A lot changed for solar, batteries and EV charging in 2026, both in Washington and in Sacramento. Some of it is settled law, and some is still being debated in Congress. Here’s a plain-English rundown for Southern California homeowners and business owners: what’s already decided, what it means for you, and what to keep an eye on.
What’s Already Decided
1. The 30% homeowner solar tax credit has ended, but leases and PPAs can still benefit
The federal residential clean energy credit (Section 25D) ended for systems installed after December 31, 2025. That includes solar panels and home batteries that a homeowner buys outright or finances with a loan.
Solar leases and power purchase agreements (PPAs) work differently. With these, a third-party company owns the system, and that company can still claim the commercial clean energy credit (Section 48E). Federal deadlines apply to those owners too: solar generally has to be in service by the end of 2027 unless construction started earlier, while batteries stay eligible longer. How much of that savings reaches your monthly payment depends on the contract, so compare offers carefully. Our guide to solar leases vs. energy service agreements explains the differences.
Is solar still worth it without the credit? For most California homeowners, yes. Electric rates here are among the highest in the country and keep climbing, and a properly sized solar and battery system still cuts monthly bills significantly. The payback period is longer than it was with the credit, but the long-term savings remain.
2. Businesses face a December 31, 2027 deadline
For commercial solar, the federal credit is still available, but the clock is running. Solar projects that didn’t begin construction by July 4, 2026 must be placed in service by December 31, 2027 to qualify. Battery storage remains eligible for much longer.
Commercial projects take time. Design, permitting and utility interconnection can take many months on their own. Business owners, HOAs, clubs and nonprofits that are thinking about solar should start planning now. Read more in our post on commercial solar timing and the 2027 deadline, or see our commercial solar services.
3. The federal EV charger credit expired June 30, 2026
The federal tax credit for home EV chargers (Section 30C) no longer applies to chargers installed after June 30, 2026. Utility programs can still help. Southern California Edison’s Charge Ready Home program, for example, has helped eligible customers pay for panel upgrades and new 240-volt circuits, and SDG&E has offered its own charger rebates. Programs, amounts and eligibility change often, so check SCE’s or SDG&E’s website for what’s currently available before you install. We’re happy to help you figure out what applies to your home. Learn more about our EV charger installation.
4. Plug-in “balcony” solar becomes legal in California on January 1, 2027
Governor Newsom signed SB 868, the Plug and Play Solar Act, in late September 2026. Starting January 1, 2027, Californians can use small solar kits, up to 1,200 watts, that plug into a regular outlet without going through the utility’s interconnection application. The equipment must be certified to a new UL safety standard.
Plug-in solar vs. a full rooftop system: Balcony kits are a nice option for renters and condo owners who can’t put panels on a roof. But at 1,200 watts or less, they offset only a small slice of a typical home’s usage. A properly sized, permitted rooftop system, especially one paired with a battery, saves far more over its lifetime. If you’re a homeowner, a full system is still the way to get serious savings.
5. California is moving toward paying home batteries for helping the grid
Governor Newsom also signed two “virtual power plant” bills, SB 913 and SB 905. A virtual power plant is a network of home batteries, EV chargers and smart thermostats that work together to support the grid when demand peaks.
- SB 913 directs the California Public Utilities Commission (CPUC) to value home batteries that send power to the grid during strain, and opens more paths for them to participate in electricity markets.
- SB 905 requires a measure of how fully each part of the local grid is used, encouraging devices like batteries and EV chargers to shift their energy use to times when it’s cheaper and easier for the grid.
How much homeowners will actually earn depends on how the CPUC carries out these laws, so the details are still to come. The direction is clear, though: your battery may soon earn money, not just keep your lights on during an outage.
6. NEM 3.0 is final, which makes batteries close to essential
After court challenges, California’s net billing tariff (often called NEM 3.0) is final. New solar customers earn much less for the electricity they send back to the grid than they used to. The best way to get value from your panels now is to store your extra daytime solar in a battery and use it in the evening, when rates are highest.
That’s why we recommend pairing almost every new solar system in California with a battery. Read why battery storage is now a must under NEM 3.0, or learn more about our solar battery backup services.
What to Watch in Congress
These proposals aren’t law. Their status may change quickly, especially after the November 2026 elections.
Permitting reform: the American Affordability and Jobs Act
A bipartisan group of Senate leaders from the energy and environment committees has introduced a permitting reform package. A Senate vote could come soon after the midterm elections, and any final bill would still need to be reconciled with the House-passed SPEED Act. Provisions relevant to solar and battery customers include:
- Faster environmental reviews for small solar and battery projects on already-developed land
- Support for transmission upgrades
- A requirement that data centers pay for the grid upgrades they need, which supporters say will help protect household electric bills
Supporters, including Sen. Martin Heinrich and many industry and contractor groups, say the bill speeds up energy projects while keeping important safeguards. Critics, including environmental groups and some House Democrats, argue it weakens environmental review and community input, particularly for fossil fuel and data center projects.
Bills to bring back the homeowner tax credit
- The Lowering Electric Bills Act (S. 2681), introduced by Sen. Chuck Schumer, would restore the earlier phase-out schedule for the residential credit as well as the commercial investment and production credits.
- The Lowering Home Energy Costs Act, introduced by Sen. Catherine Cortez Masto in January 2026, would extend the residential credit through 2032.
Neither bill has a vote scheduled. We don’t recommend waiting on a credit that may not return. Every month without solar is a month of savings you don’t get back.
The Bottom Line
Solar, batteries and EV charging still make strong financial sense in Southern California, but the right setup and timing matter more than ever. Homeowners should look closely at battery storage and financing options. Businesses should move quickly to meet the 2027 commercial deadline.
Energy-SBC has served Orange, San Diego, Los Angeles, Riverside and San Bernardino Counties since 2014. Contact us or call (949) 324-3590 for a free consultation, and we’ll help you sort out what applies to your home or business.
This article is general information, not tax or legal advice. Tax credit eligibility depends on your situation, so please confirm with a qualified tax professional. Information is current as of November 2026.