You’ve heard all the hype surrounding solar; you’ve probably heard of the substantial benefits and have already resolved that it’s the best choice for powering your home.
But the real question that’s nagging at you isn’t “is solar better?”—the question is “what is it going to cost me, and is it worth it in 2026?”
The honest answer is that a lot has changed in the last couple of years — especially the federal tax credit and how SDG&E credits your exported power. Skipping from site to site looking for a straight answer can get confusing fast, and a lot of it is out of date.
- where you live
- what season it is
- what size solar installation you’re running
- what type of solar panels you’re using
- whether you buy, finance, or lease
- whether you add battery storage
- how much electricity your household is consuming, and when
That’s a lot of variables to consider.
The good news: we’ve already run the numbers for a typical San Diego County home using current 2026 rates and current tax rules — not the numbers from a few years ago that most solar sites never bothered to update.
So instead of spending hours playing detective and mathematician, spend five minutes reading this to get a straight, current answer before you talk to anyone about a quote.
Chapter 1. The Real Investment
The Initial System Cost
Most San Diego County homes install somewhere between 6 kW and 10 kW of solar. For this example, we’ll use an
8 kW system — a size that comfortably covers a lot of local households.
As of 2026, solar in San Diego typically installs for about
$2.50 to $3.20 per watt before any financing, depending on your equipment and roof (
EnergySage,
SolarReviews). For an 8 kW system, that puts the up-front cost at roughly
$20,000 to $25,600.
That is a real number, and it should not include a 30% discount — here’s why.
Solar Incentives — What Changed in 2026
For years, this page (and every other solar site) told you to subtract 30% off your system cost for the federal tax credit.
That is no longer true if you buy or finance your system.
Congress ended the 30% federal residential solar tax credit (IRS Section 25D) for any system installed and placed in service after December 31, 2025, with no phase-down (
IRS, One Big Beautiful Bill Act). If you purchase or finance a system with cash or a loan in 2026, you get
$0 back from that federal credit — period.
There is one exception worth knowing about: ALIVE offers a
prepaid solar lease through Participate Energy for residential customers. Because Participate Energy — not you — owns the system in this structure, they can still claim the 30% federal commercial credit (Section 48E), and that value is built directly into the prepaid lease price. That’s how our prepaid lease customers get access to the same 30% value that a cash or loan purchase can no longer claim on its own. We’ll walk you through the real numbers on both paths — owning your system outright versus a prepaid lease — so you can see which one actually saves you more.
This isn’t tax advice — talk to your tax professional about your specific situation. But going into a solar conversation assuming a 30% discount that no longer exists for owned systems is the fastest way to get a number that doesn’t hold up.
What’s still true: financing options exist that let you make manageable monthly payments instead of paying $20,000–$25,600 up front. We’ll walk you through what that actually costs over time — not just the sticker price.
Chapter 2. The Real Savings
Now that we’ve established the honest cost, let’s look at the return — which has also changed.
Solar Energy
A San Diego rooftop typically produces around 1,600 kWh per kW installed, per year. For our 8 kW example, that’s roughly 12,800 kWh a year, or about 1,067 kWh a month. Higher-efficiency panels can push that 8–20% higher, at a higher up-front cost.
Utility Pricing in San Diego — It’s Not Tiers Anymore
The old “Tier 1 / Tier 2” pricing system this page used to describe is outdated. SDG&E has moved to time-of-use (TOU) pricing, meaning the price of electricity changes by the hour, not just by how much you use.
As of early 2026, SDG&E’s bundled residential rate averages about
45.7¢ to 46.4¢ per kWh — among the highest in the country, more than double the national average (
SDG&E rate alert, April 2026). But the real number that matters is what time of day you’re using power:
|
Approx. rate per kWh (2026) |
When |
| On-Peak |
$0.55 – $0.70 |
4pm – 9pm, every day |
| Off-Peak |
$0.35 – $0.48 |
Most other hours |
| Super Off-Peak |
$0.30 – $0.38 |
Late morning hours, seasonal |
That 4pm–9pm on-peak window is exactly when most families get home, cook dinner, and run the AC — and exactly when solar panels are producing the least. That single fact is why battery storage has become part of this conversation, not just an upsell.
NEM 3.0: Why Sending Power Back to the Grid Isn’t Worth What It Used to Be
This is the part most solar companies skip, and it matters. Since April 2023, California switched new solar customers from the old net metering rules to a system called
NEM 3.0 (officially the Net Billing Tariff). Under the old rules, extra power you sent back to the grid was credited at close to the full retail rate. Under NEM 3.0, that export credit averages only about
5¢ to 10¢ per kWh — a fraction of what you pay to buy power back (
SolarFY, SDG&E solar guide 2026).
In plain terms: the value isn’t in selling your extra power to SDG&E anymore — it’s in using it yourself, in real time, or storing it in a battery so you can use it during that expensive 4pm–9pm window instead of buying it back at peak price. That’s the honest math, and it’s why we talk about batteries as part of the savings conversation, not just backup power.
What This Actually Looks Like on a Bill
Here’s a real, published example for a 6 kW system with no battery under NEM 3.0: roughly $18,000 installed, with about half the solar power used immediately in the home (valued near the $0.44–$0.46 retail rate) and half exported (valued near 6¢ per kWh). That works out to around
$2,500 in savings the first year, and a payback period of roughly
7 years (
SolarFY, San Diego solar & NEM 3.0 math, 2026).
Scale that up toward our 8–10 kW example range, and savings generally land somewhere between
$2,500 and $5,000+ a year, depending on your system size and, increasingly, how much of that power you use yourself instead of exporting it. Adding a battery to shift your usage out of the 4pm–9pm peak window is usually the single biggest lever for improving that number.
A Tesla Powerwall from ALIVE runs about
$15,000 installed. Add one to an 8–10 kW system and your total up-front cost moves to roughly
$35,000–$40,600 before any incentive — though we also offer a basic solar-plus-Powerwall package starting at
$24,000 for homes that fit a smaller footprint; most of our customers land in the range above. Either way, adding a battery stretches out the simple payback compared to solar alone — but a battery is doing a different job than the panels: instead of exporting your extra power for 5–10¢ per kWh under NEM 3.0, you store it and use it yourself during the expensive 4pm–9pm window, and if the grid goes down, your home stays on. For most of our customers, that backup security is as much the reason to add a battery as the bill savings are.
We’re not going to pretend every home saves the same amount — anyone who tells you a fixed number before looking at your actual electric bill is guessing. That’s why every ALIVE quote starts with a real look at your usage, not a script.
Chapter 3. A Few More Considerations
A few things that change the math above, for better or worse:
Battery storage changes the equation more than it used to. Under the old net metering rules, exporting extra power was almost as good as using it yourself. Under NEM 3.0, it isn’t — so a battery that lets you use your own solar power during the expensive 4pm–9pm window, instead of buying it back from SDG&E, now has a much more direct payback than it did a few years ago.
Already have solar without a battery? You can still add a Powerwall. You don’t need to replace your existing panels to get the benefit of storage. Adding a Powerwall to a system you already own lets you take the same solar power you’re already producing and shift when you use it — instead of that power being exported the moment it’s generated at NEM 3.0’s low 5–10¢ per kWh credit, you store it and use it yourself during the expensive 4pm–9pm window. For a lot of existing solar customers, that’s the single biggest thing left to do to lower a bill that solar alone no longer solves the way it used to.
Financing still works, even without the federal tax credit. You don’t need to pay $20,000+ up front. We’ll walk you through real monthly numbers so you can compare financing a system you own against a lease or PPA — and we’ll tell you plainly which one actually saves you more over time.
Bigger systems still generally pay off faster per dollar spent, mainly because more of your own high-cost on-peak usage gets offset. But “bigger” only helps if it’s sized to your actual usage — oversizing just adds cost with diminishing return under NEM 3.0’s low export credit.
Panel efficiency still matters, but less than it did when the federal credit made every extra dollar of system cost 30% cheaper. Now the math has to work on its own.
Get Your Real Number — Not a Guess
ALIVE Solar & Roofing has completed 2,000+ installations across San Diego County. We’re Tesla Certified, rated 4.8 on Yelp and A+ with the BBB, and we’re a local, family-owned crew — no subcontractors, and we’re still here after the panels go up.
Get a free, honest look at what solar actually costs and saves for your specific home — current rates, current tax rules, no outdated math.
