Home Solar and Batteries in California: How It Works, Net Billing and Sizing

Solar and batteries can feel like a different language. This guide puts it in plain words for homes in PG&E territory, with sources for every rule. Rates and programs change, so everything here was checked on November 2, 2026, and we point you to the official pages to confirm.

How solar works

Photovoltaic (PV) panels turn sunlight directly into direct current (DC) electricity. An inverter converts DC into the alternating current (AC) your home and the grid use. Your home uses solar first; any extra charges a battery or flows to the grid through a two-way meter.

Inverter types

Type	How it works	Trade-off
String	A string of panels feeds one inverter.	Cost-effective; shade or a fault on one panel can reduce the whole string.
Microinverters	A small inverter on each panel.	Panels work independently; can cost more.
Hybrid	One unit for solar and battery, charging on the DC side.	Tidy for planned batteries; check compatibility.

The DOE notes that solar-plus-battery systems rely on advanced inverters to run without the grid in an outage, if they’re designed to. Grid-tied solar without that capability shuts down when the grid does.

Net billing (NEM 3.0) in plain words

• New PG&E solar applications since April 15, 2023 go on the Net Billing Tariff (PG&E’s “Solar Billing Plan”).
• Solar serves your home first. Exports are credited at hourly values based on the CPUC’s avoided cost calculator: usually below retail, sometimes above on late-summer evenings.
• The CPUC notes batteries help by using or exporting stored energy at high-value hours.
• Net billing customers take an electrification time-of-use rate (E-ELEC for PG&E residential).
• You pay monthly and true-up yearly.
• Residential customers applying through 2027 lock their export schedule for nine years, and PG&E and SCE residential customers applying before the end of 2027 get an extra export adder (not for code-required solar), per the CPUC.
• Older net metering customers keep their legacy period, but PG&E says growing a system by 1 kW or 10% can move it to the Solar Billing Plan.

kW vs. kWh, and how long a battery lasts

kW is power right now; kWh is energy over time. Your PG&E account shows 12 months of kWh use, which is the starting point for solar sizing. For backup, divide usable battery kWh by the average kW you’ll draw, and check that the battery’s continuous kW can handle your biggest loads starting at once. Try it:

Battery run timeUsable energy divided by your average load, less the reserve you keep for the next outage.

Usable battery energy (kWh)Average load (watts)Reserve to keep (%)Highest load at once (watts, optional)Battery continuous output (kW, optional)

An estimate with no solar recharging. Cold weather, battery age and inverter losses shorten real run time a little.

For a production estimate at your own address, the free PVWatts calculator from the national lab is a good sanity check. A real proposal should state its assumptions. More on generators vs batteries in sizing backup power.

The panel and the 120% rule

Paraphrasing NEC 705.12: when solar back-feeds a panel through a breaker, 125% of the inverter output current plus the main breaker shouldn’t exceed 120% of the busbar rating, with the solar breaker at the opposite end from the main.

120% rule checkFor a load-side solar connection on a panel busbar.

Busbar rating (amps)Main breaker (amps)

A planning check only. Other connection methods exist, and the AHJ and utility review every system.

Over the limit? Options include a main breaker derate (if a load calculation allows), a supply-side connection, a new panel with a larger busbar, or a listed power control system. Details in Solar and Batteries in the Code.

Rapid shutdown

Paraphrasing NEC 690.12: PV on buildings must be able to quickly reduce voltage in conductors on and near the array when a shutdown switch is used, to protect firefighters. Replacement inverters and panel-level devices must keep this working.

Permits, interconnection and PTO

1. Design and a building permit from your city or county.
2. A PG&E interconnection application.
3. Installation and inspection.
4. Permission to operate (PTO) from PG&E. Don’t switch the system on for normal use before PTO.

Adding a battery later

AC-coupled batteries bring their own inverter and work with most existing systems; DC-coupled batteries share a hybrid inverter. Check panel room (the 120% rule again), the location rules in fire and building codes, and your utility plan before you start.

PSPS and wildfire outages

PG&E may turn off power ahead of high fire-risk weather. A battery with solar is quiet and recharges in sun; a generator runs as long as it has fuel. Pick your essentials first: fridge, lights, internet, well pump, medical equipment. Never back-feed a home through an outlet.

Maintenance

• Check production in the app monthly and compare with the same month last year.
• Watch for tree shade, chewed wires and nests under panels.
• Follow the maker’s cleaning advice and stay off the roof.
• Keep inverters and batteries clear and ventilated; test backup now and then.

Renewable basics

Solar panels convert sunlight to electricity. Wind turns a turbine’s rotor, which spins a generator. Hydropower uses flowing water to spin turbines; PG&E describes a hydro system drawing on more than 100 reservoirs, most high in the Sierra Nevada, with roots in the Gold Rush. Storage, from home batteries to grid-scale systems, holds energy for when the sun is down and the wind is still. See our history of electricity for how Sierra water powered early California.

Incentives (as of November 2026)

• Per the IRS, the Residential Clean Energy Credit doesn’t apply to expenditures made after December 31, 2025; an expenditure counts when installation is completed.
• SGIP program metrics showed general-market residential storage funding closed, with income-qualified equity funding limited or waitlisted in some areas, including PG&E.

Please confirm with the IRS, selfgenca.com or a tax professional. We never build a quote around an incentive that may not exist.

Want help with the electrical side? See solar, batteries & renewable energy.