Residential Solar - Big Changes Coming
Rooftop Solar in San Joaquin County
Impact of Trump’s Tariffs, PG&E’s NEM 3.0 and the One Big Beautiful Bill
Rooftop solar adoption in San Joaquin County will be influenced by federal trade policy, California’s net metering regulations, and the One Big Beautiful Bill. In 2025, three major factors are making rooftop solar less attractive to homeowners:
New Trump administration tariffs on solar panels and components
PG&E’s transition to Net Energy Metering 3.0 (NEM 3.0)
One Big Beautiful Bill phases out the residential solar Investment Tax Credit (30%) by the end of 2025.
Each has a distinct effect on the cost of going solar and the expected number of new installations.
1. Impact of Trump’s Tariffs on Rooftop Solar Costs
Tariffs have raised costs for imported solar panels and components, especially from China and Southeast Asia. Recent policy set tariffs at 10% for most countries and up to 145% for Chinese imports[1][3].
Most residential solar panels in the U.S. are not directly imported from China, but they often contain Chinese components. This means the full panel may not be subject to the highest tariffs, but specific parts like frames or silicon cells are affected[3].
Estimates suggest these tariffs could increase residential solar system costs by 5–15% over pre-tariff levels, with the higher end likely if tariffs persist or expand[4][6]. For a typical $20,000 installation, this could mean an extra $1,000–$3,000 in upfront cost.
For most homeowners, the increase from tariffs alone is moderate compared to the total system cost. Equipment (panels, inverters, racking) comprises about 30% of the installed price, so most of the added tariff cost will be a fraction of the total outlay[3].
2. PG&E’s NEM 3.0: Changes and Effects
NEM 3.0 has sharply cut the compensation rate for excess solar energy exported to the grid—by about 75% compared to NEM 2.0[7][9].
Under NEM 2.0, rooftop solar owners were credited at or near the full retail electricity rate for surplus energy.
Under NEM 3.0, new customers after April 2023 earn only a fraction of this rate, making payback periods longer and economics less attractive.
Typical payback periods for new residential solar installations have increased from 5–7 years to 10–14+ years without battery storage[7][8].
Homeowners are now strongly incentivized to add battery storage to offset poor export rates and maximize self-consumption, but this raises upfront costs further.
3. One Big Beautiful Bill and phase out of Investment Tax Credit for Solar
The federal 30% Investment Tax Credit (ITC) for residential rooftop solar will be eliminated for systems installed after December 31, 2025. Systems placed in service by the end of 2025 will still qualify for the 30% tax credit.
Details and Timeline
One Big Beautiful Bill, signed into law on July 4, 2025, accelerates the phase-out of the 30% federal tax credit for residential solar (Section 25D of the tax code).
Homeowners must have their rooftop solar fully installed and operational by December 31, 2025, to claim the ITC.
There is no “start of construction” exception for residential solar—only projects that are completed and placed in service by the year-end deadline are eligible for the credit[21][22].
After January 1, 2026, new residential rooftop solar projects will no longer be eligible for the federal 30% ITC.
4. Effect on Number of New Installations in San Joaquin County
Factor | Impact on Installations | Details |
Trump’s Tariffs | Moderate decrease (5–15% higher cost reduces demand) | Some price-sensitive buyers may postpone or size down their systems[1][3][4] |
NEM 3.0 | Substantial decrease (30–50% drop in residential installs) | Statewide, installations plummeted after NEM 3.0; similar local effect likely[9][8] |
One Big Beautiful Bill | Removes 30% Investment Tax Credit - additional drop in residential installs | Must be installed by 12/31/2025 |
Battery Uptake | Increases slightly but at higher cost | Solar+battery systems are more compelling under NEM 3.0 but more expensive |
San Joaquin County has seen rapid solar growth, but the dual effect of tariffs and NEM 3.0 has slowed this trend in 2024–2025.
Local authorities and market analysts report a major drop in new residential solar project applications since NEM 3.0 took effect[10].
Industry surveys and market data indicate statewide residential solar installations dropped 36% in 2024 due to NEM 3.0, with San Joaquin County mirroring this trend[9].
Commercial/agricultural installations may fare better if they adopt solar+battery configurations, but these too face higher pricing due to tariffs and less favorable net metering.
Key Effects of NEM 3.0
NEM 3.0 has sharply lowered the compensation rate for excess solar energy sent back to PG&E’s grid, reducing it by about 75% compared to previous Net Energy Metering rules.
Under the former NEM 2.0, homeowners received nearly the full retail rate for surplus electricity provided to the grid. NEM 3.0, in contrast, credits new solar owners at significantly lower, fluctuating rates tied to real-time utility prices.
Impact on Payback Period for Homeowners
The payback period for a typical rooftop solar system in San Joaquin County has increased from a pre-NEM 3.0 average of 5–7 years to 10–14 years or more for new customers joining under NEM 3.0.
This change is documented both in statewide modeling and market surveys, with San Joaquin County reflecting the broader trend.
Homeowners relying exclusively on solar (without batteries) are especially affected, as reduced export compensation means savings accumulate more slowly.
Adding battery storage is now strongly encouraged under NEM 3.0, as it allows homeowners to use more of their own solar production ("self-consumption") instead of exporting it to the grid at a low rate. However, batteries add significant upfront costs, which can sometimes further lengthen the payback period.
Table: Estimated Residential Solar Payback Periods
Policy Scenario | Typical Payback Period (Years) | Notes |
NEM 2.0 (2017–2023) | 5–7 | High net export credits, fast ROI |
NEM 3.0 (2023+) | 10–14+ | Deeply reduced export value, slower ROI |
NEM 3.0 w/ Battery | 9–13 | Somewhat shorter with high self-consumption |
Actual figures depend on household usage, system size, battery adoption, and rate schedule.
Local Market Observations
New installation rates have dropped sharply throughout 2024–2025, reflecting the longer payback horizon and less attractive financial returns for homeowners.
While adding batteries can optimize savings under NEM 3.0, higher upfront costs remain a challenge for many in the San Joaquin region.
Households that can maximize self-consumption and adjust usage patterns will fare somewhat better, but the overall economics are much less favorable for new solar customers compared to previous years.
Key Takeaways
Trump’s tariffs have increased rooftop solar costs in San Joaquin County, but the effect is moderate—typically adding 5–15% to project costs, with higher battery pricing and potential supply chain disruptions[1][3][6].
PG&E’s NEM 3.0 is the dominant factor depressing new rooftop solar installations, by slashing grid export compensation by roughly three-quarters and lengthening payback periods[7][8].
The combined result is a sharp slowdown in new rooftop solar adoption for 2024–2025 and likely beyond, unless state or federal policy becomes more favorable. Battery adoption is up, but affordability is a barrier for many households.
Utility-scale and commercial projects may continue if grid policy or incentives change, and as land-use shifts free up more ground for solar development[12].
In summary: Rooftop solar in San Joaquin County faces higher upfront costs and significantly less attractive economics due to Trump’s tariffs and NEM 3.0, leading to a substantial decline in new residential installations and a market shift toward higher-cost solar+battery systems[1][3][9][6].
Sources
[1] Trump Tariffs Impact on Solar: Increased Prices and Potential Fraud https://www.solarreviews.com/blog/trump-tariffs-and-solar
[2] How Trump's latest tariffs could impact solar - EnergySage https://www.energysage.com/news/how-new-trump-tariffs-could-affect-the-solar-industry/
[3] What Trump's 2025 Tariffs Mean for Rooftop Solar https://www.solar.com/learn/what-trumps-2025-tariffs-mean-for-rooftop-solar/
[4] Tariffs to 'significantly' increase costs for US solar, energy storage https://www.pv-tech.org/tariffs-to-significantly-increase-costs-and-disrupt-us-solar-and-energy-storage/
[5] How Trump's Tariffs Will Impact Solar Costs https://exactsolar.com/how-trumps-tariffs-will-impact-solar-costs/
[6] Trump's Tariffs Inflict Damage on US Solar Industry - ACE Battery https://www.acebattery.com/blogs/trump-s-tariffs-inflict-damage-on-us-solar-industry
[7] What is NEM 3.0 and How Will it Impact California Solar Owners? https://www.solar.com/learn/nem-3-0-proposal-and-impacts-for-california-homeowners/
[8] NEM 3.0 in California: What You Need to Know - EnergySage https://www.energysage.com/blog/net-metering-3-0/
[9] Understanding NEM 3.0 in California - GreenLancer https://www.greenlancer.com/post/nem-3-0
[10] [PDF] San Joaquin County, California 2025-2030 Comprehensive ... https://www.sjcworknet.org/eda_docs/pdf/SanJoaquinCounty2025-2030_CEDS%20and%20Appendix.pdf
[11] [PDF] 2024 General Plan Annual Prgress Report.pdf - San Joaquin County https://www.sjgov.org/commdev/cgi-bin/cdyn.exe/file/Planning/Other/2024%20General%20Plan%20Annual%20Prgress%20Report.pdf
[12] Solar Energy and Groundwater in the San Joaquin Valley https://www.ppic.org/publication/solar-energy-and-groundwater-in-the-san-joaquin-valley/
[13] One year later: Charting the path toward a clean energy future in the ... https://www.catf.us/2025/06/one-year-later-charting-path-toward-clean-energy-future-san-joaquin-valley/
[14] How President Trump's Tariffs Could Make Going Solar More ... https://www.cnet.com/home/solar/how-president-trumps-tariffs-could-make-going-solar-more-expensive/
[15] Solar Tariffs Cause Devastating Harm to U.S. Market, Economy and ... https://seia.org/news/solar-tariff-impacts/
[16] The Effect of Trump's Tariffs on Solar Energy Construction https://dwgp.com/firm-announcements/the-effect-of-trumps-tariffs-on-solar-energy-construction
[17] California Supreme Court hears solar net metering arguments https://calmatters.org/economy/2025/06/solar-net-metering-at-state-supreme-court/
[18] Has PG&E's NEM 3.0 plan turned others away from considering solar? https://www.reddit.com/r/bayarea/comments/17safpw/has_pges_nem_30_plan_turned_others_away_from/
[19] Statistics and Charts - CaliforniaDGStats https://www.californiadgstats.ca.gov/charts/
[20] How Trump's widespread tariffs affect the U.S. solar industry https://pv-magazine-usa.com/2025/04/03/how-trumps-widespread-tariffs-affect-the-u-s-solar-industry/
[21] Trump and the Fate of the 30% Solar Tax Credit in 2025 https://www.solar.com/learn/trump-and-the-fate-of-the-30-solar-tax-credit/
[22] President Trump signs bill killing the solar tax credit ... - EnergySage https://www.energysage.com/news/congress-passes-bill-ending-residential-solar-tax-credit/