California Has the Second-Highest Electricity Rates in the Nation: How Going Solar Can Help Homeowners Save Thousands

California homeowners continue to pay some of the highest electricity prices in the United States. New federal electricity data shows just how wide the gap has become between California and the national average.

For homeowners considering rooftop solar and battery storage, those electricity prices matter because the financial comparison is not simply the cost of installing solar.

It is also the cost of continuing to purchase electricity from the utility over the years the homeowner expects to remain in the property.

California Ranked Second for Residential Electricity Prices in 2025

U.S. Energy Information Administration data for 2025 shows California residential electricity averaging approximately 32.54 cents per kilowatt-hour.

The national residential average was approximately 17.30 cents per kWh.

Hawaii was the only state with a higher residential average.

This distinction matters.

The frequently cited 27.63-cent California figure is the average across residential, commercial, industrial and transportation customers.

For a homeowner, the residential figure of 32.54 cents per kWh is the more relevant statewide benchmark.

California Residential Electricity Remains Expensive in 2026

Preliminary EIA data for June 2026 placed California residential electricity at approximately 34.74 cents per kWh.

The U.S. residential average for June was approximately 18.34 cents per kWh.

These statewide figures combine many different utilities and rate structures, so an individual homeowner may pay more or less.

The actual bill depends on utility territory, rate plan, time of electricity use, household consumption and other charges.

What Are PG&E, SCE and SDG&E Customers Paying?

The California Public Advocates Office also tracks average residential rates for the state's three largest investor-owned utilities.

Its July 2026 report lists the following June 2026 average residential rates.

The ten-year comparison runs from January 2016 through June 2026.

NationPro USA covers the causes behind California's utility costs in why California electricity rates are so high .

Why the EIA and CPUC Numbers Are Different

Homeowners may notice that California's statewide EIA residential average does not exactly match the rates reported for PG&E, SCE and SDG&E.

That is expected.

EIA's statewide number combines electricity sales across utilities and energy providers throughout California.

The Public Advocates Office figures shown above are average bundled residential rates for PG&E, SCE and SDG&E and exclude the California Climate Credit.

They are different measurements and should not be treated as identical rate calculations.

Do Not Use a Generic 15.9¢ Solar Cost in Every Proposal

There is no single statewide price per kilowatt-hour for electricity generated by homeowner-owned rooftop solar.

A solar system's lifetime electricity cost depends on the actual project.

Factors can include:

• cash installation price
• financed system price
• interest and financing fees
• system size
• annual solar production
• panel degradation
• equipment life
• maintenance
• inverter or equipment replacement
• roof conditions

For that reason, homeowners should compare their own project cost and expected lifetime electricity production rather than relying on a generic statewide solar cost.

The Federal 30% Homeowner Solar Tax Credit Ended After 2025

Solar calculations also need to reflect another major 2026 change.

The former federal Residential Clean Energy Credit under Section 25D is no longer available for qualifying homeowner expenditures made after December 31, 2025.

The IRS also states that paying for a system before the deadline does not preserve the homeowner credit when the original installation is completed after December 31, 2025.

NationPro USA explains this change in its 2026 California solar tax-credit guide .

Any 2026 homeowner-owned solar proposal should therefore be reviewed without subtracting the former 30% credit.

High Utility Rates Do Not Automatically Make Every Solar Proposal a Good Deal

Expensive electricity makes solar worth comparing, but the utility rate alone does not determine whether a project makes financial sense.

Homeowners should review the full project.

System Price

Compare the cash price with the financed price and ask whether financing or dealer fees are included.

Annual Production

Review expected annual production in kilowatt-hours rather than judging a system only by panel count.

Electricity Usage

A proposal should be based on the home's actual electricity consumption and expected future loads.

Rate Plan

PG&E, SCE and SDG&E customers can face different Time-of-Use prices and billing structures.

Length of Homeownership

A homeowner who plans to remain in the property for many years has a different financial calculation from someone expecting to sell soon.

California's Net Billing Tariff Changes the Solar Calculation

New solar customers of PG&E, SCE and SDG&E generally take service under California's Net Billing Tariff, also called the Solar Billing Plan.

Solar electricity used directly inside the home can offset electricity that otherwise would have been purchased from the utility.

Excess solar exported to the grid receives an Energy Export Credit based on the calculated value of that electricity to the grid.

CPUC states that these export credits are usually below retail electricity rates, although credits can be higher during certain late-summer evening periods.

That makes the timing of solar production and household electricity use more relevant than under older retail net-metering structures.

Why Battery Storage Can Change the Result

Solar panels commonly generate the most electricity during daylight hours.

Many California households continue using large amounts of electricity after solar production begins to fall.

A battery can store some available daytime solar production and make that electricity available later.

Depending on the utility rate, battery settings and household usage, storage may help homeowners:

• use more of their solar electricity inside the home
• reduce selected evening grid purchases
• shift energy use across Time-of-Use periods
• store midday solar instead of immediately exporting it
• provide backup electricity when correctly configured

Learn more in NationPro USA's guide to solar and home battery storage .

High-Energy Homes Have More Utility Purchases to Review

Homes with higher electricity consumption can have more grid purchases that a correctly sized solar system may be able to offset.

Higher electricity use can come from:

• central air conditioning
• swimming pools
• electric vehicles
• electric heat pumps
• electric water heating
• large homes
• home offices
• other electrical equipment

Future loads should also be included before solar is sized.

A household planning to add an EV or heat pump may need more electricity in future years than its current utility bills show.

Do Not Assume Utility Rates Will Rise at the Same Rate Forever

Historical electricity-price increases can help homeowners understand what has happened, but they do not predict the future.

PG&E, SCE and SDG&E all had periods of rate reductions during 2026.

Future prices can rise, fall or remain relatively stable in individual periods.

If a solar proposal includes 20 or 25 years of projected savings, ask what annual utility-rate increase the proposal assumes.

Then review how the numbers change when a lower rate-increase assumption is used.

What California Homeowners Should Compare Before Going Solar

A useful 2026 comparison should include:

• 12 months of electricity consumption when available
• the homeowner's actual utility
• current rate plan
• Time-of-Use periods
• solar cash price
• financed price and APR
• expected annual solar production
• future EV or heat-pump electricity use
• battery cost and capacity
• expected remaining grid purchases
• roof condition
• expected length of homeownership

NationPro USA's guide to things to know before going solar covers additional questions homeowners can ask before signing.

California Electricity Rates and Solar FAQs

Does California have the second-highest electricity prices in the United States?

EIA data for 2025 shows California had the second-highest average residential electricity price among states at approximately 32.54 cents per kWh, behind Hawaii. California's all-sector average was 27.63 cents per kWh.

What was the U.S. average residential electricity price in 2025?

The national residential average was approximately 17.30 cents per kWh in 2025, compared with 32.54 cents per kWh in California.

What is California's residential electricity price in 2026?

Preliminary EIA data for June 2026 placed California's statewide residential average at approximately 34.74 cents per kWh. Actual household rates vary by utility, rate plan and electricity use.

How much are PG&E, SCE and SDG&E residential rates?

The California Public Advocates Office reported June 2026 average residential rates of approximately 33.7 cents per kWh for SCE, 34.4 cents for PG&E and 45.5 cents for SDG&E, excluding the California Climate Credit.

Is home solar electricity always 15.9 cents per kWh?

No. There is no single statewide home-solar electricity cost. The result depends on project price, financing, annual production, equipment life, maintenance and other system-specific assumptions.

Is the 30% federal homeowner solar credit available in 2026?

No. The federal Residential Clean Energy Credit under Section 25D is not available for qualifying expenditures made after December 31, 2025.

Why does battery storage matter under California's Solar Billing Plan?

Export credits under the Net Billing Tariff are usually below retail electricity rates. A battery can store some daytime solar production for later household use rather than immediately exporting all unused electricity.

Does solar eliminate the electric bill?

Not necessarily. Solar can reduce grid electricity purchases, but homeowners can still have imported electricity, fixed charges and other utility costs.