Key takeaways
SDG&E's average residential rate, about 45.7¢/kWh as of January 2026, is roughly triple the national average of about 16.5¢ (Cal Advocates; EIA).
Solar is already normal here: more than 350,000 SDG&E residential customers — better than one in four — generate their own power, one of the highest rooftop-solar adoption rates in the nation (SDG&E, July 2026).
Since April 2023, new solar homes are on Net Billing: exported power earns a few cents per kWh at midday, not the retail rate your neighbors locked in years ago.
A battery stores your midday solar for the expensive 4 to 9 p.m. hours instead of selling it for pennies. That self-use is where the value is now.
The 30% federal tax credit for purchased systems ended after 2025. What remains is an upfront incentive of roughly 20–35% and, for qualifying homes, a San Diego Community Power rebate of up to $10,000.
Solar alone still leaves an evening bill, and solar shuts off in an outage without a battery. Plan for both pieces from the start.
Yes — but not the way it worked before 2023. SDG&E's average residential rate was about 45.7¢ per kWh in January 2026, among the highest in the country, so making your own power still beats buying all of it. The catch: new solar systems now earn only pennies for power sent to the grid at midday, so a battery is what makes the math work. In 2026, solar is a solar-plus-battery decision.
What does SDG&E power cost now?
More than almost anywhere else in America. California's average residential rate was 32.0¢ per kWh in 2024, second only to Hawaii, and SDG&E's own residential average reached about 45.7¢ in January 2026 (Cal Advocates Q2 2026 rates report; EIA). Baseline residential rates are up about 122% since 2016. On top of the per-kWh price, every residential customer now pays a Base Services Charge of about $24 a month, solar or not, and it cannot be offset by solar credits.
This is the backdrop for every solar conversation in San Diego. When grid power costs this much and keeps rising, generating your own has real value. The question is no longer whether your roof can make power cheaper than SDG&E sells it. It can. The question is what happens to the power you make but don't use in the moment — and that answer changed completely in 2023.
San Diegans figured this out early. More than 350,000 SDG&E residential customers — better than one in four — now generate their own power, one of the highest rooftop-solar adoption rates in the nation (SDG&E, July 2026). This region didn't lead the country in solar because panels are fashionable. It led because the power costs more here, and for years the deal for going solar was generous. The deal is the part that changed.
Why doesn't solar work the way it used to?
Because the deal for exported power was rewritten. Homes that went solar before April 15, 2023 locked in net metering: every kWh sent to the grid earned roughly the full retail rate. New systems fall under Net Billing (SDG&E calls it the Solar Billing Plan), where exports are paid at values set by the state's Avoided Cost Calculator.
At midday, when your panels produce the most, those export values are close to zero — often 0 to 6¢ per kWh, and in spring as low as a fraction of a cent.
The practical result: a solar-only home sells its surplus for pennies at noon and buys power back at the highest rates of the day from 4 to 9 p.m. Solar still covers your daytime use directly, which is real savings. It just doesn't bank value the way it did for your neighbors. Anyone quoting you 2019 economics for a 2026 system is quoting a program that no longer exists.
So why does a battery change the math?
Because a battery keeps your midday power yours. Instead of exporting surplus solar for 0 to 6¢, the panels charge the battery, and the battery runs your home through the late afternoon and evening, when grid power costs the most. Every kWh you use yourself is a kWh you don't buy at peak prices. Under Net Billing, that shift — not more panels — is most of the value.
A battery also fixes solar's least-known flaw: in an outage, a solar-only system shuts off automatically, even in full sun, for line-worker safety. With a battery, your home keeps running on stored power. Given SDG&E's wildfire safety shutoffs, that is not a theoretical benefit in San Diego County.
One sizing point matters more than it used to: under Net Billing, the math runs almost minute by minute — power you produce in one moment doesn't bank credit for the next. So oversizing a system to stockpile credits doesn't pay; the surplus just becomes more pennies-per-kWh exports. Oversizing can still make sense for a different reason: if you expect to use more electricity — an EV on the way, a growing household, more hours at home — or to offset panel degradation over the years. Most homes do end up using more power once they go solar. The right system is sized to how you actually live and where your usage is headed — which is a usage-data question, not a sales guess.
What incentives are left in 2026?
Fewer than the ads imply, but real ones. Three facts cover most of it.
The 30% homeowner tax credit is gone for purchases. It ended for systems finished after December 31, 2025. A cash or loan purchase in 2026 gets no federal credit. Be wary of anyone still leading with it.
The upfront incentive replaced it for many buyers. When a system is structured through a finance partner, the partner claims a federal commercial credit and passes most of the value to you as a discount on day one — typically 20 to 35% below the cash price. It is not a credit you claim yourself, and you don't need a tax bill to benefit from it.
San Diego Community Power pays a battery rebate. SDCP's Solar Battery Savings program pays up to $10,000 per project for a qualifying battery, plus a yearly performance payment of about $150–$175 per battery for discharging on its weekday schedule. Funding is limited and qualification depends on your address and usage data.
For the battery itself, Loft™'s approved ranges are: one battery about $18,000–$21,000 installed before incentives, roughly $8,000–$14,000 after them; two batteries about $29,500–$33,000 before, roughly $10,000–$19,000 after (October 2026). One pricing note: those ranges are for adding a battery on its own. When a battery is installed together with new solar in the same job, most installers discount it by about $2,000 compared with adding it later as a separate retrofit. Solar pricing is sized per home, which is exactly why a real plan starts with your usage data.
The bottom line
Solar in San Diego is still worth it in 2026 — SDG&E's rates see to that. What changed is the shape of a smart system: panels sized to your real usage, a battery to keep your midday power for the expensive evening hours, and incentives claimed under today's rules instead of the ones in old advertisements. Control over your power, protection from the next rate increase, and a home that stays on in an outage. That is the modern case, and it is a strong one.
The next step is a free Custom Battery Plan appointment. Loft™ is an independent planning firm, not an installer: an advisor builds your plan from your detailed usage data from SDG&E, shows you solar-only and solar-plus-battery side by side with exact numbers, and tells you straight if your home is one of the ones where it doesn't pencil out.
FAQ
Can I install solar now and add a battery later?
Yes, and many people do. Two honest cautions: solar and battery installed together usually price better than two separate jobs — most installers discount the bundled battery by about $2,000 — and every month solar-only under Net Billing is a month of exports earning pennies. And if the plan is to wait and save up to pay cash, run the financing numbers first: a loan payment is often lower than the SDG&E bill you'd keep paying while you save, and financing locks in today's incentives instead of whatever is left later. (As a benchmark, California's state-subsidized Go Green loans through Travis Credit Union were 6.74% on a 10-year term and 7% on 15- or 20-year terms as of October 20, 2026 — rates change, so treat those as a dated snapshot, not a quote.) If budget forces a sequence, get the battery sooner rather than later.
Will solar make my SDG&E bill zero?
No. The roughly $24 monthly Base Services Charge applies to every residential customer and can't be offset by credits, and most homes still buy some evening power. A well-designed solar-plus-battery system can cut a bill dramatically. Zero is a sales word, not a planning number.
Does solar work during a power outage?
Not by itself. Solar-only systems shut down when the grid goes down. A battery is what keeps your home powered, using stored energy while the grid is out.
Is the 30% federal tax credit really gone?
For systems you buy, yes. It ended for installations finished after December 31, 2025. The value now reaches homeowners through the upfront incentive on financed or leased structures, where the finance partner claims a commercial credit — and that credit is on two very different clocks. For solar, it is ending fast: a new project that did not start construction by mid-2026 must be in service by December 31, 2027 for any credit to exist. For batteries, the credit runs at full value into the early 2030s, phasing down in 2034–2035 — but qualifying batteries face foreign-parts rules that get stricter every year. Either way, the incentive available to you is the one in effect when your system goes in, which is one more reason delay works against you.
Should I wait for prices or rules to get better?
Rates have moved one direction for a decade. Waiting mainly means more months paying SDG&E's full price. Technology is not a reason to wait either: panel prices have not dropped much in five years, and a kilowatt-hour your roof makes today is the same kilowatt-hour it would make in ten years — better future panels would mostly save roof space, which is not most homes' problem. If the numbers work for your home today, they are unlikely to improve by delay.
By Loft™ Home Energy Co. — an independent home energy planning and advisory firm for San Diego homeowners. Published October 20, 2026. Last updated October 20, 2026. Rate figures from Cal Advocates Q2 2026 rates report and EIA state data; solar adoption figures from SDG&E (July 2026); Net Billing export values from SDG&E's Solar Billing Plan pricing files and the Loft™ San Diego Solar Knowledge Base; federal commercial-credit timelines per the 2025 amendments to IRC §48E (One Big Beautiful Bill Act); rebate terms from the SDCP Solar Battery Savings program manual; pricing ranges are Loft™'s approved gross-then-net figures. Applies to SDG&E territory; SCE and PG&E differ. Nothing here is tax advice.
