The rate you avoid is the whole argument
At around 39 cents per kWh, a Fremont household displacing its own consumption is avoiding one of the higher electricity prices in the United States. That is what makes the arithmetic work here even without the federal credit.
It is worth seeing how local that advantage is. Santa Clara, served by its own municipal utility, pays roughly 18 to 20 cents. Same weather, same sunshine, same hardware, and roughly half the value per generated kilowatt hour.
So be careful with any Bay Area figure that does not name the utility it assumed. A payback number borrowed from a neighbouring city can be describing a household whose electricity costs half as much as yours, or twice.
Ask your installer to state the rate and the rate plan the projection used, and check it against a recent bill. On a PG&E tariff with time-of-use pricing, the hour you consume matters as much as the amount.
What the Net Billing Tariff does to export value
PG&E is one of the three investor-owned utilities covered by the Net Billing Tariff, which took effect for new applications on 15 April 2023 and compensates exports using Avoided Cost Calculator values rather than retail rates.
The practical consequence is a wide gap between the value of a kilowatt hour you use and one you send out. Self-consumption avoids a purchase at around 39 cents; export earns a fraction of that.
That gap is the reason storage gets a serious look in PG&E territory in a way it does not in a municipal utility area with retail-rate crediting. A battery converts a low value export into a high value avoided purchase.
Ask for the system modelled with and without storage, with the self-consumption share stated in both cases. That share is the single assumption that moves a PG&E projection most, and it is the one most often left unstated.
Household load shape decides the return
Because export is worth so much less than avoided consumption, the value of your system depends heavily on when your household actually uses electricity rather than on how much it uses in a year.
A house that is empty through the working day and draws heavily from six in the evening captures little of its own midday generation. The same array on a house with someone home, or with an electric vehicle charging in daylight, performs considerably better.
Electric vehicle charging is the lever most Fremont households have. Shifting a charge from late evening to the middle of the day converts exported generation into avoided purchase, and it costs nothing but a schedule change.
Ask your installer to model your consumption hour by hour against expected production rather than netting annual totals. Annual netting hides exactly the effect that determines whether a PG&E project performs.
What is left in the incentive stack
The 30 percent Residential Clean Energy Credit under Section 25D expired for property placed in service after 31 December 2025, so a cash or loan purchase now receives no federal credit. Any Bay Area quote still applying it is overstating the return substantially.
Section 48E survives at 30 percent for third-party owners, so a lease or power purchase agreement provider may claim it and reflect part of that value in the rate offered. Ask them to show the comparison against a cash purchase rather than assert it.
The California Active Solar Energy System Exclusion keeps the added value of a qualifying system out of your property assessment, which is a state provision requiring no action from your utility.
The Self-Generation Incentive Program is the state mechanism that can help fund storage, and given how much storage matters under the Net Billing Tariff it is worth asking about specifically. Confirm current availability with the administering body rather than with sales material.