Cut Solar Costs 40–60% in 2026: Why Structure Matters More Than Tax Credits
TL;DR: In 2026, solar can still save real money in California—but only when you control total project cost and design around PG&E peak-hour pricing. For many homes, the biggest financial lever is battery strategy that eliminates peak-hour grid usage, not exporting extra solar.
In 2026, solar savings don’t come from “hoping incentives save the deal.” They come from structure.
I completed my solar installation in 2025. The approach I used is even more important in 2026 because incentives and program details can change, and even when credits exist, they don’t fix the biggest problem: bundled installer markups.
Many homeowners assume solar is no longer affordable because they’re shown bundled, full-service installer quotes—often $60,000 to $90,000 for a typical residential system. Those numbers create the impression that solar “stopped working.” It didn’t.
To make this concrete: in my case, a full-service quote for a comparable solar-plus-battery scope came in around $78,000. By separating equipment purchasing from installation labor and designing the system around peak-hour avoidance (instead of maximum export), my final out-of-pocket cost landed closer to $35,000 for a system that matched my household needs.
This article explains how solar costs are actually controlled, why most people overpay, and how homeowners can reduce total system cost by 40–60% without doing any hands-on electrical or technical work.
Why full-service solar installers are the biggest cost problem in 2026
The most expensive mistake homeowners make is assuming solar must be purchased as a single bundled product.
Full-service solar installers typically bundle equipment, installation labor, permitting, warranties, financing, sales commissions, marketing overhead, and profit margin at every layer.
Even when a tax credit exists, bundled pricing can still leave tens of thousands of dollars on the table—because the credit applies to an inflated base. If incentives shrink or rules change, that markup becomes painfully visible.
This is why two homes with similar energy needs can receive quotes that differ by tens of thousands of dollars.
The core strategy: separate equipment purchasing from installation labor
The single biggest shift that unlocks savings is separating what you buy from who installs it.
Instead of paying one company to sell, design, install, and finance everything, homeowners can:
- Purchase solar panels, batteries, and inverters directly from reputable suppliers
- Hire licensed local electricians strictly for installation labor
- Handle permits and PG&E interconnection as a homeowner
This is not “doing your own solar.” You are not wiring panels, mounting equipment, or programming inverters. You’re controlling procurement and project structure.
By removing bundled markups, homeowners often cut total system cost by 40–60%. In many cases, that savings can rival (or exceed) what incentives would have provided—without depending on policy staying constant.
Full-service solar vs. unbundled owner-builder model (typical cost structure)
| Cost component | Full-service installer (typical) | Unbundled owner-builder model (typical) |
|---|---|---|
| Equipment pricing | Markup often embedded (opaque) | Market / wholesale-like pricing (transparent) |
| Sales & overhead | Often $3,000–$7,000+ equivalent | $0 (no bundled sales layer) |
| Labor | Bundled / hard to isolate | Often $5,000–$10,000 (labor-only scope) |
| Design / permit docs | Bundled | Often $500–$1,000 via third-party drafting |
| Total project price (illustrative) | $60,000+ for many homes | $30,000–$35,000 for many comparable scopes |
Note: These are typical ranges to illustrate structure, not a quote. Actual pricing varies by system size, roof complexity, electrical upgrades, and local permitting requirements.
What “no technical hands-on work” actually means
This approach does require homeowner involvement—but not technical labor.
You do not need to install panels, wire batteries, configure inverters, troubleshoot electrical systems, or act as an electrician.
You typically do:
- Procure equipment
- Coordinate scheduling
- Submit permits as an owner-builder
- Complete PG&E interconnection paperwork
These are administrative and coordination tasks. All physical and electrical work is still performed by licensed professionals.
Why equipment branding matters less than most people think
Many homeowners are warned that buying equipment outside a full-service installer voids warranties or increases risk. This is often overstated.
Most reputable solar panels, inverters, and batteries carry manufacturer warranties independent of who installs them. What actually matters is warranty terms, serviceability, replacement availability, installer familiarity with the equipment, and long-term supplier viability.
The premium guide includes the complete equipment list I used, the exact websites I purchased from, and how to evaluate reliability and warranty risk without paying premium installer markups.
Why solar exports changed under NEM 3.0 (and who it applies to)
California’s net metering economics changed materially in April 2023 with the transition from NEM 2.0 to NEM 3.0.
If your system was approved before the April 2023 cutoff, you are generally grandfathered under older net metering rules for many years, and the export economics described below may not apply to you in the same way.
For new systems installed after that date, export compensation is dramatically lower—especially during midday hours when solar production is highest. Excess solar sent back to the grid is often valued far below retail electricity rates and does little to offset nighttime or winter usage.
This shift changes design priorities: export-heavy assumptions are far more likely to disappoint than designs focused on self-consumption and peak-hour avoidance.
Why batteries now drive the majority of savings for PG&E customers in California
Under PG&E time-of-use rate plans, peak electricity prices are often two to three times higher than off-peak rates. This means when electricity is used matters more than how much is produced.
In my own case, battery strategy—not additional solar panels—produced the majority of savings.
By correctly sizing and configuring the battery system, I was able to eliminate grid usage during PG&E peak hours (often 3 p.m. to 9 p.m. on common TOU structures). Removing peak-hour usage alone reduced my PG&E bill by roughly 50%.
This savings came without relying on summer overproduction or exporting excess solar back to the grid.
Why oversized solar systems often underperform financially
Oversized systems often generate excess summer production that exports at low value, fail to improve winter nighttime coverage, and increase upfront cost without proportional benefit.
In many parts of California—especially shaded or hilly areas—winter solar production is limited by sun angle, not panel count.
Right-sizing solar and focusing on battery-based peak avoidance consistently outperforms panel expansion in today’s rate environment.
Permitting and PG&E interconnection: easier than most people expect
In Contra Costa County, the permitting process in 2025 was primarily document-driven and safety-focused. My permit was approved quickly after plan submission, the permit cost was modest relative to overall system cost, and inspections were brief.
PG&E interconnection was completed online and did not delay system operation. The process required paperwork, but no technical expertise when submitted correctly.
The premium guide documents the timeline, common caveats, and step-by-step workflow for both permitting and interconnection so homeowners can avoid unnecessary delays.
Advanced Guides & Deep Dives
If you want the “how it actually works in real life” details—timelines, permitting friction, equipment choices, and cost-structure decisions—start with these two deeper guides:
Installing Solar in California: Timeline, Permits, Inverters, and Real Results (2026)
Best if you’re planning an owner-builder install and want the real permit + utility interconnection workflow, step-by-step.
Solar in 2026 Without Tax Credits: How to Control Cost, Avoid PG&E Peak Pricing, and Still Save Money
Best if you want the bigger picture on batteries, peak avoidance, and electrification (EVs, heat pumps, hot water) under PG&E time-of-use pricing.