With electricity rates from Pacific Gas & Electric (PG&E) among the highest in the country, many Monterey homeowners are looking for ways to reduce their monthly bills. Rooftop solar is a powerful tool, but the rules have changed. In 2026, the key to maximizing your solar investment isn't just about how much power you generate—it's about how much of that power you use yourself.
Under the current utility structure, sending excess solar energy back to the grid provides less financial credit than it used to. This shift makes understanding self-consumption and battery storage more important than ever for controlling your energy costs.
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Open calculatorBenchmark Cost Analysis
Solar & Battery System Costs in Monterey (2026)
The following are modeled estimates for a typical 7.1 kW system designed to offset a significant portion of a local household's electricity bill. Since the 30% federal tax credit is no longer available for systems installed in 2026, the gross cost is the net cost.
- Solar-Only System (7.1 kW): The estimated cost is around $18,105.
- Solar + Battery System (7.1 kW panels, 10 kWh battery): The estimated cost is approximately $33,105.
Adding a battery increases the upfront investment, but it is specifically designed to increase your annual savings under PG&E's current export rules.
Incentives & Tax Credits
California Solar Incentives for 2026
While the long-standing 30% federal residential clean energy credit is not available for systems placed in service in 2026, California homeowners still benefit from important state-level policies:
- Property Tax Exclusion: Under California law, the value added to your home by a qualifying solar energy system is excluded from your property tax assessment. This means you get the benefit of a home improvement without the corresponding tax increase.
- High Rate Avoidance: The primary financial incentive is avoiding PG&E's high retail electricity rates. The more of your own solar you can use, the more you save.
Beyond the direct bill savings, an owned solar system can also be a strong selling point for future buyers, potentially supporting your home's resale appeal.
Net Metering: Pacific Gas & Electric Co
Net Billing (low export)
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How PG&E's Net Billing Affects Your Solar Savings
Monterey homeowners with new solar systems operate under a program called Net Billing Tariff (NBT). It's different from older net metering programs. In simple terms:
- Electricity you buy from PG&E is expensive, especially during peak evening hours.
- Excess solar electricity you send to the grid is credited at a much lower rate, based on its wholesale value, which changes throughout the day and year.
This structure creates a clear financial incentive to store your excess solar energy in a battery and use it yourself later. By doing so, you avoid selling your valuable solar power to the grid for a low credit and then buying expensive power back just a few hours later.
Projected Savings
Modeled Annual Savings: Solar vs. Solar + Battery
High electricity prices mean that every kilowatt-hour you generate and use at home is incredibly valuable. The difference in savings between a solar-only system and one with a battery comes down to how much of that valuable energy you can keep for yourself.
- A solar-only system is modeled to save an estimated $1,970 per year, with a payback period of about 8.3 years. It primarily offsets your energy use during the day.
- A solar and battery system increases those savings to an estimated $2,921 per year, with a payback period of around 9.2 years. The battery stores your excess daytime solar power so you can use it during the evening, avoiding both low-value exports and high-cost grid electricity.
If grid electricity from PG&E becomes more expensive over time, rooftop generation can offset costlier power in future years, making the long-term value even greater.