California Solar
Incentives & Rebates

Updated March 7, 2021

California Renewable Portfolio Standards

Just one reason California is a leading state in renewable energy is the state’s strong Renewable Portfolio Standards (RPS). The standards mandate that California generate 50% of all its energy from renewable sources by 2030. Utilities will have to pay high fees if the standards are not met, so there is strong incentive in California for utilities to offer solar incentives.

California Electric Rates

In the Golden State you sure could use a goldmine to pay the electric bill. Electric rates in California put the state at ninth highest in the country. No wonder so many people there adopt renewable energy. An investment in solar energy is more financially rewarding in states with high electric bills.

California Net Metering

Very strong net metering laws are a real asset in California. Net metering is a system in which solar panels or other renewable energy generators are connected to the public utility, allowing customers to offset the cost of the power they draw from the utility with credits they earn on their own production. If your system produces more power than you need, the excess is sold to the utility, which you see as a credit on your power bill.

California Interconnection Standards

Interconnection standards are requirements for connecting solar and other electrical generation systems to the grid. They make installation easier and usually less expensive, and net metering is more reliable too. The standards in California are clear and statewide.

California Solar Power Rebates

The state’s generous rebate programs for solar power are handled through the California Solar Initiative (CSI). While more widespread in the past, rebate programs are still around in parts of the state. You can take the rebate in a lump sum payment, or your installer can take it off his bill. One advantage to the former method is that usually the installer will handle the paperwork.

California Performance-Based Incentives (PBI)

California is one of many states that offer PBIs, which are incentives based on the actual power that your system generates. California calls them Solar Power Performance Payments. The payments are based on kilowatt-hours (kWh) or BTUs generated by your system, as measured by the meter. The electricity produced is credited as Solar Renewable Energy Credits (SRECs), the value of which fluctuates by the rule of supply and demand. SRECs are a good way to help your system pay for itself.

California Property Tax Exemption

Keep paying your previous property tax after installing the solar system. Californians enjoy a property tax exemption. The value of their home will not be reassessed.

Don’t Forget the Federal Tax Credit, California!

On top of these great California rebates and exemptions, you also qualify for the sizable tax credit from the Federal government. The Investment Tax Credit (ITC) is currently worth 26 percent of the system cost, and will be deducted from your Federal income tax. The credit goes to those who buy their system (cash or loan), not to those who lease. If you lease a system, incentives go to the third-party owner. That’s a great reason to buy, not lease!