California Solar Incentives & Rebates

Going Solar Is Simple With California Solar Incentives And Rebates

California is famous for its name as the "Golden State." But in the "Golden State," electric rates are the ninth highest in the country. A goldmine would come in handy for covering the cost of the electricity bill! But, with the provision of sunshine throughout the entire year, you can have the opportunity to transform that sunshine into gold! With high electricity rates prevalent in certain states, more individuals are turning to renewable energy sources by investing in solar energy, which is more financially beneficial. California provides several solar incentives and rebates that can benefit a property owner when investing in solar energy.

California Solar Incentives, Rebates, And Benefits

California Inflation Reduction Act (IRA)

Eligible property owners with solar panels may qualify for a 30% tax credit versus the system cost.

California Self-Generation Incentive Program (SGIP)

This is a solar incentive with a refund for purchasing and installing a solar battery on top of a rooftop panel system. The SGIP differs by the utility and the size of the battery storage.

Solar Energy System Property Tax Exclusion

California property owners who invest and set up solar- or wind-powered devices to generate energy for their homes or workplace are eligible to exclude from the total price the device imparts to their property. Fundamentally, everyone who sets up solar panels or other solar-powered devices on their estate will be excluded from the payment of property taxes corresponding to the expansion of property value as an outcome of including the solar system until 2025. To be eligible for a property tax exemption after installing a solar system, it’s recommended that you continue to pay your previous property tax, as the value of your home will not be reassessed.

California Renewable Portfolio Standards

California robust Renewable Portfolio Standards (RPS) are remarkable—one of the reasons California is a leading state in renewable energy. California RPS requires that 50% of the state's energy be generated from renewable sources by 2030. Utilities will be subject to substantial fees if this standard isn’t met. So naturally, instead of paying the fees, utilities in strong RPS states offer solar incentives for property owners to invest in solar panels.

California Net Metering

California property owners that invest in solar panels qualify for the net metering program. Net metering is a crucial regulation in California. Net metering establishes a connection between solar panels or other renewable energy generators and the public utility, enabling customers to offset the cost of the electricity they consume from the utility company with credits earned through their energy production. If the system generates excess energy, it can be returned to the utility company. In return, it will benefit you as utility companies will reimburse you by crediting it to your electric bill.

In California, the following three (3) big utility companies offer net metering:

1. Pacific Gas & Electric (PG&E)
2. Southern California Edison (SCE)
3. San Diego Gas & Electric (SDG&E)

California Interconnection Standards

Most property owners hope for an open, streamlined, reasonable, and foreseeable scheme for connecting to the grid. Interconnection standards refer to the regulations governing the connection of solar and other electrical generation systems to the grid, essentially a means of "plugging in" to the grid. These standards simplify installation, reduce expenses, and enhance the reliability of net metering. In California, the standards are well-defined and applicable throughout the state.

California Solar Incentives & Rebates

The California Solar Initiative (CSI) is responsible for managing the state's favorable rebate programs for solar power, which, although less prevalent than before, still exist in some regions. Rebates may be received in a lump sum or credited against the solar installer's bill. Opting for the former approach has the benefit of the solar installer typically taking care of the necessary paperwork.

California Solar Performance-Based Incentives (PBI)

Fortuitously, California is one of several states that provide Performance-Based Incentives (PBIs), which are financial incentives that compensate property owners based on the actual power produced by their solar system. In California, these incentives are called Solar Power Performance Payments and are calculated based on the kilowatt-hours (kWh) or BTUs generated by the system as recorded by the meter. The electricity produced is credited through Solar Renewable Energy Credits (SRECs), whose value varies based on the principle of supply and demand. SRECs serve as a valuable means of offsetting the cost of your solar system.

California Disadvantaged Communities Single-Family Affordable Solar Homes (DAC-SASH) Program

California developed the Disadvantaged Communities Single-Family Affordable Solar Homes (DAC-SASH) to intensify the embracement of sustainable energy in disadvantaged communities. Qualified low-income property owners who acquire electricity from PG&E, SCE, or SDG&E could be eligible for solar incentives for each kilowatt (kW) of mounted solar power.

Don’t Forget About Solar Federal Tax Credit!

In addition to these excellent rebates and exemptions available in California, property owners can also qualify for a sizable tax credit from the Federal government. Initially called the Investment Tax Credit (ITC), it includes 30% of the price of installing a solar panel system.

Sample Calculation: Assuming your solar energy system incurs $20,000, you would be eligible for a federal solar tax credit of $6,000, equivalent to 30% of the system's cost.

This amount can then be utilized to lessen your federal income tax due for the year you installed your solar panel system. But the credit goes to those who buy their system (cash or loan), not those who lease. Purchasing a solar system is a better option than leasing, as when you lease a system, the solar incentives are received by the third-party owner.

Today is the best time to go solar in California!