The California Climate Credit: What It Is and When To Expect It in 2026

Each year, California returns money to millions of residents and small businesses through the California Climate Credit, a program designed to help offset energy costs and support the state’s transition to cleaner energy.

You’ve probably seen the credit appear on your PG&E bill, but this is not a discount from your energy provider. It’s an automatic bill credit funded by the State of California’s Cap-and-Invest Program.

The California Climate Credit is part of a broader effort to reduce greenhouse gas emissions and make the clean energy transition more affordable for everyday Californians.

The program is funded through California’s Cap-and-Invest Program, which sets a statewide limit (or “cap”) on greenhouse gas emissions. Large polluters are required to purchase allowances for the carbon they emit, and a portion of that revenue comes back to residents and small businesses as a utility bill credit. In other words, some of the money collected through the state’s climate program is returned directly to you.

The California Climate Credit is administered by the California Public Utilities Commission (CPUC), while utility providers such as PG&E distribute the credit on the program’s behalf.

The credit appears automatically on your PG&E bill—no sign-up or action required.

Most residential households receive the credit on their electric bill twice per year and on their natural gas bill once per year. Amounts vary annually based on program revenue and the number of eligible customers.

In previous years, residential customers received electric Climate Credits in April and October, along with a natural gas credit in April.

Eligible small business customers—including non-residential commercial, industrial, or agricultural accounts—also receive an electric Climate Credit twice per year. In general, businesses qualify if they used less than 20 kilowatts (kW) of electricity in at least 9 of the previous 12 months.

Starting in 2026, the California Climate Credit distribution schedule is changing slightly.

Residential electric credits are moving to August and September, when summer cooling bills are often highest. Before 2026, these credits were distributed in April and October.

For natural gas customers, the gas credit was still distributed in April 2026. Beginning in 2027, natural gas credits will be distributed in February.

Small business Climate Credits will continue to be distributed in April and October.

No. Eligible customers will automatically see the credit appear as a line item on their utility bill during the distribution months.