Should You Wait to Go Solar in 2026 or Act Now? | Market Analysis

You spent the second half of 2025 watching the solar installation frenzy from the sidelines. Installers weren't returning calls. The ones who did respond quoted 6-8 month timelines. Prices seemed high. You figured you'd wait until things calmed down.

Now it's 2026, and you're wondering: did waiting pay off? Or are you just watching your SCE bill climb while everyone else locks in savings?

Here's what's actually happening in the Southern California solar market right now—and whether it makes sense to keep waiting or finally pull the trigger.

The 2025 Solar Rush: What Actually Happened

The final months of 2025 were chaotic for solar installers. Homeowners scrambled to capture the 30% federal tax credit before it expired on December 31st. Bay Area installers stopped responding to new leads. Southern California companies were booked solid through year-end.

If you tried to get solar in August or September, you probably experienced this firsthand. Small local installers recommended by friends had waitlists stretching into 2026. National companies were quoting installations for February or March at the earliest. The desperation was real.

But here's what happened: most of those installations didn't make the deadline anyway. The "install frenzy" was more like an appointment frenzy. Actual installations got pushed into early 2026 for most homeowners who signed contracts in the fall.

What Changed on January 1st

The federal solar tax credit expired. That 30% discount everyone was chasing? Gone for new cash purchases and solar loans. The immediate effect was predictable: demand dropped sharply.

Installers who were turning away customers in November suddenly have open calendars in January and February. The pressure is off. The question is whether that's good news for you or just a temporary lull before the next wave.

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Can You Still Save Money Without the Tax Credit?

This is the question everyone's asking. If the 30% tax credit is gone, does solar still pencil out financially?

Short answer: yes, absolutely. Here's why.

The Math Still Works in Southern California

The federal tax credit was a significant boost, but it was never the primary driver of solar savings. Your real savings come from avoiding SCE's rising electricity rates year after year. As of January 2026, SCE's average residential rate sits at 34.5 cents per kilowatt-hour. Peak time-of-use rates can hit 58 cents per kWh or higher.

That's not a typo. You're paying nearly 60 cents for every kilowatt-hour you use during peak hours (typically 4-9 PM when you're actually home). The average Southern California household now pays $200-240 per month for electricity—and that number climbs 3-5% annually.

Solar panels generate electricity at a fixed cost. Once your system is installed, your cost per kilowatt-hour is locked in for 25+ years. SCE can't raise your rates. You're immune to the annual price hikes that are draining your neighbors' bank accounts.

The Savings Timeline

Without the tax credit, your payback period extends by about 2-3 years. Instead of breaking even in 5-6 years, you're looking at 7-9 years. But you're still saving money for the next 16-18 years after that. Learn more about solar ROI without the tax credit to see the full financial breakdown.

Over 25 years, the average Southern California homeowner saves $110,000-135,000 on electricity costs even without the federal tax credit. That's real money staying in your pocket instead of going to the utility company.

Why SCE Rates Make Waiting More Expensive Every Month

Every month you wait is another month of paying full retail rates to SCE. Let's be specific about what that costs you.

If your monthly bill is $220 (slightly below the Southern California average), you're paying $2,640 per year to SCE. If rates increase by just 4% annually—conservative by recent standards—that's an additional $105 the first year, $109 the second year, and so on.

Over a 5-year waiting period, you'd pay roughly $14,200 to SCE while watching rates climb. If you'd installed solar in year one, most of that money would have stayed in your bank account.

The Rate Increase Pattern

SCE rates have increased 14 times since 2020, with only 4 decreases during that span. The average homeowner saw bills jump by $80 per month—$960 per year—just from rate increases. This isn't speculation. It's documented history. Here's why electricity bills are so high in Southern California and what's driving these increases.

The utility company has to fund wildfire mitigation, grid upgrades, and infrastructure maintenance. All of that gets passed directly to ratepayers. The trend isn't reversing anytime soon.

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Will Prices Drop Further If You Wait?

This is the gambler's question. Maybe solar panel prices will keep falling. Maybe installers will get desperate and slash prices. Maybe material costs will stabilize and competition will drive quotes lower.

Maybe. But probably not in a way that benefits you.

What's Driving Solar Costs in 2026

Material costs are volatile right now, primarily due to tariff uncertainty. Some components are cheaper than they were in 2024. Others are more expensive. The net effect is that total system costs have remained relatively stable—around $2.50-3.45 per watt in California.

That could change if tariffs increase on imported components. It could also change if domestic manufacturing ramps up and economies of scale kick in. The problem is you can't predict which direction things will move.

The Waiting Game Rarely Pays Off

Let's say you wait another year hoping for a 10% price drop. That would save you roughly $2,000-2,500 on a typical residential system. Sounds good, right?

Except you'd pay $2,640 to SCE during that year while waiting. And rates would increase during that time, so your second-year utility bill would be even higher. The math doesn't work in your favor. Find out if solar prices will drop in 2026 and whether waiting makes financial sense.

Solar equipment costs have dropped 53% over the past decade in California. But they've stabilized in recent years. You're not looking at 20% annual price drops anymore. You're looking at marginal fluctuations that get erased by a single year of utility payments.

NEM 3.0 Changed Everything: Why Batteries Are Essential Now

If you're comparing notes with friends who installed solar in 2019 or 2020, their experience won't match yours. California's net metering rules changed dramatically with NEM 3.0, which went into effect in April 2023.

Under the old system (NEM 2.0), excess solar energy you exported to the grid was credited at full retail rates. If you generated a kilowatt-hour during the day and used it at night, you paid nothing. It was basically one-to-one credit.

NEM 3.0 slashed export credits to about 25% of retail rates. That changes the economics significantly.

Why Everyone's Talking About Batteries Now

With lower export credits, it no longer makes financial sense to just send excess solar power to the grid. You want to store it in a battery and use it during peak hours when electricity is most expensive.

This is why battery storage has become the default recommendation for Southern California solar installations. It's not optional if you want to maximize savings under NEM 3.0.

The Battery Investment

Yes, adding battery storage increases your upfront cost—typically $10,000-15,000 depending on capacity. But it also increases your savings by allowing you to avoid peak-rate electricity entirely. You charge the battery with solar during the day, then discharge it during expensive evening hours. Discover how solar batteries can maximize your savings under NEM 3.0.

The payback period on solar + battery systems is still competitive, usually 8-10 years. After that, you're saving $150-200 per month compared to grid-only electricity.

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The PPA Trap: What Reddit Users Wish They Knew

With the tax credit gone, more installers are pushing Power Purchase Agreements (PPAs) as a workaround. The sales pitch sounds appealing: no money down, immediate savings, and you get to "buy out" the system after 5-6 years.

But the devil is in the details, and Reddit is full of horror stories from homeowners who didn't read the fine print.

How PPAs Actually Work

In a PPA, a third-party company owns the solar system on your roof. They claim the tax credit (which still applies to them). You pay them for the electricity the panels generate, typically at a rate lower than SCE's current retail rate.

After 5-6 years, they offer to sell you the system for "fair market value." This is where things get ugly.

The "Fair Market Value" Problem

Many PPA contracts don't define fair market value or cap the buyout price. The company can determine the price unilaterally. Homeowners have reported buyout quotes of $15,000-25,000 for systems that would have cost $12,000-18,000 to purchase outright originally.

Some contracts include escalators—annual increases to your electricity rate—that eat away at your savings. Others make it nearly impossible to sell your home because buyers don't want to assume the PPA agreement.

When PPAs Make Sense (Rarely)

There are legitimate PPA structures with defined buyout prices (like $1 after 5 years) and no escalators. But they're rare. Most homeowners are better off with a solar loan or cash purchase, even without the tax credit. Learn more about whether you should buy or lease your solar panels to understand the financial implications.

If an installer is pushing a PPA hard, read the contract with a lawyer before signing. Ask specifically about the buyout calculation and whether you have the right to refuse the buyout and keep paying for electricity indefinitely.

How to Find Responsive Installers in 2026

One of the biggest frustrations from the 2025 rush was installer responsiveness. Small companies were overwhelmed. National companies were focused on closing deals for year-end installations, not quoting new projects for 2026.

The good news: installers have bandwidth now. The bad news: you still need to separate the good companies from the ones that will ghost you after signing a contract.

What to Look for in 2026

CSLB licensing with zero complaints. California requires solar installers to hold a C-10 or C-46 license. Check the license status and complaint history on the CSLB website. Zero complaints over multiple years is a green flag.

Length of time in business. Companies that have survived 10+ years in the solar industry have proven they can handle installations, warranty claims, and customer service over the long haul. Startups fold. Established companies stick around.

Transparent pricing with no hidden fees. If the quote doesn't include itemized costs for equipment, labor, permits, and interconnection, ask for a breakdown. Reputable companies provide detailed quotes.

Red Flags to Avoid

High-pressure sales tactics are a massive red flag. Any installer who says you need to "decide today" or "this price is only good for 24 hours" is trying to manipulate you. Walk away.

Vague answers about equipment brands, warranties, or installation timelines are also concerning. You should know exactly what panels and inverters you're getting, what warranties cover them, and how long installation will take. Read our guide on how to choose a solar company in Los Angeles for a complete vetting checklist.

How US Power Installs Faster Than Competitors

Here's what makes US Power different in the 2026 market: we're exclusive QCells partners with factory-direct pricing and a streamlined installation process that gets you online in 3-6 weeks from approval—not 6-8 months.

Why Installation Speed Matters

Every week your system isn't operational is another week of paying full retail rates to SCE. If an installer quotes you an 8-week timeline and actually takes 20 weeks (common in 2025), that's 3 extra months of utility bills.

US Power's process is designed for speed without cutting corners. CSLB-licensed consultants handle permitting. Factory-direct relationships with QCells eliminate supply chain delays. Experienced installation crews complete jobs efficiently.

The 25-Year Warranty Difference

Most installers offer separate warranties: 25 years on panels from the manufacturer, 10 years on workmanship from the installer, maybe 10 years on performance guarantees. US Power bundles everything into a 25-year comprehensive warranty covering panels, workmanship, and performance.

That matters when something goes wrong in year 12. You're not dealing with finger-pointing between the panel manufacturer and the installation company. US Power owns the entire warranty. See our complete solar installation timeline explained from consultation to activation.

What to Watch Out for When Shopping Now

The post-rush solar market in 2026 is calmer than late 2025, but that doesn't mean you should let your guard down. Here are the specific risks to watch for as you compare quotes.

Lowball Quotes with Inferior Equipment

Some installers will quote ultra-low prices using bottom-tier panels and inverters. The system might work for 5-7 years, then start degrading rapidly. By year 10, you're generating 25% less power than expected and facing expensive replacement costs.

Always ask what specific panel brand and model is included in the quote. Research the warranty terms. Tier 1 panels from companies like QCells cost more upfront but save money over 25 years.

Oversized or Undersized Systems

Some sales reps size systems to maximize their commission, not to match your actual electricity usage. An oversized system costs more than necessary. An undersized system won't offset enough of your bill to deliver meaningful savings.

Your system should be sized based on your historical electricity usage (check 12 months of SCE bills) and adjusted for any major changes like adding an EV or heat pump.

Predatory Contract Terms

Read every line of the installation contract. Look for automatic escalators, hidden fees for permit delays, vague performance guarantees, or clauses that allow the company to change equipment without your approval.

If the contract includes language like "subject to change based on availability," push back. You should know exactly what you're getting before signing. Watch for these 5 red flags when choosing a solar company in California to protect yourself from predatory practices.

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The Bottom Line: Waiting Costs You Money

You didn't miss the boat by skipping the 2025 rush. But you're not saving money by waiting in 2026 either.

Every month you delay is another $200-240 going to SCE instead of staying in your bank account. Over a year, that's nearly $3,000. Over five years, it's $15,000+—and that's before accounting for rate increases.

Solar makes financial sense in Southern California with or without the federal tax credit. The panels pay for themselves in 7-9 years, then generate 16-18 years of pure savings. Battery storage maximizes those savings under NEM 3.0 by letting you avoid peak-rate electricity entirely.

The installers who were overbooked in 2025 have bandwidth now. That means faster timelines, more competitive pricing, and better customer service. But it won't last forever. As utility rates climb and word spreads about the post-tax-credit economics, demand will rebound.

The question isn't whether solar makes sense in 2026. It's whether you're going to keep paying SCE's rising rates or take control of your energy costs.

Ready to explore your options? US Power offers free consultations (virtual or on-site) with CSLB-licensed consultants. No pressure, no hidden fees—just transparent pricing and honest answers about what solar can do for your specific home. Get started today.