Solar Tax Incentives and Savings in the Sacramento Area (2026)
Solar incentives changed in 2026. The federal tax credit for homeowners ended, California’s property tax exclusion has a year-end deadline, and the biggest savings now depend on your utility. Here’s what’s still available to homeowners in Sacramento and Placer counties.
California Property Tax Exclusion: Deadline December 31, 2026
Installing solar won’t raise your property tax assessment if the system is completed before January 1, 2027. Systems that qualify keep the exclusion until the home changes ownership. Under current law, systems finished after that date will be assessed as new construction, and a bill to extend the exclusion stalled in the Legislature this year.
The system has to be fully installed, not just contracted, before the deadline. Permitting and installation take time, so homeowners who want this protection should start soon.
More info — California State Board of Equalization
What Happened to the Federal Solar Tax Credit?
The 30% federal Residential Clean Energy Credit ended for systems installed after December 31, 2025. Homeowners who buy a system in 2026, with cash or a loan, can’t claim it.
- Installed in 2025 or earlier? You can still claim the credit on your 2025 return, and unused credit carries forward to future years.
- Leases and power purchase agreements (PPAs) work differently. The company that owns the system can still claim a federal credit through 2027, which can be reflected in lease and PPA pricing. The homeowner does not claim it.
More info — IRS Residential Clean Energy Credit
Battery Rebates and Grid Programs
Self-Generation Incentive Program (SGIP): SGIP battery rebates have limited funding, and availability changes. PG&E currently lists its residential General Market and Equity Resiliency rebates as closed to new applications, and its income-qualified Residential Solar and Storage Equity rebate as closed with a waitlist that a contractor can submit an application to. Ask Magic Sun Solar about current SGIP availability.
Demand Side Grid Support (DSGS): This California Energy Commission program pays battery owners for supporting the grid during extreme events from May through October. Homeowners enroll through approved providers, including some battery manufacturers. Eligibility depends on your utility and battery brand.
SMUD Customers (Most of Sacramento County)
SMUD’s Solar and Storage Rate pays 9.6¢ per kWh for excess solar sent to the grid, at any time of day. Storing solar in a battery for SMUD’s 5 to 8 p.m. peak hours lowers your bill further.
SMUD’s My Energy Optimizer Partner+ program pays a one-time enrollment incentive for home batteries:
- $300 per kWh of battery capacity, up to $6,000 per household, for projects submitted for interconnection on or after September 23, 2026.
- Requires enrollment on SMUD’s Solar and Storage Rate, and in the program within 90 days of receiving permission to operate.
- Tesla Powerwall owners also currently earn a quarterly incentive of $110 per battery.
- Eligible brands include Enphase, Franklin, SolarEdge, Sonnen, Tesla, and Eguana.
More info — SMUD Solar and Storage Rate
More info — SMUD Battery Incentive
PG&E and Pioneer Customers (Rocklin, Lincoln, Loomis, Auburn, and Unincorporated Placer County)
In these areas, PG&E delivers your power and Pioneer Community Energy supplies it. New solar customers are enrolled in PG&E’s Solar Billing Plan (also called the Net Billing Tariff or NEM 3.0), which values exported solar by season, day, and hour, and moves you to PG&E’s Electric Home time-of-use rate.
Exported solar usually earns less than what you pay for grid power, so the savings come from using your solar at home. A battery stores daytime solar for the evening, when grid power costs the most.
More info — PG&E Solar Billing Plan
More info — Pioneer Community Energy
Roseville Electric Customers
Roseville runs its own utility and its own solar program. New solar customers are enrolled in Roseville Solar 2.0, with surplus energy credits set by the City Council. Roseville Electric’s rate page lists the current surplus energy rate.
Federal Solar Tax Credit for Businesses
The 30% federal tax credit for solar ended for homeowners at the end of 2025, but it’s still available for business-owned systems, for now. The window to start construction under the more generous multi-year timeline closed in July 2026, so the rule that now applies requires your solar project to be placed in service by December 31, 2027 to qualify for the 30% base rate.
That base 30% can go higher, too. Projects using qualifying U.S.-made components can add a 10% bonus on their own, reaching 40%. There’s also a separate 10% bonus for projects in a designated “energy community,” though that one is aimed at areas with a legacy of coal mining or fossil fuel employment, which most Sacramento-area properties won’t qualify for on their own. Worth checking your specific address regardless. Most small business systems, under 1 megawatt, qualify for the full base rate automatically, without needing to meet the labor requirements that apply to larger commercial projects.
With a little over a year left on the clock, eligibility depends on your project’s timeline, location, and equipment sourcing, so we recommend starting the conversation soon and confirming the details with a qualified tax professional. Contact Magic Sun Solar to talk through your business project and current eligibility.
Learn more: IRS: Clean Electricity Investment Credit · DOE mapping tool: check if your location qualifies as an energy community
Get Personalized Guidance
At Magic Sun Solar, we help Sacramento-area homeowners understand and take full advantage of the solar incentives available to them. We stay up to date with state, federal, and utility-based programs so our customers maximize their savings and make informed decisions.
📞 Call us at (916) 259-2587 or email us today for a free consultation. Let’s find out how much you can save with solar in 2026!
Our team proudly serves homeowners and businesses across Greater Sacramento, including Roseville, Rocklin, Folsom, Citrus Heights, and beyond.