.45 if it also uses the federal ITC and $1.75 if it stacks both the ITC and the Low-Income Housing Tax Credit.

Common-area-allocated capacity follows the same pattern: $1.19, $0.87, and $0.65 per AC-watt across those same three tiers. A storage add-on, where available, runs a flat $1.10 per watt-hour regardless of tax-credit stacking. Because SOMAH's table steps down as statewide capacity is claimed, confirm the currently active step directly against calsomah.org's live incentive table before budgeting to these numbers.

One closed-program clarification worth having on hand: SOMAH's predecessor, MASH, stopped accepting new applications at the end of 2021, but existing MASH projects' legacy VNEM tariffs remain open for enrollment. If you're evaluating an older multifamily solar installation, it may already be on a MASH-era VNEM tariff that current applicants can no longer access.

SOMAH's pace: funded, open, and accelerating

SOMAH carries a $100 million/year funding authorization and a hard target of 300 MW installed statewide by 2032.

Older reporting on this program understated where it stands today: calsomah.org's own tracker (checked September 2026) puts the program at more than 103 MW from completed and active projects combined — roughly a third of the 2032 target — with $38 million paid out in incentives in 2025 alone, 220 applications submitted that year, and more than 70 already filed in 2026, which the program administrator describes as on pace for a post-launch record.

If you see a much lower installed-capacity figure cited elsewhere for SOMAH, check its date before repeating it — this program's numbers have moved fast enough recently that anything from early 2025 or before will materially understate where it stands now.

Two recent CPUC decisions are relevant if you're evaluating a project timeline. Decision D.24-11-006, issued November 14, 2024, directed a set of program updates — including expanding eligible installation costs, suspending the old buydown calculator, and adding an integrated-storage incentive — that were folded into the SOMAH Program Handbook via an advice letter that took effect June 6, 2025.

Decision D.26-07-029, dated July 2026, sets the process for the program's eventual 2032 closure and reportedly updates multifamily property eligibility standards. This page does not summarize those eligibility changes from the decision text, so if your project's eligibility is borderline, confirm directly against the current calsomah.org handbook rather than relying on older summaries — including this one.

Title 24: what's actually mandatory, and for whom

Title 24's multifamily solar mandate applies only to new construction. If you already own the building, none of this section requires you to do anything — SOMAH, VNBT, and ordinary commercial solar economics are what apply to existing buildings instead.

For low-rise multifamily (three habitable stories or fewer), a solar PV mandate has been in place since the 2019 Energy Code took effect January 1, 2020 — six years running, not a new requirement.

System sizing is generally the smaller of what the roof's solar access allows or a formula-based size, with a floor around 0.8 watts-DC per square foot of conditioned floor area, subject to exceptions.

For high-rise multifamily (four stories or more) and hotels/motels, the mandate expanded with the 2022 Energy Code, effective January 1, 2023, to require both PV and battery storage. The PV system must be sized to cover 60% of the building's estimated electricity use, and a battery storage system is required unless a specific exception applies.

The current cycle — the 2025 Energy Code, adopted July 2025 and effective for projects permitted on or after January 1, 2026 — is in force and continues both mandates; multiple industry summaries describe it as the most aggressive expansion of the solar-and-storage requirements to date. High-rise multifamily's battery requirement continues, with listed exceptions.

One design detail carried forward into this cycle: a low-rise or single-family PV system's required size can be reduced by up to 25% if paired with at least 7.5 kWh of JA12-compliant battery storage per dwelling.

These figures are consistent across several secondary code summaries, but none of them is the California Energy Commission's own code text — confirm against the CEC's published 2025 Energy Code before finalizing plans or a permit submission.

The federal tax credit deadline most multifamily owners don't know about

Multifamily solar — whether serving common areas, tenant meters, or both — is a commercial-use asset when owned by the property owner or a third party, so it accesses Section 48E (the Clean Electricity Investment Credit), not the residential 25D credit that ended December 31, 2025. This applies whether or not the property is SOMAH-eligible.

SOMAH-eligible affordable housing gets an additional lever: the 48E(h) Low-Income Communities Bonus Credit, available for facilities under 5 MW.

It adds 10% for a project located in a low-income community or on tribal land, or 20% for a "qualified low-income residential building project" — which explicitly includes multifamily rental property where at least 50% of the financial value of the energy produced goes to low-income occupants.

The bonus applies only to capacity the Treasury and IRS allocate under §48E(h), so check the current allocation round before counting on it.

The deadline that matters most for anyone weighing a project right now: a solar facility under 48E that begins construction after July 4, 2026 must be placed in service by December 31, 2027 to get any credit at all — not a reduced credit, none (this is the statutory rule from the One Big Beautiful Bill Act, signed July 4, 2025, with IRS mechanics in Notice 2025-42).

A project that began construction on or before July 4, 2026 is not subject to that cutoff; IRS Notice 2025-42 had required such projects to maintain a continuous program of construction, with a safe harbor for facilities placed in service within four calendar years, but that notice has since been vacated.

One complication: on June 6, 2026 the U.S. District Court for the District of Columbia vacated Notice 2025-42 in full as arbitrary and capricious and remanded it to the IRS, in Oregon Environmental Council v. IRS. The July 4, 2026 and December 31, 2027 dates come from the statute and are unaffected by the ruling.

Treat which construction-start test currently applies as unsettled, and confirm it with a tax professional before treating any contractor's "we already started" representation as bankable.

As of September 5, 2026, the July 4 begin-construction cutoff has already passed. Any multifamily solar project not already under construction is racing the December 31, 2027 placed-in-service deadline with no way around it.

Battery storage has a longer runway: it is excepted from the 2027 solar cutoff, and under §48E(e) and §45Y(d)(3) storage whose construction begins in 2033 keeps the full credit, 2034 starts get 75%, 2035 starts get 50%, and later starts get nothing — a real point of contrast if a project is deciding whether to prioritize PV now and storage later.

Batteries: near-mandatory in practice, unevenly subsidized right now

All three ratepayer-funded SGIP budgets — General Market, Equity, and Equity Resiliency — closed to new applications December 31, 2025.

What's left is the RSSE AB 209 budget, a separate $280 million state-funded pot reserved for income-qualified households (at or below 80% of area median income, or enrolled in CARE, FERA, or ESA) installing paired solar-plus-storage or a storage-only retrofit on existing solar.

Its status isn't one number statewide, and it changes step-by-step as funds get claimed.

As of early September 2026, selfgenca.com's live program tracker showed PG&E's plain AB 209 sub-budget actively accepting new reservations (a step that opened September 30, 2025), while several other utility territories were showing waitlist status on that same budget category at the same time — and a related but separate sub-budget split for customers of publicly owned utilities added another layer of variation on top of that.

Don't take a single blanket "it's open" or "it's closed" answer from any source, including this one — pull the current step status for your specific utility territory directly from selfgenca.com/home/program_metrics before budgeting a rebate in.

For multifamily specifically, RSSE-type storage programs typically require 5 or more rental units and the same low-income or disadvantaged-community qualification tests SOMAH itself uses — so a property that doesn't clear SOMAH's eligibility bar generally won't clear this one either.

Combine that with the fact that Title 24 only mandates battery storage for new high-rise construction, and the practical result is straightforward: most existing multifamily properties adding storage today are either paying full commercial battery pricing with no state rebate underneath it, or sitting on a waitlist with no guaranteed timeline.

This mirrors what's already true on the residential side of this business — batteries are increasingly necessary given how export compensation works under VNBT, but the subsidy layer that used to soften that cost has mostly closed.

What a multifamily-scale system actually costs

No published source gives a multifamily-specific installed cost per watt.

The best available substitute is LBNL's non-residential pricing by system size: LBNL's Tracking the Sun (2024 Edition) put 2023 installed prices for small non-residential systems (100 kWdc or less) at $2.50 to $4.30 per watt and for large non-residential systems (over 100 kWdc) at $1.70 to $3.10 per watt, 20th to 80th percentile, national.

Most apartment complexes land in the larger band once common-area and tenant-offset capacity are combined.

No primary source publishes a California price for commercial battery storage either, so get the battery bid as its own line and compare it in dollars per usable kWh. Get an actual bid before committing capital.