The Federal Solar Tax Credit Is Gone — What Valencia Homeowners Can Still Claim in 2026

The 30% federal solar tax credit ended for spending after December 31, 2025. Homeowners who were going to “get to it next year” have found that out the hard way. The other half of the old story is your Southern California Edison bill, and here’s the honest update: the discount is gone, but the bill hasn’t gone anywhere.

Here’s what changed, what’s still available, and how to tell whether solar still pays off for a Valencia home.

What changed

The homeowner credit covered 30% of a system’s cost, batteries included. Without it, you pay the full price, which is about 43% more out of pocket than before (paying 100% instead of 70%). That doesn’t automatically kill the case for solar, but it changes the payback math.

What SCE customers are working with

SCE’s January 2026 rate change was a small decrease for a typical customer, about $5.51 less per month on a 500 kWh bill, which SCE put at roughly $187.56 a month. That’s a modest dip after years of higher rates, and the average bill is still a real number. SCE’s own filing also lists rate increases tied to its general rate case and wildfire-related costs, so what you see on your bill can keep moving.

How California’s export rules shape the payback

In California, solar customers on the current net billing rules are credited for the power they export at rates that vary by time of day, and those credits are generally much lower than the retail price of power. So the way a system pays off has changed. The savings come mostly from using your own solar as it’s made, and from using stored solar in the evening instead of buying power from the grid at peak prices.

That’s why the question isn’t just “how big is the system?” It’s “how much of what it makes will I use myself?”

What you can still use

• Leases and power purchase agreements. Under current federal rules, installers can claim a business credit on third-party-owned systems through 2027, and part of that value can show up in your payment. Learn more on our financing and leasing page.
• Financing. Turn a big upfront cost into a payment you can compare with your current bill.
• Battery value. Under California’s current export rules, solar exports don’t pay much, so using your own power in the evening, and having backup during a PSPS, is where storage earns its keep.

The Valencia twist: backup power

Valencia and the Santa Clarita Valley deal with wind season and the possibility of Public Safety Power Shutoffs. A solar system without a battery shuts off when the grid goes down, so if backup power matters to you, that’s a reason to price a battery alongside the panels. It’s a benefit that doesn’t show up in a payback chart but is real for many households.

Buy, finance or lease?

• Paying cash usually has the lowest total cost, if you have the funds and plan to stay in the home.
• Financing spreads the cost out, so compare the monthly payment with your current bill and check what the interest adds up to.
• Leasing or a PPA can reduce or remove the upfront cost, but you typically don’t own the system, so read the terms, including what happens if you sell.

So, does it still pay off?

For many Valencia homes with high summer bills, yes, though slower than it used to. It’s a tougher call for low-usage homes, shaded roofs, or plans to move soon. The variable that changes everything is your actual usage during evening hours, when time-of-use rates are highest. That’s why we build an estimate from your real bills, not a neighborhood average.

Questions to ask any solar company

1. What’s the total price with no credit, and what does each option include?
2. What export credit and rate plan did you assume for my SCE account?
3. How did you estimate my production, and what if the system underperforms?
4. If I finance or lease, what are the full terms, including what happens if I sell?
5. What would a battery change in my numbers, and what would it back up during a PSPS?

Common questions

Is solar still worth it after the credit ended? For many homes with high bills, yes, though payback is slower than before. It depends on your usage, especially in the evening.

Do I need a battery? Not always. But under California’s current export rules, batteries often improve the math, and they add backup power that matters during a PSPS.

Will my bill go to zero? Unlikely. Even with solar, you’ll usually have some charges. A better goal is a meaningfully lower bill.

What to bring to a solar consultation

• Your last 12 months of SCE bills
• Your current rate plan, if you know it
• A rough idea of anything you plan to add, like an EV or a pool
• Any questions about backup power or roof condition

See our solar and storage options and our Valencia page.

Get your free updated solar savings estimate. Call 800-306-6953 or visit empoweryourhome.com.