The federal credit no longer reaches a purchaser
The 30 percent Residential Clean Energy Credit under Section 25D expired for property placed in service after December 31, 2025. A purchase made now does not receive it, and a quote that still applies it is overstating your return substantially.
Section 48E, the commercial Clean Electricity Investment Credit, survives at 30 percent and is available to third-party owners of residential systems under leases and power purchase agreements. The credit exists, it simply no longer flows to a homeowner who buys.
That is a genuine change in the relative position of the options, and lease providers are not wrong to raise it. The question is how much of that value actually reaches you in the rate you are offered, which is a different question entirely.
Ask any such provider two things in writing: what do you claim, and what of that value is reflected in my rate. Then confirm with a tax advisor rather than with the sales material, since the person explaining the tax treatment has an interest in your conclusion.
What each structure gives you and costs you
If you buy outright, you own the system, it is part of the house when you sell, and you carry the maintenance and the risk. If you finance with a loan you own it on the same terms, with the debt as a separate obligation that generally has to be settled at closing.
Under a lease or a power purchase agreement you do not own the array. A buyer of your home generally has to qualify for and assume the agreement, or you buy it out. Ask in writing what a transfer involves, what a buyer must qualify for, and what a buyout would cost, before signing rather than when you list.
Compare on total cost over the full term rather than on the monthly payment. Ask about any escalation rate if the payment rises over time, what maintenance is included, what happens at the end of the agreement, and what the exit terms are.
A payment that rises every year for twenty years is a very different product from a fixed one, and that difference does not show up in the first month, which is the number people compare.
Check the underlying assumptions either way
Since April 15, 2023, customers applying for interconnection have taken service on the net billing tariff pursuant to CPUC decision D.22-12-056, and exported electricity is paid at its value to the grid, determined by the Avoided Cost Calculator, rather than at the retail rate.
An optimistic export assumption inflates a lease projection just as easily as a purchase one. Ask each provider what export values and what self-consumption share their savings figure assumes, and check the export values against the published rates.
The utilities are required to publish uniform machine-readable spreadsheets containing the retail export compensation rates on their websites, so this is a checkable claim rather than a matter of trust.
Ask about storage separately, and about whether you might qualify for California's Self-Generation Incentive Program, which pays $850 per kilowatt hour under its Equity category and $1,000 per kilowatt-hour under Equity Resiliency for qualifying customers.
What changed federally, and the battery incentive that remains
The 30 percent federal Residential Clean Energy Credit under Section 25D expired for property placed in service after December 31, 2025. A cash or loan purchase made now receives no federal credit, and a quote that still applies it is overstating your return substantially. Check any projection line by line rather than trusting a summary figure.
Section 48E survives at 30 percent and is available to third-party owners of residential systems under leases and power purchase agreements. The credit still exists, it simply no longer flows to a homeowner who buys the system. Expect lease providers to lead with that, and ask what they claim and what of that value actually reaches you in the rate offered, then confirm with a tax advisor.
California's Self-Generation Incentive Program continues to provide incentives for battery storage installed on the customer's side of the meter, including systems that can function during a power outage. Its Equity and Equity Resiliency categories are aimed at lower-income, medically vulnerable and at-risk for fire communities.
Depending on the category a customer qualifies for, the incentive is $850 per kilowatt hour under Equity or $1,000 per kilowatt-hour under Equity Resiliency. Applicants have one year after reserving funds to meet programme requirements, which include enrollment in a qualified Demand Response program, and further criteria are in the SGIP Handbook. Ask whether you might qualify and confirm with the programme rather than treating a sales answer as final.