Is Solar Still Worth It in Valencia & Santa Clarita in 2026? A Local Cost Breakdown

Two big changes have hit California solar in the last year: the federal tax credit that used to knock 30% off a system's cost is gone for new purchases, and the rules for what your excess power is worth changed under NEM 3.0. If you're in Valencia or Santa Clarita weighing solar for the first time, or wondering if you waited too long, here's a straight answer based on where the numbers actually stand in 2026.

What Changed: The Federal Tax Credit

The Residential Clean Energy Credit (Section 25D), which let homeowners claim 30% of a solar system's cost against their federal taxes, was eliminated for systems placed in service after December 31, 2025, under the One Big Beautiful Bill Act signed in July 2025. If you're buying a system with cash or a loan in 2026, that federal credit is no longer part of the math. It's worth confirming with your provider whether a solar lease or power purchase agreement can indirectly pass along comparable savings, since those structures can still access a separate commercial tax credit.

What Changed: NEM 3.0

The other major shift is in what your utility pays you for power your system sends back to the grid. Under the old NEM 2.0 rules, exported power was credited at close to full retail rates, often $0.30 to $0.40 per kilowatt-hour. Under NEM 3.0, export credits are based on the utility's avoided cost, which is dramatically lower: typically $0.05 to $0.08 per kilowatt-hour during midday hours when solar production peaks, rising to roughly $0.18 to $0.24 per kilowatt-hour in the evening when demand is higher. That's a difference of about 75% compared to the old export rate structure, and it applies to essentially all new solar in Southern California Edison territory, which includes Valencia and Santa Clarita, going forward.

So, Is Solar Still Worth It?

The short answer: yes, for most homeowners, but the strategy has changed. Under NEM 3.0, the value of solar comes much more from powering your own home directly and storing excess production for evening use, rather than exporting it for a rebate-level credit. That makes the system design decision, and specifically whether to pair panels with a battery, more important to the actual payback math than it used to be.

The Case for Pairing Solar With Battery Storage

With midday export credits as low as $0.05 to $0.08 per kilowatt-hour, sending your peak solar production straight to the grid barely moves the needle on your bill. A battery lets you store that same midday production and use it in the evening, when SCE's own rates are highest, effectively capturing the value that used to come from net metering exports. For most Valencia and Santa Clarita homes going solar in 2026, a battery isn't a luxury add-on, it's the component that makes the system's payback timeline look closer to what homeowners were used to under NEM 2.0.

Why It Still Makes Sense Despite the Changes

• SCE electricity rates have continued to climb, which raises the value of every kilowatt-hour you generate and use yourself rather than buy from the grid.
• Solar plus battery insulates your household from future rate increases and time-of-use rate structures in a way that grid-only power doesn't.
• Neither Valencia nor Santa Clarita currently has dedicated local blog coverage on this topic despite being an active solar market, which tells you the conversation locally hasn't caught up with how much the math has actually shifted, it's still worth running your own numbers rather than assuming solar no longer pencils out.
• Financing structures, including leases and PPAs, can offset the loss of the federal purchase credit for homeowners who don't want to pay cash or take a loan.

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Getting an Honest Local Cost Estimate

Because export credits under NEM 3.0 vary by time of day and by month, a generic national solar calculator won't give you an accurate picture of what a Valencia or Santa Clarita system will actually save. The right way to evaluate solar now is a system design built around your household's actual usage pattern and a realistic battery sizing decision, not just a panel count.

FAQ

Is the 30% federal solar tax credit still available in Valencia in 2026?

Not for purchased systems. It ended for installations placed in service after December 31, 2025. Some lease or PPA options can pass along a comparable savings indirectly.

How much less do I get paid for exported solar power under NEM 3.0?

About 75% less than under NEM 2.0. Export credits now run roughly $0.05 to $0.08 per kilowatt-hour midday, versus the $0.30 to $0.40 per kilowatt-hour NEM 2.0 offered.

Do I need a battery to make solar worth it now?

Not strictly required, but it substantially improves the payback math under NEM 3.0 by letting you use your own midday production in the evening instead of exporting it for a low credit.

Has the NEM 3.0 change been finalized, or could it change again?

It's currently considered final. The California Supreme Court declined to review challenges to NEM 3.0 in June 2026, closing off the most likely path to a near-term reversal.

Ready to talk it through? Call Empower Home Services at 800-306-6953 or visit empoweryourhome.com to schedule a free consultation.