Is Solar Worth It Without the Federal Tax Credit? San Diego in 2026

Short answer: yes, for most homeowners in San Diego County. Here is the math, and it is actually better than the headline reads.

The 30% federal solar tax credit (the ITC) expired for residential systems on December 31, 2025. That sounds like the kind of thing that should kill solar economics, and a lot of people I have talked to in Carlsbad, Encinitas, and Fallbrook have been waiting for the verdict before they pull the trigger.

Here is the verdict. SDG&E rates are now high enough on their own that a properly sized solar and battery system pays itself back in roughly 6 to 8 years for a typical North County home. Bundle it with a battery, an EV charger, or a panel upgrade and we can usually shave another $4,000 to $10,000 off the project, which gets some of our clients to a 5-year payback. I will walk through both pieces below.

I am Ian Crilly, residential manager at RCH Renewables. I am on every residential solar job we install. C-10 license #1108682. We have completed 240+ projects across San Diego County, including roughly 33 residential solar installs and counting. We are headquartered in Fallbrook, and I am writing this for the homeowner who has been sitting on the fence and wants the math without the sales pitch.

What actually changed on December 31, 2025

The Inflation Reduction Act's residential solar credit (Section 25D) expired at the end of 2025. For systems installed and placed in service starting January 1, 2026, there is no 30% federal credit on the homeowner's tax return.

That is the change. Here is what did not change:

• SDG&E's rates. They went up 11.6% in January 2026. Another 28% increase is in regulatory review.
• California's net energy metering rules. NEM 3.0 still applies to new solar interconnections.
• The manufacturer warranties on the equipment: 25-year product and 30-year linear output on the JASOLAR 440W panels we install, 10 years on Tesla Powerwall, 15 years on Enphase IQ Battery and FranklinWH.
• Property tax exclusions for solar in California (still active through January 1, 2027).

The federal piece went away. The reason most people install solar (an SDG&E bill that keeps climbing) got worse, not better.

The new payback math, without the credit

Here is a representative example. Numbers are rounded, every home is different, and we will give you exact numbers when we look at your panel and your bill.

That puts solar-only payback at roughly 5 to 8 years on the system price. Twenty-five-year lifetime savings on a system like this run around $90,000 to $100,000 in this rate environment, per EnergySage's San Diego market data¹.

The ITC used to shorten that by about two years. Now it does not. Solar-only payback in 2026 looks like solar-only payback in 2018, before the credit got bumped back up. People paid for it in 2018 and they are paying for it now.

NEM 3.0 is the bigger deal than the ITC, and why every new system needs a battery

The 2025 ITC expiration gets the headlines. NEM 3.0, which took effect in April 2023, has done more to reshape how a San Diego solar system gets designed.

Under NEM 2.0, you got nearly retail credit for every kWh you exported back to the grid. Under NEM 3.0, the export rate dropped roughly 75%. Sending a kWh to SDG&E during the day pays you about 5 to 8 cents. Buying it back at peak (4 to 9 PM) costs you 38 cents.

A solar-only system under NEM 3.0 still saves money but the math is much weaker. The fix is a battery. Instead of exporting your daytime production for pennies and buying it back at peak rates, the battery holds your own kWh until you need them.

A solar-only system under NEM 3.0 with no battery often pencils out at 9 to 12 years. That is the spread the battery is closing.

If a contractor in 2026 is quoting you a solar-only system without explaining the NEM 3.0 export math, ask why. There are scenarios where solar alone makes sense (very low evening usage, plans to add a battery within a year or two), but most North County homes need both for the savings to land. We have a full breakdown on our Tesla Powerwall installation page if you want the deeper dive.

Why SDG&E is doing the work the ITC used to do

A 30% credit on a $25,000 system is $7,500 once. SDG&E rates are up roughly 50% over the last five years, with an 11.6% bump this past January and another 28% in regulatory review².

That means the longer you sit on the decision, the more the bill side of the equation grows. The credit was a one-time fixed reduction. Your SDG&E bill is a compounding cost.

A homeowner who installs solar and battery this year locks in their cost of electricity for 25 years. A homeowner who waits another two years to see what happens with rates pays SDG&E an extra $7,000 to $10,000 in the meantime, which is roughly what the lost ITC was worth.

The math problem the credit solved, the rate environment is now solving. Just less neatly.

How bundling makes the 2026 math better than the ITC ever did

The federal credit was a flat 30% off whatever you spent. We have been quietly running a discount stack for our clients that, in the right configuration, can save more than the ITC would have.

Here is the bundle pricing we are running in April 2026:

These stack. If you are doing solar, a battery, an EV charger, and a panel upgrade in the same project, the combined bundle savings can clear $10,000 on a 12 kW system.

The reason the discount works is not magic. We pull one permit instead of four. We mobilize the crew once instead of four times. We schedule one inspection instead of four. The cost we save on the operations side, we pass through on the project side.

The point is not that everyone needs every piece. The point is that the marginal cost of adding the next piece during one project is far lower than scheduling it as its own job a year later. One permit pull. One mobilization. One inspection. One discount stack.

If you are weighing solar today and thinking about an EV, a battery, or a panel upgrade in the next two or three years, doing them together costs less than doing them apart.

Financing through Go Green

For homeowners who do not want to write a check for the full project up front, we work with GoGreen Financing. GoGreen is a state-supported program that pools rates from a panel of California credit unions, all underwriting solar and battery loans on the same standardized terms.

On a $25,000 to $40,000 solar plus battery project, a 20-year GoGreen term typically lands around the same monthly cost as your current SDG&E bill. The trade is clean: you stop paying SDG&E and start paying down a system you own that pays itself off in roughly 6 to 8 years. After that the system keeps producing for another 15-plus years for free.

Rates change. The numbers above were last published by GoGreen on April 22, 2026. We will pull current rates for you when we quote your project, walk you through which lender on the panel is the best fit, and you handle the application directly with them. We are not the lender, so we cannot lock a rate, but we can tell you what other clients are seeing this month.

A note on resale value

Before I get to the cases where solar does not pencil out, I want to address the most common misconception I hear from homeowners thinking about a move in the next few years: “If I install solar and then sell, I just give it to the next owner.”

That is not how appraisals work in San Diego.

A 2019 Zillow study showed homes with owned solar sold for about 4.1% more nationally³. Lawrence Berkeley National Lab found a premium of roughly $4 to $5 per watt of installed solar⁴. Those numbers are higher in high-rate markets like SDG&E territory because the buyer is effectively buying the future savings, and the future savings are bigger when the utility bill is bigger.

If you sell three years in, you do not lose the money you put into solar. You either get it back at sale or you took the savings during the years you lived in it.

The cases where solar still does not pencil out

Honest answer time. There are situations where I will tell a homeowner to wait or skip.

For everyone else, the question is when, not if. And every month of waiting is an extra SDG&E bill paid.

How to avoid getting taken on a 2026 install

The ITC going away has flushed some predatory players out. The companies that built their pitch around “lock in the credit before it expires” need a new pitch. A few are getting honest. Most are inventing new urgency.

What I would tell my own family right now:

What we tell homeowners on the first call

The first call with us is short. We ask:

1. What is your average SDG&E bill, and what is the peak month
2. What is your usage like in the evening (any EVs, induction range, hot tub)
3. What is the age and material of your roof
4. Are you planning any other electrical work in the next 1 to 2 years (EV charger, panel upgrade, ADU)

From those four questions, I can usually tell you within ten minutes whether solar makes sense for your home, roughly what size system you need, and roughly what it costs. We do not pressure-quote. If solar does not pencil out, I will tell you that.

The homeowners who say yes to RCH typically take two to eight weeks from first call to install. It is not an impulse decision and we do not treat it like one.