Sacramento Solar in 2026: SMUD’s Rate, Not NEM 3.0

Sacramento sits at the north end of the Central Valley, where triple-digit summer afternoons drive heavy air-conditioning loads and rooftop solar has a long, sunny season to work with. What makes Sacramento different from Fresno, San Diego, or anywhere else in the state is the utility. Almost every home here is served by the Sacramento Municipal Utility District, or SMUD, a customer-owned public utility rather than an investor-owned one. That single fact changes the whole solar picture: because the California Public Utilities Commission does not set SMUD’s rates, Sacramento is not on NEM 3.0. SMUD runs its own solar billing program, prices power below the statewide average, and credits your exported solar at a flat rate you can actually plan around. This page covers what solar really costs in Sacramento, how SMUD’s Solar and Storage Rate works, which California incentives still apply in 2026, and how fast the city and county issue permits, so you can check your address in about a minute.

Why Sacramento is not on NEM 3.0, and what SMUD does instead

The most important thing to know about Sacramento solar is that the NEM 3.0 story you have read for the rest of California does not apply here. NEM 3.0, the Net Billing Tariff, was created by a California Public Utilities Commission decision and governs only the state’s investor-owned utilities: PG&E, Southern California Edison, and San Diego Gas & Electric. SMUD is a publicly owned, customer-owned municipal utility, and the CPUC does not regulate its rates or its solar program (SMUD, as of July 2026). So if you live in Sacramento and read that you will be paid tiny hour-by-hour avoided-cost rates for your exports under NEM 3.0, that is about the IOUs, not about you.

What governs Sacramento solar is SMUD’s own Solar and Storage Rate, or SSR. Any customer approved to connect a new solar or solar-plus-battery system on or after March 1, 2022 goes on the SSR (SMUD, as of July 2026). It is a net-billing-style rate: you buy the grid power you use at SMUD’s normal time-of-day retail price, and you are credited for the solar you export at a separate, published flat rate. As of June 1, 2026 that export credit is 9.6 cents per kWh, up from 7.4 cents, after a SMUD Board decision to raise it (SMUD, effective June 2026). If you already had solar interconnected with SMUD before March 1, 2022, you keep the older net metering terms until December 2030, as long as you do not materially enlarge the system. For how credit-based solar billing works in general, see our explainer on how net metering and net billing credit your solar exports, and for the statewide picture behind all of this, see our California solar guide.

How SMUD’s Solar and Storage Rate credits your exports

Under the SSR, the flat 9.6 cent export credit is the number that drives your solar math. When your panels make more than your home is using, the surplus flows to the grid and SMUD credits your account at 9.6 cents per kWh (SMUD, effective June 2026). When your home needs more than the panels are making, you buy that power back at SMUD’s time-of-day retail price. Because the price you pay to import is higher than the 9.6 cents you earn to export, the value of your system comes from using your own solar on site rather than selling it. This is the same core lesson as NEM 3.0, but the mechanics are simpler: one published flat credit you can plan around, not a shifting avoided-cost schedule.

This is also why a Sacramento solar bill can stay higher than you expect without a battery. SMUD’s time-of-day rate puts its most expensive hours in the summer 5 to 8 pm window, when solar output is already falling but home air conditioning is still running hard. If you export cheap midday power at 9.6 cents and then buy it back during that 37.65 cent summer weekday peak (SMUD 2026 Residential Rate Guide, as of January 2026), the gap works against you. A home battery closes that gap: it stores your midday solar and discharges it through the evening peak so you avoid buying the priciest grid power of the day. That time-of-day arbitrage, plus backup power during a summer heat event or outage, is where most of a Sacramento battery’s value comes from. For what storage costs, see our breakdown of what a home battery costs.

Why SMUD’s rates still make solar worth it in Sacramento

Solar pays in Sacramento because summer power is expensive exactly when you use the most of it. SMUD’s summer time-of-day peak runs about 37.65 cents per kWh on weekdays from 5 to 8 pm, with mid-peak near 21.39 cents and off-peak near 15.50 cents (SMUD 2026 Residential Rate Guide, as of January 2026). SMUD says those rates are among the lowest in California and more than 50 percent below neighboring PG&E’s (SMUD, as of 2026), a genuine Sacramento advantage: it is one of the more affordable large utilities in the state. The flip side is that cheaper power means a longer payback than the sky-high IOU territories, so the case for solar here leans on high summer air-conditioning use and on shifting your own solar into that expensive evening peak.

Sacramento’s sun turns that rate into real production. A 6 kW system is modeled at about 9,700 kWh a year in Sacramento, with nearby ZIP codes landing close to 9,600, on a live PVWatts run for the area (NREL PVWatts, as of July 2026). That is a strong yield, better than most of the country, thanks to long, clear Central Valley summers. It is still a model, not a measurement of your specific roof, so pitch, orientation, and shading from trees or a two-story neighbor will move your number up or down. Run your exact address on NREL’s free PVWatts calculator before you size a system, then judge it against how much of that power you can actually use on site under the SSR.

What a Sacramento solar system costs, with and without a battery

Here is our own estimate for a representative Sacramento home on SMUD’s Solar and Storage Rate. The table below is an original MySolarFY calculation, not a figure lifted from another site. It uses a 6 kW system producing about 9,700 kWh a year (the live PVWatts figure above), a blended SMUD retail value near 20 cents per kWh for the daytime power you use on site, the flat 9.6 cent SSR credit for power you export, and typical 2026 California cash pricing near $3.00 per watt installed, which is roughly $18,000 for the system and about $13,000 more for a 13 kWh battery. It assumes no federal tax credit, because the homeowner credit ended after December 31, 2025, and it is before any income-qualified program. Your real numbers depend on your roof, your usage, and your rate plan, so treat this as an estimate and get a written quote.

Scenario (6 kW, Sacramento, SMUD SSR)	Estimated cash cost, before incentives	How your solar is valued	Estimated first-year bill savings	Estimated simple payback
Solar only, no battery	About $18,000	Roughly half used on site at daytime retail (near 20 cents), half exported at the flat 9.6 cent SSR credit	About $1,400	About 13 years
Solar plus a battery (about 13 kWh)	About $31,000	Most solar stored and used through the 5 to 8 pm summer peak (near 37.65 cents), little low-value export	About $2,200	About 14 years, plus backup power and larger lifetime savings

How we derived first-year savings: we assume about 50 percent of your production is used on site without a battery, versus about 85 percent with a 13 kWh battery. On-site daytime use is valued near 20 cents per kWh, a usage-weighted blend of SMUD’s 2026 time-of-day rates (off-peak 15.50 cents, mid-peak 21.39 cents, summer peak 37.65 cents) across typical midday hours; battery-shifted use is valued near 25 cents because a battery moves a larger share of that energy into the 37.65 cent summer peak. Exports are credited at SMUD’s flat 9.6 cents. Your split depends on your usage pattern, your rate, and battery size.

Notice that payback is longer here than in the high-rate IOU markets, and that is the SMUD trade-off. Because SMUD power is cheaper, a solar-only system saves less per kilowatt-hour than the same system on PG&E or SDG&E, so it pays back more slowly. But SMUD’s flat 9.6 cent export credit is more generous and far more predictable than the single-digit avoided-cost exports the IOUs pay under NEM 3.0, and there is no shifting Net Billing Tariff to model. A battery does not shorten payback dramatically at today’s prices, but it captures far more of your solar’s value on the SSR, shields you from the 37.65 cent summer peak, and keeps the lights on during an outage, and its lifetime savings grow as rates rise. Income-qualified households can do considerably better than these figures through the state programs below. To weigh the long-run numbers, compare with our Fresno solar guide and our San Diego solar guide, where the higher IOU rates flip the math. Los Angeles is the other big California metro on a municipal utility instead of NEM 3.0, where LADWP's near-retail net metering makes the math look different again; see our Los Angeles solar guide.

Which California solar incentives still apply in Sacramento in 2026

California has no state solar income-tax credit, so the incentives that matter here are a property-tax break and two income-qualified programs. The table below shows what is active for a Sacramento homeowner in 2026 and what has ended, so you can plan around real programs rather than outdated ones. SMUD itself does not run a general residential solar rebate today, so the state programs are the ones to check.

Program	What it does	Status in 2026 for a Sacramento homeowner
California active solar property-tax exclusion	Excludes the added home value of a solar system from property tax reassessment	Active, but scheduled to sunset January 1, 2027; the system must be completed before then, and SB 710 (2025) kept that date rather than extending it (California BOE, as of 2026)
DAC-SASH (Disadvantaged Communities Single-family Solar Homes)	Covers most or all of the cost of a rooftop system for income-qualified owner-occupants in disadvantaged-community census tracts	Currently accepting applications; eligibility is by census tract, and its funding source is at risk after mid-2026, so confirm availability before you rely on it (CPUC, as of 2026)
RSSE (Residential Solar and Storage Equity)	Income-qualified rebates toward solar paired with a home battery	Active in 2026 under a statewide budget, for eligible low-income households (CPUC, as of 2026)
General SGIP battery rebate	Broad battery storage rebate open to most customers	Wound down at the end of 2025; the income-qualified RSSE and DAC-SASH tracks are what continue (CPUC, as of 2026)
California state income-tax credit	A state credit against income tax	None; California has no personal income-tax credit for residential solar (DSIRE, as of 2026)
Federal Residential Clean Energy Credit (Section 25D)	The 30 percent federal homeowner tax credit	Ended for systems placed in service after December 31, 2025 (IRS, as of 2026)

Note: To find out whether your home is in a disadvantaged-community tract that qualifies for DAC-SASH, check your address in the state’s CalEnviroScreen tool. Eligibility is set tract by tract, so it is not automatic for the whole city, and the income-qualified programs also have household-income limits. Because DAC-SASH funding continuity past mid-2026 is uncertain, confirm the program is still open and funded before you count on it, and get any income-qualified offer in writing.

What the federal tax-credit change means for Sacramento homeowners

The federal homeowner credit is gone, and you should ignore any page or ad that still says otherwise. The 30 percent federal Residential Clean Energy Credit (Section 25D) ended for systems placed in service after December 31, 2025 under the One Big Beautiful Bill Act, so a Sacramento homeowner who completes an installation in 2026 with cash or a loan cannot claim it (IRS, as of 2026). You will still see search results and AI answers claiming the 30 percent credit runs through 2032; that is out of date for the homeowner credit, which already ended. What matters now is SMUD’s export credit, the property-tax exclusion, the income-qualified programs, and the bill savings from using your own power. For the full timeline, see what the federal solar tax credit change means in 2026.

One federal credit remains, but it is not the homeowner’s to claim. A separate commercial credit, Section 48E, can apply to the business that owns a leased or power-purchase-agreement system, not to the resident (IRS, as of 2026). On a lease or PPA you do not file for a federal credit yourself; the company that owns the panels does. The 25D homeowner credit, by contrast, ended after December 31, 2025.

How fast is solar permitting in Sacramento?

Fast, because both the City of Sacramento and Sacramento County use SolarAPP+ for instant residential solar permits. SolarAPP+ is an automated platform that checks a compliant residential solar or solar-plus-battery design against code and issues an approved permit right away, instead of waiting days or weeks for a manual plan review. The City of Sacramento offers residential solar permitting through SolarAPP+ (City of Sacramento, as of July 2026), and Sacramento County has adopted SolarAPP+ to streamline permitting in unincorporated areas (Sacramento County, as of July 2026). This also lines up with California’s SB 379 Instant Permit Law, which requires larger jurisdictions to offer automated online solar permitting. For you, that usually means a shorter timeline from signed contract to a running system, as long as your installer submits a standard, code-compliant design. Ask any installer whether they file through SolarAPP+ for your address.

Paying for solar in Sacramento: cash, loan, lease, or PPA

There is no single right way to pay for solar; the best fit depends on whether you want to own the system and capture the incentives yourself, or avoid an up-front cost. A lease or PPA can mean no up-front cost for eligible homeowners, but it is a long-term agreement with monthly payments, not free solar, and the system owner, not you, would claim any incentive that goes to the owner. The table compares the common paths at a high level. To think through it in more depth, see our primer on powering a California home with solar the right way.

Path	Up-front cost	Who owns the system and any owner incentives	Best when
Cash purchase	Full system cost	You, the owner	You want the fastest payback and the most lifetime savings
Solar loan	Little to none, financed	You, the owner	You want ownership without paying cash up front
Lease or PPA	$0-up-front where eligible	The third-party owner	You prefer no up-front cost and a simpler, fixed monthly bill

How to choose a solar installer in Sacramento

Sacramento has a deep, mature market of licensed solar companies, which is good for you because it means real competition on price and service. Rather than chasing a “top installer” list, screen any company against objective criteria:

• NABCEP certification, the industry’s professional standard for PV installers.
• A valid California Contractors State License Board (CSLB) license with the correct classification (C-46 solar or C-10 electrical).
• A clear workmanship and equipment warranty in writing.
• Real experience with SMUD interconnection, the Solar and Storage Rate, and Sacramento SolarAPP+ permitting, plus honest battery sizing for your summer evening usage.
• A written production estimate and a transparent quote built on SMUD’s actual export credit and time-of-day rates, not on IOU NEM 3.0 economics that do not apply here.

MySolarFY matches you with licensed installers that serve your area so you can compare real local quotes side by side, with no obligation. To see how we research and where our figures come from, read our data and methodology, and learn more about the MySolarFY editorial team.

Check which solar programs are available at your Sacramento address →

Frequently asked questions

Is Sacramento on NEM 3.0? No. NEM 3.0, the Net Billing Tariff, was set by the California Public Utilities Commission and applies only to the investor-owned utilities: PG&E, Southern California Edison, and San Diego Gas & Electric. Sacramento is served by SMUD, a customer-owned public utility that the CPUC does not regulate, so NEM 3.0 does not apply here (SMUD, as of July 2026). Instead, new Sacramento solar customers go on SMUD’s own Solar and Storage Rate. If you have read that California exports are paid at tiny hourly avoided-cost values, that is the IOU rule, not the SMUD one.

How much does SMUD pay for the solar I export? SMUD credits exported solar at a flat rate under its Solar and Storage Rate, currently 9.6 cents per kWh as of June 1, 2026, up from 7.4 cents after a SMUD Board decision (SMUD, effective June 2026). That flat, published credit is simpler to plan around than the shifting avoided-cost exports the IOUs pay under NEM 3.0. Because you buy grid power back at SMUD’s higher time-of-day retail rate, the value of your system still comes from using your own solar on site rather than exporting it, which is why many Sacramento homeowners add a battery.

Is solar worth it in Sacramento in 2026? For most owner-occupied Sacramento homes with decent sun, yes, though the payback is slower than in the high-rate IOU markets because SMUD power is cheaper. SMUD’s summer weekday peak runs about 37.65 cents per kWh (SMUD, as of January 2026), and a 6 kW system is modeled at about 9,700 kWh a year here on a live PVWatts run (NREL PVWatts, as of July 2026). The case is strongest for homes with heavy summer air conditioning, and it improves with a battery that shifts your solar into the expensive evening peak. Savings are not guaranteed and depend on your roof, usage, and how you pay.

Do I need a battery to go solar in Sacramento? You do not strictly need one, but it is what captures the most value on SMUD’s rate. Because exported power earns a flat 9.6 cents while the summer weekday 5 to 8 pm peak costs about 37.65 cents (SMUD, as of January 2026), a battery that stores midday solar and runs your home through that peak avoids the priciest grid power of the day. It also provides backup during a summer heat event or outage, which matters in the Central Valley. Solar without a battery still saves money at these rates, but storage is where the time-of-day value and the resilience come from.

Is there still a 30 percent solar tax credit in 2026? No. The 30 percent federal Residential Clean Energy Credit (Section 25D) ended for systems placed in service after December 31, 2025 under the One Big Beautiful Bill Act, so a Sacramento homeowner who installs in 2026 with cash or a loan cannot claim it (IRS, as of 2026). Some search results and even AI answers still say the 30 percent credit runs through 2032; that is out of date for the homeowner credit, which already ended. A separate commercial credit, Section 48E, is a business credit that only the company owning a leased or PPA system can claim, not the homeowner, and it does not revive the 25D homeowner credit, which ended after December 31, 2025.

Which incentives can a Sacramento homeowner still get? California has no state solar income-tax credit, so the active benefits in 2026 are the property-tax exclusion, which keeps your solar’s added value off your property tax but is scheduled to sunset January 1, 2027 (California BOE, as of 2026), and two income-qualified programs, DAC-SASH and RSSE, for eligible households in qualifying census tracts (CPUC, as of 2026). The broad SGIP battery rebate wound down at the end of 2025. Check your tract in CalEnviroScreen and your household income against the program limits, and confirm current funding, since DAC-SASH availability past mid-2026 is uncertain.

Can I get solar with no up-front cost in Sacramento? Some homeowners can, through a lease or power purchase agreement (PPA) where eligible, which can mean no out-of-pocket cost at installation in exchange for monthly payments. This is not free solar; it is a long-term agreement, typically 20 to 25 years, and total payments may exceed the cost of a cash purchase. On a lease or PPA the third-party owner, not you, owns the system and any incentive that goes to the owner, while your benefit is a lower or fixed power price. If you want to own the system and keep the property-tax exclusion and any income-qualified incentive yourself, a cash purchase or solar loan is the path that keeps them. Check what you qualify for before deciding.

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Reviewed by the MySolarFY editorial team on July 8, 2026. Figures were verified against the linked SMUD, CPUC, California BOE, DSIRE, IRS, EIA, City and County of Sacramento, and NREL PVWatts sources as of July 2026; SMUD’s export credit and time-of-day rates, the SGIP, RSSE, and DAC-SASH program terms, and the property-tax exclusion deadline can change, so confirm current terms with SMUD, the CPUC, and the City or County of Sacramento before you decide. MySolarFY does not provide tax or financial advice; consult a licensed professional about your own situation. Learn more about the MySolarFY editorial team and how we work.

MySolarFY is a free service that matches homeowners with licensed solar installers. We are not an installer, financing company, tax advisor, or government program, and we do not provide tax advice. The federal residential solar tax credit (Section 25D) ended for expenditures after December 31, 2025, and most homeowners who install in 2026 cannot claim it, so confirm your tax situation with a professional. “No up-front cost” refers to qualifying lease or PPA financing where eligible; these agreements typically run 20 to 25 years, may include an annual price escalator, and total payments may exceed the cost of a cash purchase; on a lease or PPA the system owner, not the homeowner, owns any incentive that goes to the owner. Solar panels are not free and monthly payments apply. Production, incentives, savings, and rates vary, change over time, and are not guaranteed. See our full disclaimer.