Is Solar Worth It in San Diego in 2026?

The short answer

Is solar still worth it without the tax credit?

Verdict: worth it for most SDG&E households with bills over $150/month — because San Diego's electricity rates are the real story. At $0.55–$0.70/kWh during 4–9 PM peak hours, SDG&E customers pay some of the highest rates in America. Solar isn't competing against cheap grid power here; it's competing against the most expensive. The federal credit's expiration stretched payback from ~7 years to 9–10, but it didn't change what you're escaping.

What changed

The 2026 math versus the old math

Factor	2025 (with credit)	2026 (today)
Federal 30% credit	Available	Expired Dec 31, 2025
Net cost, 9.2 kW system	~$15,900	~$22,700 (full cash price)
Cash payback	~7 years	9–10 years
With SDCP battery rebate	—	7–8 years
25-year net savings	~$118K–130K	~$95K–118K
Property tax exclusion	Active	Expires after Dec 31, 2026

Who it's for

Who should — and shouldn't — go solar in 2026

Your situation	Verdict	Why
Bill over $250/mo, staying 10+ years	Strong yes	Payback well inside your ownership window; savings compound as rates rise.
Bill $150–$250/mo, SDCP customer	Yes, with battery	SDCP rebate (up to $6,750) makes solar + battery the best-value configuration.
Bill under $120/mo	Marginal	Payback stretches past 12 years; consider efficiency upgrades first.
Moving within 5–7 years	Depends	Solar adds home value, but you may not recoup full system cost at sale.
Roof needs replacement soon	Not yet	Replace the roof first — removing and reinstalling panels costs $3,000–$6,000.
Heavily shaded roof	No	Production losses break the math. Get a shade analysis before quoting.

The 2026 deadline

Why installing in 2026 specifically matters

California's property tax exclusion for solar expires for systems installed after December 31, 2026. Install this year and your system never raises your property assessment — worth roughly $150–$260 every year, permanently. Install in 2027 and your assessed value goes up with the system. Combined with 6–12 week installation timelines, the practical deadline for starting is early fall 2026.

Is solar worth it? The questions everyone asks

Is solar worth it in San Diego in 2026 without the federal tax credit?+

For most SDG&E customers, yes. Even at full cash cost (~$22,700 for a typical 9.2 kW system at $2.47/W), payback runs 9–10 years against SDG&E rates of $0.55–$0.70/kWh at peak — among the highest in the nation — and 25-year net savings are approximately $95,000–$118,000. The math is tighter than it was in 2025, but San Diego remains one of the strongest solar markets in the country because the rates you're avoiding are so high.

Who should NOT go solar in San Diego in 2026?+

Solar is a weak fit if your monthly bill is under ~$120, you plan to move within 5–7 years and can't roll the cost into your home's value, your roof needs replacement within a few years (replace first), or your roof is heavily shaded. Renters can't install without the owner's involvement.

How did NEM 3.0 change the solar math in San Diego?+

NEM 3.0 (the Net Billing Tariff) cut export credits to $0.05–$0.08/kWh, roughly 75% lower than NEM 2.0. Solar-only systems now capture much less value from midday exports. The winning configuration is solar plus battery: store your afternoon production, use it during 4–9 PM peak hours, and avoid $0.55–$0.70/kWh grid power.

Is a battery worth it with SDCP's rebate?+

In SDCP territory, usually yes. The Solar Battery Savings Program pays $250–$500/kWh upfront (up to $6,750 for a Tesla Powerwall) plus ~$250/yr in performance payments. That offsets roughly half the battery's installed cost and shortens combined payback to about 7–8 years, versus 9–10 for solar-only cash purchases.

What if I wait a year — will solar get cheaper?+

Hardware prices drift down slowly, but two things argue against waiting: California's property tax exclusion expires for systems installed after December 31, 2026 (worth ~$150–$260/yr permanently), and every year on SDG&E rates costs a typical household $3,000+ that solar would have avoided. Waiting 12 months to save a few hundred dollars on hardware usually costs more than it saves.

How much does the average San Diego homeowner actually save?+

A typical North County home with a $280/month SDG&E bill installing a 9.2 kW system with battery saves roughly $3,400 in year one, growing as rates escalate. Over 25 years, net savings after system cost are approximately $95,000–$118,000 at current rate trajectories.

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