For two decades, almost every rooftop solar quote in America was built on a federal subsidy. The 2025 federal tax law ended the residential credit early, and 2026 is the first year homeowners are seeing solar at its true sticker price. Most haven't caught up — and neither have some of the sales pitches.
What actually changed
| How you get solar | Where the math stands in 2026 |
|---|---|
| Cash purchase | No federal credit. Full system price, offset only by your energy savings — payback periods lengthened meaningfully. |
| Solar loan | Same as cash, plus interest. The loans that penciled with a 30% credit rebate are the ones to re-examine hardest. |
| Third-party ownership (lease / PPA / energy service agreement) | The provider owns the system and may still capture business-side incentives, which can be reflected in the rate they offer you. This is a big part of why third-party arrangements got relatively more attractive in 2026 — but the value depends entirely on the specific agreement's terms. |
The other half of the math: NEM 3.0
The credit's expiration landed on top of a change California made back in 2023: under NEM 3.0 billing, the credit you get for exporting surplus power to the grid was cut dramatically compared to the old net-metering deal. In practice that means a system that just dumps excess power to the grid earns little for it — which is why nearly every well-designed San Diego system now pairs with a battery, storing your surplus to use at night instead of selling it cheap.
How to think about it in 2026
- Size to your usage, not your roof. Oversizing was already questionable under NEM 3.0; without the credit it's the fastest way to a system that never pays for itself.
- Get the with-battery and without-battery numbers separately, and ask for the payback period on each with no tax credit in the math. If a quote still shows a federal credit line, that tells you something about the company.
- Compare ownership against third-party options honestly. Owning means the savings are all yours eventually — at 2026's full sticker price. A lease or energy service agreement trades some long-run upside for little or no upfront cost. Which wins depends on your bill, your timeline, and the agreement's terms — it's a math problem, not a slogan.
- Fix efficiency first. A few thousand dollars of attic insulation or an aging-AC replacement can shrink the solar system you need — cheaper than generating power to feed waste.
Tax law and utility billing rules change, and individual eligibility varies; this page reflects federal and California rules as we could verify them in August 2026 and is not tax advice. Run your own numbers — or let a vetted local pro run them with you, with the current rules and no yesterday's-subsidy math.
Sources: 2026 solar incentive status (25D expiration) · CPUC — Net Billing (NEM 3.0)