Does NEM 3.0 affect a solar prepaid lease in California?

Yes, but in a way that makes prepaid lease structures more attractive. Under NEM 3.0, California utilities reduced the export credit for power sent back to the grid by roughly 75%. That means self-consumption is now far more valuable than exporting excess production. Prepaid lease products like Propel and Participate are typically sized and paired with battery storage to maximize self-consumption, which aligns well with NEM 3.0's incentive structure.

What is the difference between Propel and Participate for California homeowners?

In Energy Community zip codes where the ITC adder brings the discount to 39.2%, Propel Financing typically prices out better because the larger discount reduces the financed amount substantially. In non-Energy Community zip codes where the base ITC rate of 30% applies, Participate Energy's Prepaid Lease, especially when paired with a Tesla Powerwall, often delivers better value. The right choice depends on your zip code, credit profile, and whether you want battery storage.

Which California utilities are most favorable for a prepaid solar lease?

SDG&E customers in San Diego County typically see the strongest case for a prepaid lease because the utility charges roughly $0.50 per kWh, among the highest residential rates in the country. PG&E customers at $0.45 per kWh also see strong economics. SCE territory at $0.40 per kWh still supports a compelling case. LADWP is excluded from the Propel and Participate programs.

Solar Prepaid Lease in California

Q: Does LADWP territory qualify for a prepaid solar lease?

No. Los Angeles Department of Water and Power customers are not eligible for Propel Financing or Participate Energy's Prepaid Lease through Solar-Advisors.org. If you are an LADWP customer, contact us and we can point you toward alternative options.

Q: Can I add battery storage to a California prepaid lease?

Yes. Both products offer battery storage options. Propel Financing can include Enphase IQ battery storage priced into the system cost. Participate Energy offers Tesla Powerwall as a battery-inclusive option, which is particularly valuable in non-EC zip codes where the Participate structure tends to price out better than Propel.

The California Case

Three Forces Making 2026 the Right Time in California

Most states have one factor pushing homeowners toward solar. California has three converging at the same time.

1

NEM 3.0 Changed the Math on Exporting

California's net metering overhaul cut export credits by roughly 75%. Sending power back to the grid now earns far less. That makes self-consumption the priority, which means a properly sized system with battery storage returns maximum value.

2

CA Utility Rates Are Among the Highest in the US

PG&E averages $0.45/kWh, SCE $0.40/kWh, and SDG&E $0.50/kWh. Those rates have increased roughly 6% per year on average over the past decade. Every dollar your solar system generates avoids a dollar of escalating utility cost.

3

The Residential ITC Expired End of 2025

Homeowners who finance solar directly with a bank loan can no longer claim the 30% federal credit on their taxes. Prepaid lease structures route through the commercial ITC, which is still active, and pass that value to you as a reduced system price.

The Key CA Decision

Propel or Participate: It Depends on Your Zip Code

Both products use the commercial ITC structure. The right choice depends on whether your home is in an IRS-designated Energy Community zip code, your credit profile, and whether you want a Tesla Powerwall.

Energy Community Zip Codes

Propel Prices Out Better

39.2%

Energy Community areas, many of which are former fossil fuel communities and rural CA counties, qualify for a 10% ITC adder. That brings the total discount to 39.2% of system cost. At that level, Propel's fixed-payment structure delivers more savings over the 25-year term than the Participate prepaid option.

Non-Energy Community Zip Codes

Participate Often Wins

30%

In standard zip codes with the base 30% ITC, Participate Energy's Prepaid Lease often delivers better value, especially when you add a Tesla Powerwall. No credit check, no monthly payment, and no UCC lien. If you cannot or prefer not to qualify for Propel's credit threshold, Participate is the right path.

Tesla Powerwall 3 home battery system available through Participate Energy solar prepaid lease California no credit check

Tesla Powerwall battery backup installation California home — Participate Energy prepaid solar lease no monthly payment

The California Rule of Thumb

In Energy Community zip codes where the ITC is 39.2%, Propel typically prices out better. In non-EC zip codes where the ITC is 30%, Participate Energy's Prepaid Lease, especially with a Tesla Powerwall, often delivers better value. Not sure which applies to your address? The free assessment identifies your zip code status in seconds.

IRS Energy Community bonus credit map California — Energy Community zip codes eligible for 39.2% solar discount Propel Financing

IRS-designated Energy Community zip codes in California. EC areas qualify for Propel's 39.2% discount.

Factor	Propel Financing	Participate Energy
ITC discount rate	39.2% (EC) / 29.8% (non-EC)	~30% base (all zip codes)
Best zip code type	Energy Community (EC)	Non-EC / Standard
Payment structure	Fixed monthly, 25 years	One upfront prepayment
Credit check	Yes, 660 FICO minimum	No credit check
Tesla Powerwall option	No (Enphase IQ battery)	Yes
UCC lien	Yes (Concert Finance security interest)	No UCC lien
Ownership transfer	Automatic at Year 5	Purchase option at Year 6
LADWP eligible	No	No

Real California Homeowners

What the Numbers Actually Look Like

These are real proposals from California homeowners who went through the assessment. Your zip code, roof, and usage will produce different numbers, but this shows the range.

Cervera Family

Kernville, CA — Energy Community (EC) — Propel

Was Paying

$443

per month to utility

Now Pays

$271

fixed Propel payment

Upfront Propel Discount-$22,827

EC Discount Rate39.2%

$146K

Projected 25-year total savings

Giron Family

Ojai, CA — SCE Territory — Propel

Was Paying

$500

per month to utility

Now Pays

$274

fixed Propel payment

Upfront Propel Discount-$23,059

Monthly Savings from Day One$226/mo

$194K

Projected 25-year total savings

Wais Family

Corona, CA — SCE Territory — Propel

Was Paying

$781

per month to utility

Now Pays

$348

fixed Propel payment

Upfront Propel Discount-$28,867

Monthly Savings from Day One$433/mo

$303K

Projected 25-year total savings

Vu Family

San Jose, CA — PG&E Territory — Propel

Was Paying

$322

per month to utility

Now Pays

$211

fixed Propel payment

Monthly Savings from Day One$111/mo

Utility RatePG&E $0.45/kWh

$86K+

Projected 25-year total savings

California Utility Context

What You Pay Determines What You Save

Higher utility rates create a larger gap between your current bill and a fixed prepaid lease payment. Here is how the major California utilities compare and what that means for your solar economics.

Utility	Avg. Rate (2026)	$200/mo Bill = ~kWh	Prepaid Lease Eligible	Notes
SDG&E (San Diego)	$0.50/kWh	400 kWh	Yes	Highest rates in CA; strongest ROI for prepaid lease
PG&E (Northern/Central CA)	$0.45/kWh	444 kWh	Yes	Broad service area; includes many EC zip codes
SCE (Southern CA)	$0.40/kWh	500 kWh	Yes	Most of LA/Orange/Riverside/San Bernardino counties
LADWP (City of LA)	$0.33/kWh	606 kWh	No	Not eligible for Propel or Participate programs

Does Your Home Qualify?

Quick Checklist Before You Run the Numbers

Most California homeowners with a monthly electric bill above $100 qualify. Here is what matters.

✓You own (not rent) a single-family home or eligible property
✓Your monthly electric bill is $100 or more
✓You have been at the property for at least 3 months
✓Your utility is PG&E, SCE, or SDG&E
✓660+ FICO score (Propel) or no minimum (Participate)
✗Condos, townhomes, and mobile homes do not qualify
✗LADWP customers are not eligible for either program
✗Renters cannot apply for either product

California-Specific Questions

CA Prepaid Lease FAQ

Does NEM 3.0 affect a prepaid solar lease?

It does, and mostly in a way that favors this structure. NEM 3.0 reduced what utilities pay for power exported to the grid, which makes self-consumption far more important than it was under NEM 2.0. Systems sized under our programs are designed to maximize self-use, and battery storage options are available to store surplus power rather than export it at a reduced credit rate.

Does LADWP territory qualify?

No. Customers served by the Los Angeles Department of Water and Power are not eligible for Propel Financing or Participate Energy's Prepaid Lease through Solar-Advisors.org. If you are in LADWP territory, contact us and we can discuss alternative options.

How do I know if my zip code is an Energy Community?

IRS Energy Community designations are updated periodically and include census tracts in former coal, oil, and gas communities as well as areas with significant fossil fuel employment history. Our free assessment looks up your specific zip code as part of the evaluation. If you are in an EC area, Propel's 39.2% discount applies. If not, Participate often prices out better.

Can I add battery storage to a prepaid lease in California?

Yes, both products include battery options. Propel systems can include Enphase IQ battery storage, priced into the overall system cost and covered by the same Propel discount. Participate Energy offers Tesla Powerwall as a battery-inclusive option, which is particularly attractive for non-EC homeowners where the Participate structure typically prices better than Propel.

What if I sell my California home before the ownership transfer?

For Propel, the loan is tied to you as the borrower rather than the property, which simplifies a home sale compared to traditional PPA transfers. For Participate Energy, the prepaid lease is transferable to the buyer as a home asset. Either way, a modern solar installation with battery storage typically adds to buyer appeal rather than creating a transaction obstacle.

Is there a California state incentive on top of the federal credit?

The SELF program and certain CPUC programs exist for income-qualified households, and some utilities offer rebates for battery storage. The prepaid lease structure captures the federal commercial ITC through the financing company, which is the primary driver of the upfront discount. A complete California incentive overview is available at our CA incentives page.

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