California has been a nationwide chief in residential photo voltaic for a few years because of its robust photo voltaic incentives. However, the state did determine to decrease its internet metering charges, making some critics query its dedication to residential photo voltaic programs. The excellent news is that putting in photo voltaic panels can nonetheless be a money-saving transfer in California.
California has a robust presence within the photo voltaic vitality market, having ranked first within the nation for photo voltaic vitality manufacturing in 2024 up to now. However, the lowered incentives have made the state lag behind, and so California does not make CNET’s checklist of states with the very best incentives for photo voltaic panels.
Read extra: Best Solar Companies in California
All Americans who purchase photo voltaic panels are eligible for the federal tax credit score for renewable vitality, however state and native incentives for photo voltaic differ throughout the nation. Here are the incentives for photo voltaic initiatives in California.
Note: These California incentives are for residential electrical prospects solely. California has further incentives for organizations, companies and farms. The photo voltaic panel incentives listed beneath are correct as of September 8, 2024. Local authorities and utility packages change recurrently, so examine program web sites to ensure they’re nonetheless energetic.
Watch this: New Solar Shingles You May Not Even Notice
California state photo voltaic tax credit and incentives
Several incentives, credit and rebates can be found to all Californians who put money into photo voltaic vitality programs. Other incentives on this checklist apply to a number of California counties or to lower-income vitality prospects.
Property tax exclusion for photo voltaic vitality programs
California is amongst 32 states that defend in opposition to property tax will increase for owners who set up photo voltaic panels. Under California regulation, all qualifying energetic photo voltaic vitality programs can be excluded from the evaluation of your property, that means that putting in photo voltaic panels is not going to influence your property taxes a method or one other.
This property tax exclusion is at present set to run out Jan. 1, 2027.
California Self-Generation Incentive Program
Utility prospects of the 4 main investor-owned utilities — San Diego Gas & Electric, SoCalGas, Southern California Edison and Pacific Gas & Electric — are eligible to obtain rebates for putting in photo voltaic batteries utilizing California’s Self-Generation Incentive Program. The California Public Utilities Commission presents a $150 rebate for every kilowatt-hour of your photo voltaic storage system with increased rebates ($850 or $1000 per kilowatt hour) in case you meet sure earnings or geographic necessities.
A midsize battery just like the LGES 16H Prime, one of many high picks in CNET’s checklist of greatest photo voltaic batteries, offers 16kWh storage, which might end in a $3,200 rebate below present guidelines in California. The battery itself will value about $8,000 to $11,000 earlier than set up.
Disadvantaged Communities – Single-Family Solar Homes program
California’s DAC-SASH program offers photo voltaic incentives for low-income prospects in deprived communities. Administered by GRID Alternatives, this system presents Californians $8.5 million in incentives yearly.
The California Public Utilities Commission says that eligible prospects can obtain as much as $3 per watt in incentives for photo voltaic installations. The present value per watt of photo voltaic panels in California is $3.47, so DAC-SASH members might save about 86% on photo voltaic installations.
Watch this: How See-Through Solar Panels Could Bring Renewable Energy to Your Windows
California internet metering incentives
Net metering permits properties with photo voltaic installations to obtain a refund for contributing surplus photo voltaic vitality to the broader electrical energy grid. New guidelines for internet metering lower that quantity by 75%. While earlier internet metering members earned about 30 cents per kilowatt, new members will get about 8 cents per kilowatt.
The new internet metering plan comes with increased electrical energy charges for instances when demand is excessive and entry to renewable vitality is low, making photo voltaic batteries extra invaluable.
Read extra: Best Solar Batteries for 2024
PACE financing for photo voltaic panels
Property Assessed Clean Energy packages present financing for photo voltaic installations that permits residents to pay again loans for photo voltaic panels with their property taxes. While industrial PACE loans are frequent all through the US, solely three states — California, Florida and Missouri — supply residential PACE packages.
Unlike mortgage loans, PACE loans often require no down fee or month-to-month funds. Instead, borrowed cash is repaid by owners’ property tax payments over a time period of 10 to 30 years. A lien is positioned on your house till the mortgage is absolutely paid off, which makes promoting your house extra difficult. Some lenders could not need to present a mortgage for a house with an hooked up PACE lien.
California at present has 4 state-licensed PACE program directors:
Local communities could present PACE-style financing of their very own. The Sonoma County Energy Independence Program capabilities equally to state-licensed PACE packages, letting members pay again photo voltaic installations by way of their property tax payments over 10- or 20-year phrases at 7.49% curiosity.
Local photo voltaic tax credit and incentives in California
Beyond the photo voltaic incentives on the state stage, many cities, cities and municipalities supply further incentives for residents who put money into photo voltaic vitality initiatives.
Alameda Municipal Power income-qualified photo voltaic rebate
Residential prospects of Alameda Municipal Power can get a small rebate for putting in photo voltaic panels. You’ll get $500 again for any qualifying photo voltaic set up in case you earn lower than $106,000 and your house was constructed earlier than Jan. 1, 2020. This incentive is designed to offset charges incurred from putting in photo voltaic panels.
CleanPowerSF Solar Inverter Replacement Program
The San Francisco Public Utilities Commission and CleanPowerSF are operating this program to assist prospects exchange outdated, broken photo voltaic inverters. The program is accessible solely to current GoSolarSF prospects with a photo voltaic set up that is at the least 10 years outdated and not coated by guarantee.
If your photo voltaic inverter wants changing and you utilize a taking part installer*, you may obtain as much as $3,000 to cowl the price of the substitute.
* While the photo voltaic inverter substitute program seems to be energetic, the CleanPowerSF reality sheet notes that taking part installers are present “as of June 2023.”
Lancaster Energy Power Choice
Residential prospects of Lancaster Energy who cannot afford photo voltaic panels or do not need to pay for them can get them put in at no cost by Tesla with the electrical firm’s Power Choice program. Tesla will set up rooftop photo voltaic panels and a Tesla Powerwall Battery for no cash in any respect, and prospects pays for vitality utilization and storage by way of their standard electrical invoice.
Read extra: Free Solar Panels: Here’s What the Fine Print Means
Customers do not get tax incentives from the photo voltaic panels and might go away this system solely by “shopping for out” the photo voltaic gear and battery. Also, if a house within the Power Choice program is bought, the contract transfers to the brand new proprietor, which might make promoting extra difficult.
Los Angeles Department of Water and Power Solar Rooftops Program
LADWP’s Solar Rooftops Program provides its prospects one other technique to contribute to solar energy era with out spending something on photo voltaic panels. LADWP installs, connects and maintains the photo voltaic panels on a house owner’s property for gratis, and offers the house owner an annual fee of $240 to $600 annually for 20 years. Customers’ electrical payments are in any other case unaffected.
Sacramento Municipal Utility District battery storage incentive
Although a $150 stipend for photo voltaic panel installations has lapsed, SMUD is providing as much as $10,000 for battery installations in its service space. Customers can get pleasure from $5,000 in incentives per battery, as much as a most of $10,000 in case you purchase and set up two or extra. Your incentive is decided by which pricing plan you choose into and the way a lot management over your battery you give the utility. Note that purposes for this system are at present paused.
San Diego Green Building Incentive Program
The metropolis of San Diego will waive constructing allow charges and plan examine charges for the set up of residential photo voltaic panels.
Silicon Valley Power Low Income Solar Grant Program
Publicly-owned Silicon Valley Power, which largely serves the town of Santa Clara, offers grant cash for photo voltaic panels to residential prospects enrolled in its Financial Rate Assistance Program. Eligible prospects who personal their photo voltaic installations can get $3.50 per watt for photo voltaic programs as much as 3 kilowatts of energy. Solar programs should produce at the least 3,800 kWh yearly.
SoCalGas Solar Thermal Water Heating System Rebate
SoCalGas prospects in central and Southern California can get a rebate of $2,500 to $4,500 on qualifying photo voltaic water heaters. Your system should have a Solar Uniform Energy Factor of 1.8 or increased, and you will want to put in a brand new Energy Star-certified water heater alongside together with your photo voltaic set up.
Local photo voltaic attic fan rebates in California
Many native vitality suppliers supply rebates for energy-efficient home equipment, together with photo voltaic attic followers. These followers often join on to devoted photo voltaic panels to energy themselves and funky down attics. Here are the publicly owned electrical utilities which are at present providing rebates for photo voltaic attic followers.
Azusa photo voltaic fan rebate: Customers of Azusa Light and Water can rise up to $150 as a credit score on their electrical invoice with the acquisition of a professional photo voltaic fan for his or her attic or house utilizing this software (PDF).
Glendale Water & Power photo voltaic attic fan rebate: GWP prospects who set up photo voltaic attic followers can get $100 for every, or $125 if the followers have been bought in Glendale. Customers are restricted to 2 rebates each 10 years on the similar residence and might apply for the rebate on-line.
Gridley photo voltaic attic fan rebate: The City of Gridley Electric Utility provides prospects a rebate of $0.45 per cubic foot, per minute for photo voltaic attic followers. Fill out the applying (PDF) and mail or electronic mail it to the electrical division.
Imperial Irrigation District photo voltaic attic fan rebate: Residential electrical prospects can get a $125 rebate for photo voltaic attic followers utilizing this software (PDF).
Lodi photo voltaic attic fan rebate: The Lodi Electric Utility presents a rebate for photo voltaic attic followers primarily based on the capability of your fan — $0.15 per cubic foot, per minute. You’ll want to finish this kind (PDF) to use for the rebate.
Modesto Irrigation District photo voltaic attic fan rebate: Residential prospects of MID can get some a refund after buying a photo voltaic attic fan — $100 for home equipment with 20 watts of energy or higher; $50 for followers with 10 to 19 watts. The software type (PDF) have to be snail-mailed again to the electrical firm.
Pasadena photo voltaic attic fan rebate: If you are a Pasadena Water & Power buyer, you will get $80 again on a rebate for photo voltaic attic followers, plus one other $20 in case you bought the fan in Pasadena. You’ll must signal into your on-line account to use for the rebate.
Riverside photo voltaic attic fan rebate: The electrical firm of Riverside offers quite a lot of rebates for energy-efficient home equipment, together with photo voltaic attic followers. To declare the $100 rebate for a photo voltaic attic fan, full and mail or electronic mail this kind (PDF).
Ukiah photo voltaic attic fan rebate: Ukiah additionally offers a rebate for photo voltaic attic followers primarily based on their capability. The metropolis utility pays $0.20 per cubic toes per minute. Residential prospects can apply for the photo voltaic attic fan rebate with this kind (PDF).
Federal photo voltaic tax credit and incentives for Californians
The federal photo voltaic tax credit score may be extra invaluable than any of the state and native incentives at present provided in California. It provides you 30% again within the type of a tax credit score for bills associated to putting in photo voltaic panels and batteries.
The official title of the federal photo voltaic tax credit score is the Residential Clean Energy Credit, and although it was anticipated to run out in 2022, the Inflation Reduction Act prolonged the tax credit score till 2035.
Applying for the federal photo voltaic tax credit score is easy. Fill out IRS Form 5695 and embrace it together with your tax return for the 12 months during which you put in your photo voltaic system, or let the very best tax software program deal with it for you.
The Inflation Reduction Act of 2022 retains the federal photo voltaic tax credit score at 30% till 2033 when it can drop to 26%. The credit score will additional lower to 22% in 2034 and expire in 2035.
The photo voltaic tax credit score is nonrefundable, that means the credit score you obtain can’t be greater than the quantity you pay in taxes. You can carry over any further credit score past your tax burden into future tax years.
Comparing California photo voltaic incentives
undefined
| California incentive | Description | Eligibility | Estimated worth** |
|---|---|---|---|
| Solar property tax exclusion | Solar funding can be excluded from house assessments for property taxes | All Californians, till 2025 | $240 per 12 months, although will differ significantly primarily based on house value, photo voltaic set up, and native taxes |
| DAC-SASH | $3 per watt incentives for photo voltaic installations | Lower-income Californians in deprived communities | $24,000 |
| Net metering | Money again for extra electrical energy put again into the grid | Residential California prospects of investor-owned utilities | 8 cents per kWh |
| California Self-Generation Incentive Program | State rebate for putting in photo voltaic batteries | All Californians | $200 per kWh of photo voltaic storage |
| Alameda Municipal Power earnings certified photo voltaic rebate | Solar panel rebate for lower-income prospects | AMP prospects incomes lower than $106,000 | $500 |
| CleanPowerSF Solar Inverter Replacement Program | Incentive to switch damaged inverters for gratis | GoSolarSF prospects | Up to $3,000 |
| Los Angeles Department of Water and Power Solar Rooftops Program | Free photo voltaic panel set up with an annual fee as an alternative of vitality financial savings | LADWP prospects | $4,800 to $12,000 over 20 years |
| Sacramento Municipal Utility District battery storage incentives | Incentive primarily based on storage measurement and utility price plan | SMUD prospects | Up to $10,000 |
| San Diego Green Building Incentive Program | No allow or plan examine charges for photo voltaic installations | San Diego residents | Varies primarily based on house measurement |
| Silicon Valley Power Low Income Solar Grant Program | Money again per kWH of photo voltaic system energy for eligible prospects | SVP prospects enrolled in its Financial Rate Assistance Program | $10,500 |
| SoCalGas Solar Thermal Water Heating System Rebate | Money again for eligible photo voltaic water heaters | SoCalGas prospects | $2,500 to $4,500 |
| Local photo voltaic attic fan rebates | Money again for buying energy-efficient home equipment | Residential prospects of publicly owned electrical firms in Azusa, Glendale, Gridley, Imperial, Lodi, Modesto, Pasadena, Riverside and Ukiah | $80-$150 |
| Federal photo voltaic tax credit score | 30% tax credit score for certified photo voltaic set up prices | All Americans, till 2035 | $7,200 |
** Values of incentives are primarily based on a nationwide $24,000 photo voltaic set up common ($2.99 per watt for an 8kWh system). State property tax is estimated at 1% of house worth.
California energy buying agreements
If you do not need to set up photo voltaic panels your self, a solar energy buying settlement lets one other firm set up photo voltaic in your property, after which cost you a predetermined quantity for that photo voltaic vitality.
Solar energy buying agreements are a simple technique to get solar energy for gratis upfront, however you will not get any of the tax incentives associated to photo voltaic panels, and you will must be careful for potential price hikes over time.
Here are just a few of the native public solar energy buying packages obtainable in California.
Santa Clara Solar Water Heating Program
For owners who do not need to set up their very own photo voltaic water heaters, the town of Santa Clara leases and maintains photo voltaic water heating gear for its residents. Homeowners pay an set up charge and a month-to-month utility charge for the gear, and the town takes care of the remainder.
Community photo voltaic packages in California
California has allowed group photo voltaic packages by regulation since 2013. Community photo voltaic initiatives let individuals use photo voltaic vitality with out putting in photo voltaic panels on their property. The electrical energy comes from a big shared photo voltaic set up.
California lately handed the Community Renewable Energy Act, a regulation that goals to make group photo voltaic initiatives extra accessible for renters and owners who can’t afford photo voltaic panels.
The Community Solar Green Tariff program offers a 20% low cost on group photo voltaic vitality for individuals dwelling in deprived communities. Also, some municipal energy firms in California, comparable to the town of Anaheim, present group photo voltaic low cost packages for residential prospects.
California photo voltaic FAQs
Is it price going photo voltaic in California?
California does not measure as much as another states so far as the very best incentives for photo voltaic, however it nonetheless presents incentives for photo voltaic storage, internet metering and installations for low-income households in deprived communities.
The new California internet metering plan slashes the worth of surplus photo voltaic vitality put again into the grid by 75%. Some consultants recommend the brand new charges will prolong the time wanted on your photo voltaic system to pay you again in vitality financial savings from 5 or 6 years to about 15.
Whether photo voltaic panels are price it is dependent upon your private state of affairs, notably how a lot you care about producing your individual clear electrical energy. If you are wanting to save cash instantly, examine your native electrical energy suppliers for group photo voltaic low cost packages.
How do photo voltaic tax credit work?
Solar tax credit encourage investments in photo voltaic vitality by providing you with a refund at tax time. The quantity of tax profit will often be a share of the quantity invested in photo voltaic vitality. The credit should be claimed for a similar tax 12 months during which you paid on your photo voltaic venture.
How does the federal photo voltaic tax credit score work?
The federal tax credit score for photo voltaic funding, formally known as the Residential Clean Energy Credit, offers a tax incentive for Americans who put money into photo voltaic, wind, geothermal, gasoline cells or battery storage.
For energy-saving enhancements to your house, together with photo voltaic panels, the federal tax credit score provides you 30% again in your funding, with no cap or restrict, aside from gasoline cells. To declare the credit score at tax time, you will must submit IRS Form 5695 together with your return. All of the high tax software program can deal with that for you.
How many instances are you able to declare photo voltaic tax credit?
You can solely declare photo voltaic tax credit as soon as, within the 12 months that you simply buy your photo voltaic gear. If you make further investments in photo voltaic or renewable vitality in future years, you may take tax credit for that cash as nicely. There are not any limits on what number of instances you may declare the credit score, so long as you make repeated investments in renewable vitality over a number of years.
One exception to the one-time rule is that if your federal photo voltaic tax credit score exceeds the quantity you owe in taxes for a 12 months. You do not get the additional a refund straight away, however you may carry over the surplus quantity to future tax years, that means that it is doable to assert the federal photo voltaic tax credit score for a similar funding over successive years.
What are the brand new guidelines for internet metering in California?
In April 2023, California modified its guidelines for internet metering, lowering the worth of photo voltaic installations that return electrical energy to the broader grid and rising the worth of photo voltaic batteries.
The new guidelines — known as Net Metering 3.0 — scale back the credit score worth for extra vitality despatched to the grid by 75%, from a mean of 30 cents per kWh to about 8 cents per kWh.
New time-of-use guidelines will make electrical energy dearer at sure instances of day, so photo voltaic batteries that may retailer and supply electrical energy at high-priced instances at the moment are extra invaluable.
Under Net Metering 2.0, photo voltaic prospects in California might anticipate to repay their photo voltaic panels with electrical energy financial savings in about 5 or 6 years. Some consultants now predict it might take as much as 15 years below the brand new guidelines.
Customers who put in photo voltaic panels below earlier internet metering guidelines will proceed to obtain the sooner internet metering charges for 20 years from their preliminary set up.
It’s necessary to notice that these new internet metering guidelines solely apply to California’s six investor-owned utilities — San Diego Gas & Electric, SoCalGas, Southern California Edison, Pacific Gas & Electric, Bear Valley Electric Service and Liberty.
Local publicly-owned utilities should still present their very own charges for surplus photo voltaic vitality. For instance, the Los Angeles Department of Water and Power is at present paying 19 to 34 cents per kWh, nicely greater than the brand new charges for internet metering 3.0. Other suppliers could pay much less — Turlock Irrigation District at present pays lower than 3 cents per kWh — or by no means.
CNET’s Andrew Blok contributed to this story.
