The federal homeowner solar tax credit ended after 2025, but Sacramento homeowners still have several reasons to run the numbers on solar and battery storage in 2026.
The financial calculation has changed.
Homeowners can no longer assume that the former 30% Residential Clean Energy Credit will reduce the cost of a newly installed homeowner-owned system.
At the same time, Sacramento has something that makes its solar market different from many other parts of California: SMUD.
Sacramento Municipal Utility District has its own solar export rules, residential rates and battery programs.
That means a Sacramento homeowner should not use a generic California solar calculator based on PG&E, Southern California Edison or San Diego Gas & Electric rules.
The correct question is not simply whether solar still works in California.
It is whether solar works for your Sacramento home, your utility, your electricity usage and your rate plan.
The 30% Federal Homeowner Solar Tax Credit Is No Longer Available for New 2026 Projects
For years, homeowner-owned residential solar was commonly evaluated after applying the federal Residential Clean Energy Credit under Section 25D.
That credit previously allowed qualifying homeowners to claim 30% of eligible residential clean-energy expenditures.
Federal law changed in 2025.
The Internal Revenue Service confirms that the Section 25D Residential Clean Energy Credit is not available for qualifying expenditures made after December 31, 2025.
Sacramento homeowners considering a system in 2026 should therefore evaluate the project without assuming the former 30% homeowner credit will be available.
NationPro USA explains this change in more detail in its California solar guide after the federal tax credit .
2026 planning rule: compare solar using the actual system price, projected electricity production, battery strategy, financing and utility rates rather than subtracting an expired 30% homeowner credit.
Sacramento Solar Is Different Because SMUD Is Different
One of the most important distinctions for Sacramento homeowners is the utility serving the property.
SMUD is a community-owned, not-for-profit electric utility.
It is not governed by the California Public Utilities Commission in the same way as California's large investor-owned utilities.
SMUD's Board establishes its rates and solar policies.
That means California's CPUC Net Billing Tariff, often called NEM 3.0, should not simply be applied to a SMUD customer.
SMUD uses its own Solar and Storage Rate.
SMUD Increased Its Solar Export Compensation in 2026
Sacramento solar customers received an important rate change on June 1, 2026.
SMUD increased its Solar and Storage Export Compensation Rate from 7.4 cents per kWh to 9.6 cents per kWh.
Customers on SMUD's Solar and Storage Rate can receive the 9.6-cent rate for eligible excess electricity sent back to SMUD, regardless of the time of day or season.
That export rate applies to electricity the home does not use or store.
Export compensation still should not be confused with the retail price a homeowner may pay when buying electricity from SMUD.
SMUD's Solar and Storage Rate vs. California NEM 3.0
| Topic | SMUD Customer | PG&E / SCE / SDG&E Customer |
|---|---|---|
| Solar billing framework | SMUD Solar and Storage Rate | California Net Billing Tariff |
| Rate authority | SMUD Board | California Public Utilities Commission |
| 2026 export structure | 9.6¢/kWh under SMUD SSR | Hourly export values under the Net Billing Tariff |
| Residential timing | SMUD Time-of-Day rate | Utility-specific Time-of-Use structure |
This is why a Sacramento homeowner should first identify the electric utility before applying general California solar advice.
How Much Does SMUD Electricity Cost in 2026?
SMUD's standard residential Time-of-Day rate changes according to the season and time of day.
During the 2026 summer season, from June 1 through September 30, the standard Time-of-Day rates are:
| Summer Time Period | Weekday Hours | 2026 Energy Rate |
|---|---|---|
| Off-Peak | Midnight – noon | 15.50¢/kWh |
| Mid-Peak | Noon – 5 p.m. | 21.39¢/kWh |
| Peak | 5 p.m. – 8 p.m. | 37.65¢/kWh |
| Mid-Peak | 8 p.m. – midnight | 21.39¢/kWh |
Weekends and designated holidays are off-peak.
During the non-summer months, SMUD's standard rate is lower, with off-peak electricity priced at 12.85 cents per kWh and weekday 5–8 p.m. peak electricity priced at 17.76 cents per kWh.
SMUD Rates Are Lower Than PG&E, and That Matters
It is important not to treat all California utility customers as if they face the same electricity costs.
SMUD says its rates are among the lowest in California.
Its June 2026 comparison for a residential customer using 750 kWh per month showed an average monthly bill of approximately $149 for SMUD compared with approximately $290 for PG&E.
Lower utility rates can mean the financial return from solar looks different for a SMUD customer than for a neighboring PG&E customer.
That does not mean solar cannot make sense.
It means the proposal should be based on the actual SMUD bill rather than a California statewide average.
Why Battery Storage Can Still Matter With SMUD
A battery can change when a household uses its solar electricity.
Solar panels normally produce the most electricity during daylight hours.
SMUD's highest standard summer electricity price occurs from 5 p.m. to 8 p.m. on weekdays, after solar production has already begun declining.
A battery can store part of the home's daytime solar production and make that electricity available later.
That can allow the homeowner to use stored energy during part of the evening instead of purchasing as much electricity at the applicable utility rate.
Battery storage can also provide backup power during certain outages when the system is designed and configured for backup operation.
NationPro USA explains battery planning in its home battery storage and solar guide .
SMUD Has a Battery Incentive in 2026
Sacramento homeowners considering battery storage should also review SMUD's My Energy Optimizer Partner+ program.
The program provides upfront enrollment incentives for qualifying new residential battery-storage customers who participate in SMUD's Solar and Storage Rate.
The incentive structure is changing in September 2026.
| Project Timing | Battery Incentive | Maximum |
|---|---|---|
| Interconnection submitted by Sept. 22, 2026 and program enrollment completed by Dec. 31, 2026 | $500/kWh less SMUD's 20% reserve calculation | Up to $10,000 per household |
| Interconnection submitted on or after Sept. 23, 2026 | $300/kWh less SMUD's 20% reserve calculation | Up to $6,000 per household |
Customers are also required to enroll within 90 days of receiving permission to operate from SMUD.
Eligible battery manufacturers currently include Tesla, Enphase, Franklin, SolarEdge, Sonnen and Eguana.
Incentive availability and program rules can change, so homeowners should verify the current program before making a purchase decision.
Sacramento solar in 2026 is not only about panels. The combination of SMUD's export rate, Time-of-Day pricing and battery incentives makes solar-plus-storage worth comparing as one home-energy system.
What Does a Tesla Powerwall Incentive Look Like Under SMUD?
SMUD's published 2026 incentive table lists qualifying 13.5 kWh Tesla battery configurations.
Under the higher incentive schedule for projects meeting the September 22 submission deadline, a qualifying 13.5 kWh Tesla battery is listed at approximately $5,400.
Under the reduced incentive schedule beginning with interconnection applications received September 23 or later, the same listed battery capacity is shown at approximately $3,240.
SMUD also currently provides quarterly payments for qualifying Tesla batteries participating in the program.
The exact payment, eligibility and battery configuration should be confirmed for the individual project before purchase.
Why Solar Self-Consumption Still Matters in Sacramento
Consider what happens to a kilowatt-hour produced by a rooftop solar system.
If the home uses that electricity immediately, the household may avoid purchasing a kilowatt-hour from the utility at the applicable retail rate.
If the electricity is not needed, it can be stored in a battery where available.
If it is neither used nor stored, a customer on SMUD's Solar and Storage Rate can export it under the applicable export-compensation rules.
Those three outcomes can have different financial values.
This is why a modern solar proposal should model when electricity is produced and consumed rather than only showing annual panel production.
Do Sacramento Homeowners Need a Battery?
No.
A battery should be evaluated based on the individual household.
Useful questions include:
- How much electricity does the home use between 5 p.m. and 8 p.m.?
- How much excess daytime solar would be available to charge a battery?
- Does the homeowner want outage backup?
- Which appliances need backup power?
- Does the homeowner qualify for a current SMUD battery incentive?
- What is the battery's installed cost after any verified incentive?
- How long does the homeowner expect to remain in the property?
Battery size should follow the home's usage and goals rather than being selected only because a larger unit may qualify for a larger incentive.
What About Sacramento Homes Served by PG&E?
Not every property in the broader Sacramento region is necessarily served by SMUD.
A homeowner should check the utility name shown on the electric bill before using SMUD rates or programs in a solar calculation.
PG&E customers operate under a different rate and solar-compensation structure.
NationPro USA's California electricity rates and solar guide covers PG&E and the other large investor-owned utilities in more detail.
5 Things Sacramento Homeowners Should Do Before Going Solar
1. Confirm the Utility
Determine whether the home is served by SMUD, PG&E or another provider.
Do not rely only on the city or ZIP code.
2. Review 12 Months of Electricity Usage
The system should be based on actual kilowatt-hour consumption, seasonal usage and future energy needs.
Future electric vehicles, heat pumps, pool equipment or home additions can change electricity consumption.
3. Look at When Electricity Is Used
SMUD's Time-of-Day structure means timing matters.
A household that uses large amounts of electricity from 5 p.m. to 8 p.m. may have a different battery calculation from a home where most usage occurs earlier in the day.
4. Compare Solar-Only With Solar Plus Battery
Ask for both scenarios when appropriate.
Compare system price, annual production, remaining grid purchases, battery capacity, available incentives and backup capability.
5. Do Not Use the Former 30% Homeowner Credit
A 2026 homeowner-owned solar proposal should not show the former Section 25D tax credit as money the homeowner will automatically receive.
Older marketing pages and calculators may still contain outdated tax-credit assumptions.
NationPro USA's homeowner solar checklist covers additional items to review before signing.
Compare the Long-Term Energy Cost, Not Just the Solar Price
The end of the federal homeowner tax credit raises the effective cost of purchasing solar compared with the old incentive structure.
Homeowners should acknowledge that directly.
But the system should still be compared with the alternative: continuing to purchase electricity from the utility over the years the homeowner expects to remain in the property.
A useful comparison includes:
- current annual electricity usage
- current SMUD or PG&E rate plan
- system price
- financing costs
- projected solar production
- solar used directly by the home
- expected solar exports
- battery operation
- verified utility incentives
- remaining utility purchases
- expected length of homeownership
Solar Monitoring Should Be Part of the Plan Too
The financial model assumes that the system continues producing electricity as designed.
That makes system monitoring useful after installation.
Production monitoring can help a homeowner track daily and monthly generation and identify unusual performance changes.
NationPro USA covers this topic in its guide to solar monitoring and production problems .
Does Solar Still Make Sense in Sacramento in 2026?
It can, but there is no one answer for every home.
SMUD customers benefit from electricity rates that are lower than many of California's investor-owned utilities.
That can change solar payback compared with PG&E territory.
At the same time, SMUD now pays 9.6 cents per kWh for qualifying Solar and Storage Rate exports, uses Time-of-Day pricing with a higher weekday evening rate and offers battery incentives that may reduce the cost of qualifying storage.
These factors create a Sacramento-specific solar calculation.
The homeowner should compare the actual utility bill with the actual solar and battery proposal rather than relying on statewide averages or old tax-credit calculations.
Sacramento Solar and SMUD FAQs
Is solar still worth it in Sacramento in 2026?
It can be for some homeowners. The result depends on whether the home is served by SMUD or PG&E, electricity usage, rate plan, system cost, solar production, battery configuration, financing and expected length of homeownership.
How much does SMUD pay for exported solar in 2026?
Effective June 1, 2026, SMUD's Solar and Storage Export Compensation Rate is 9.6 cents per kWh for qualifying excess electricity exported under the Solar and Storage Rate.
Does NEM 3.0 apply to SMUD?
No. SMUD is a community-owned utility and is not governed by the CPUC's investor-owned-utility solar tariff. SMUD uses its own Solar and Storage Rate.
What are SMUD's peak electricity hours?
Under SMUD's standard residential Time-of-Day rate, peak hours are weekdays from 5 p.m. to 8 p.m. Weekends and designated holidays are off-peak.
How much is SMUD's summer peak rate in 2026?
The standard summer Time-of-Day peak energy rate is 37.65 cents per kWh from 5 p.m. to 8 p.m. on weekdays during the June through September summer season.
Does SMUD offer a battery rebate in 2026?
SMUD's My Energy Optimizer Partner+ program provides qualifying battery customers with an upfront enrollment incentive. Projects submitted for interconnection by September 22, 2026 and enrolled by December 31 can qualify for the current incentive up to $10,000. Applications submitted on or after September 23 move to the new incentive of up to $6,000, subject to program requirements.
Can a battery help with SMUD Time-of-Day pricing?
A battery can store solar electricity during the day and make it available later. Depending on system settings and household usage, that may reduce the amount of grid electricity purchased during selected higher-priced periods.
Is the 30% federal homeowner solar tax credit still available in 2026?
No. The federal Section 25D Residential Clean Energy Credit is not available for qualifying expenditures made after December 31, 2025.
Is every Sacramento home served by SMUD?
No. Homeowners should confirm the electric utility shown on their current bill before using SMUD rates, solar rules or incentive calculations.
See What Solar Could Look Like for Your Sacramento Home
NationPro USA can review your SMUD or PG&E electricity usage, roof, rate plan, solar potential and battery options so you can compare the numbers using your home's actual energy profile.
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