Solar & Battery Payback Without 30% Tax Rebate (ITC)
- Amy Atchley
- Mar 15
- 4 min read
Updated: Mar 16
For those of you concerned about the Big Beautiful Bill’s repeal of the 30% tax credit and its effect on solar, I’m here to tell you it’s okay!
Firstly, I’m excited to share with you that solar energy is the cheapest form of energy that we’ve ever had on the planet. It’s exciting!
A Brief History of Solar
In 2005, Solar Panels cost $4.50/W, globally they now cost about $0.11/W. Government incentives, like the ITC were meant to accelerate the growth of Zero Carbon Energy. And we have arrived!
Here’s what that means for you…
Solar Power
Amortized over the life of your solar system, solar energy costs you about $0.08/kWh. You currently pay PG&E around $0.43/kWh. PG&E’s rates have increased 100% in the past 10 years and will continue to rise.
Home Battery
Amortized over the life of your battery, you are paying about $0.25/kWh (plus the cost of how the energy got in there in the first place- so +$0.08 if you are filling it with solar and +$0.43 if you are filling it with PGE’s energy.
Side-by-Side: Traditional vs. Solar Energy
● Solar Energy (lifetime cost): ~$0.08 per kWh
● PGE current average cost: ~$0.43 per kWh
PGE rates have doubled in the last 10 years and continue to rise!
Battery Cost Breakdown
Battery energy cost (amortized): ~$0.25 per kWh
If charged by solar: $0.25+$0.08= ~$0.33 per kWh
Assumptions in these calcs:
Current solar technology lasts, 35+ years, but here we assumed 25 since most people re-roof every 25 years.
Battery calcs assume 10,000 cycles because people use their batteries in different ways. Some are optimizing for payback, some optimize for power outages, and some optimize to use their own energy.
Export Credit Under “NEM 3.0”
Under PG&E’s current net billing rules (NEM 3.0), they compensate you an average of $0.06/kWh for the energy you export to the grid.(Again, you pay +/-$0.43/kWh)
As a result, you save a lot of money by using your own energy, during the day (directly) and at night (by adding a battery).
Value of Self-Consumption + Storage
Using stored power during peak-rate hours (when PG&E rates are highest) yields strong savings.
Using your highest usage items (EVs, dryers, etc.) during times when you can use your own energy can save you a lot of money
Under the new terms with PG&E (called NBT or Net Billing Tariff, AKA NEM3), you can sell your battery power back to the grid during high demands hours for as much as $2-$3/kWh! This means in a hot September, you could make about $1,000 in the month!
Payback Periods (Without Federal Tax Credit)
For solar only and without the 30% tax credit, payback is about 9-11 years.
For solar and battery, without the 30% tax credit, payback is also about 9-11 years depending on your system size and usage.
State and Local Incentives Still Help
California residents may qualify for the Self-Generation Incentive Program (SGIP), which offers rebates for storage. Namely, if your income is 80% median or below, you probably qualify for this incredible program, it basically pays for your whole solar and battery system. Here’s the current graph of median income for Santa Rosa Solar and Battery:
Please call us for more information. Or check out the SGIP information on the CPUC’s site.
Resources
Check with your County Energy program, Sonoma Clean Power, or Marin Clean Power to learn more about incentives they offer.
Electricity Rate Escalation
PG&E electricity rates are projected to continue rising (or have significant volatility), which increases the value of “buying” less from the grid via self-generation and storage. (SolarTech)
The “avoided cost” of grid electricity (through self-consumption) becomes more attractive as rates go up, improving ROI for solar + batteries.
What is The Payback Period for Solar and Battery Now?
Quick summary
Estimated payback WITHOUT the federal ITC: ≈ 9-11 years
Model assumptions
Solar System: 6.5 kW. Assumed installed cost $2.9/W → $18,850
Battery: Tesla Powerwall–style 13.5 kWh, installed cost: $15,400.
Gross installed cost (solar + battery): $34,250.
SGIP / PG&E battery rebate — assumed 15% of battery cost (PG&E states the general market residential rebate is ~15% of battery cost). Applied to battery only. SGIP availability/levels vary by eligibility. SGIP rebate ≈ $2,310 in this example. (PG&E)
With battery (80% self-consumption): ≈ $3,303/yr savings
@ PG&E average retail rate: $0.4465 / kWh
$31,940 / $3,303 = ~9.7 years
What This Shows
With PG&E’s high retail rates, self-consumption is very valuable — that’s why a battery that shifts solar from midday to expensive evening hours materially shortens payback compared to solar-only where exports are paid only a few cents.
Without the ITC, payback moves into the ~8–11 year range for typical California installs with a battery (my model returned ~11.1 years with the chosen assumptions).
SGIP helps but typically doesn’t replace the value of the ITC — it trims battery cost and helps the battery ROI but won’t fully eliminate the difference. (cpuc.ca.gov)
Want This Tailored to Your Home?
Even without the 30% Federal ITC, solar and battery systems are still an incredibly wise investment.
Want to see how these savings can work for your home? Contact Amy’s Roofing & Solar! We can run a model with your actual data, send us an inquiry online now or give us a call at 707-981-9801.
