Key takeaways


f you're a CA homeowner contemplating going solar, you're about to hit the jackpot. The Golden State isn't just blazing the trail in solar energy; it's also offering a tempting feast of incentives that make the transition to solar a real no-brainer. Let's take a journey through the abundant opportunities that solar power presents to CA residents.

California Solar: Leading the US Solar Charge

Soaking up the sun takes on a new meaning in CA, the state that holds a leading position for solar energy production in the US. The Solar Energy Industries Association (SEIA) highlighted California for being at the forefront of total PV generation in 2022, with the sun’s power contributing to over 26% of the state's electricity and about 41,000 MW installed.

The state took an unprecedented step in 2020, enacting a law that calls for all new homes built to be equipped with photovoltaics. This trailblazing move illustrates the state's firm commitment to creating avenues for harnessing the sun's potential.

Several key factors fuel the robust PV adoption in California. Firstly, the state's renewable portfolio standard mandates that 60% of CA electricity should come from renewable resources by 2030, reaching 100% by 2045. This policy has been instrumental in driving CA shift towards solar power.

The declining cost of solar power also plays a significant role. Over the past decade, the cost of solar power in CA has dropped by a whopping 54%, making the sun’s energy an increasingly attractive option for homeowners and businesses alike. Moreover, high CA insolation – 284 sunny days per year – makes it a prime location for harnessing solar energy.

Last but not least, CA boasts a supportive community of solar advocates. CA residents, known for their forward-thinking attitudes and commitment to environmental stewardship, have thrown their weight behind the switch to solar power, making the state the undisputed US leader.

The Solar Switch: Exploring Incentives, Programs, and Rebates

Solar energy offers not just environmental benefits but also some awesome financial perks. There's a wide range of incentives, programs, and rebates specifically designed to motivate CA homeowners to make the switch to solar power. These amazing incentives can greatly slash the cost of installing solar modules, making them a more affordable and enticing choice for CA householders.

Government programs like the Federal Solar Investment Tax Credit (ITC) allow you to deduct a percentage of your system's cost from your federal taxes. In addition, numerous states, including CA, offer extra incentives such as property tax exemptions and rebates.

CA utility companies also have exciting incentives for their customers, like the net metering program, where they buy back any surplus electricity your panels generate with Tesla generators. This means your meter can actually run backward, resulting in lower electricity bills.

Furthermore, local CA governments sometimes provide rebates or low-interest financing incentives to encourage the adoption of photovoltaics. Solar easement laws ensure your right to access sunlight, while the Property Assessed Clean Energy (PACE) program helps finance energy efficiency upgrades.

California solar energy not only make the sun’s energy an environmentally savvy choice but also a financially savvy one. By reducing upfront costs and ongoing energy expenses, CA homeowners can enjoy a significant return on their investment in the long run.

Top Perks, Programs, and Rebates for CA solar adopters

Federal Solar Investment Tax Credit (ITC)

In the sea of solar incentives in California, the Federal ITC truly stands out. Even though there's no specific California solar tax credit, homeowners can leverage the federal advantage to effectively decrease their taxable income and enjoy savings.

So, what is the magic behind the ITC incentive? When you opt for a photovoltaic system, you qualify for a credit that can be claimed on your federal income taxes. This credit equates to a percentage of your system's cost. The ITC was initially set at a 26% credit for systems installed from 2020 to 2022, but the Inflation Reduction Act of 2022 increased and extended it to 30% for systems installed through 2032.

The credit covers a wide array of installation costs, from the panels themselves to associated equipment like inverters, wiring, and mounting hardware. Even labor costs, permitting and inspection fees, solar power storage equipment, and sales taxes on eligible expenses can be included.

Remember, you can only claim the benefit once, and if your tax liability for the year is lower than the credit, the remaining credit will roll over to the next year. Note that this deduction works to decrease your tax bill; it's not a cash refund.

However, as all good things must come to an end, the ITC will start phasing out in 2033, decreasing to 26%, then 22% in 2034, and ceasing in 2035. So, seize the moment! Think of your solar installation as an investment with an enticing 26%-30% discount, all thanks to the ITC.

DAC-SASH program

When discussing solar incentives in California, it's impossible to ignore the Disadvantaged Communities - Single-family Affordable Solar Homes (DAC-SASH) program. This one-time rebate, endorsed for implementation by the CA Public Utilities Commission (CPUC), is designed to broaden the reach of clean, cost-effective power for residential customers residing in disadvantaged communities.

Available to homeowners who are part of California top 25% most disadvantaged communities, DAC-SASH requires participants to satisfy specific income prerequisites and to be customers of particular utilities, including Pacific Gas and Electric (PG&E), San Diego Gas and Electric (SDG&E), and Southern California Edison (SCE).

Beyond its role as a financial incentive, DAC-SASH also brings opportunities for job training and employment within the photovoltaic industry to these communities. Scheduled to run through 2030, DAC-SASH reaffirms CPUC's commitment to encouraging solar adoption and creating a brighter future for all Californians.

Leveraging incentives like tax credits and rebates, California solar panel companies are empowering communities to embrace clean, renewable energy solutions and contributing to the state's ambitious climate goals

Self-Generation Incentive Rebate Program (SGIP)

For homeowners in CA looking to enhance their PV systems with a battery, the Self-Generation Incentive Program (SGIP) presents a compelling opportunity. Managed by CPUC, SGIP dedicates a remarkable 80% of its budget to incentivizing CA energy storage systems.

This CA program operates on a tiered rate structure, rewarding early adopters with more substantial rebates while reducing the incentive amount as more batteries are installed. Moreover, the incentive rate varies depending on the nature of the project, meaning that a large-scale battery installation at an industrial site would qualify for a different incentive amount compared to a smaller residential installation.

Additionally, the remaining 20% of the SGIP program budget is allocated to supporting other "behind-the-meter" distributed generation technologies, all aimed at curbing the CA greenhouse gas emissions.

State Property Tax Exemption

For most homeowners, home improvements lead to an increase in property value, which in turn often calls for higher property taxes. However, California, eager to push for a switch to clean energy, offers an exception to this rule for its residents.

CA Property Tax Exemption automatically applies to all solar powered systems within the state, ensuring your home's increased value won't lead to an inflated property tax bill. Your local municipality will simply disregard the value added by your CA photovoltaic system when calculating your property charges. This results in you enjoying a higher home value and clean energy without any added financial burdens.

Property Assessed Clean Energy (PACE) Program

For CA homeowners seeking a financially viable way to switch to solar power, Property Assessed Clean Energy (PACE) financing program offers an exciting solution. PACE provides a financially accessible route to solar through its low annual percentage rate (APR) and no upfront payment required features.

The PACE program encompasses a long-term investment approach, where your PV solar project becomes part of your property tax payments. The appeal of PACE loans lies in their affordability, often costing significantly less than financing options through installers or third parties.

To apply for a PACE loan, you start by selecting an approved CA vendor from the Department of Financial Protection and Innovation's (DFPI) list. A program administrator will guide you through the paperwork process, making it more efficient and less burdensome.

One crucial aspect to consider is that PACE loans are tied to your property as a lien. This can complicate matters if you plan to sell your property before paying off the loan. Therefore, CA homeowners anticipating a move within a few years may want to explore alternative financing options.

Equity Resiliency Rebate Program

Solar rebates California include the Equity Resiliency Program (ERP), which is a key aspect of the broader SASH initiative. Unlike SASH, ERP specifically focuses on energy storage solutions.

If you're participating in SASH and want to integrate batteries into your home's PV energy system, the ERP provides an excellent opportunity to do so at an affordable cost. The program offers rebates of up to $1,000 per kilowatt-hour (kWh) of battery capacity, significantly reducing installation expenses.

For CA homeowners currently engaged with a SASH program representative, there's an opportunity to show your enthusiasm for the ERP program as well. By communicating your intention to incorporate batteries, your representative can guide you through the paperwork required to qualify for this exceptional CA rebate program.

CA Solar Rights

CA Solar Rights Act is a robust piece of legislation designed to shield homeowners' rights to install and own PV panels from potential obstacles posed by Homeowners Associations (HOAs).

While HOAs can impose "reasonable" restrictions on solar installations, there are strict boundaries they must respect. Any restrictions can't push the installation cost over an additional $1,000. Moreover, these limitations can't diminish the system's efficacy or its performance by more than 10%. The CA law also makes provisions for the usage of alternative systems of equal efficiency, cost savings, and overall expense, ensuring that homeowners always have the liberty to opt for the best possible solution.

Net Metering

Net metering is a great program that saves money for homeowners with PV energy systems. It's simple: when your array produces more electricity than you use, the excess energy goes back to the grid and earns you credits on your utility bills.

Over the years, CA net metering rules have changed. In 2016, NEM 2.0 program brought three big changes: interconnection fees, monthly charges, and time-of-use energy plans. Under time-of-use, rates go up during periods of high electricity demand, like from 4 to 9 p.m., when most people are home.

Starting April 15, 2023, California introduced NEM 3.0 program, which made significant changes for new solar customers. A major part of NEM 3.0 is net billing, which reduces the value of surplus energy sent to the grid by up to 75%. The rates are based on the avoided cost, or the money saved by the CA utility provider by not producing the energy themselves.

Local Solar Programs and Rebates

In addition, California provides a range of localized incentives and rebates aimed at encouraging CA homeowners to embrace PV installation. One noteworthy program to consider is the rebate offered by the Rancho Mirage Energy Authority (RMEA). Through this initiative, RMEA customers can enjoy a generous one-time rebate of $500. This rebate program is applicable to both homeowners installing new panels and those expanding their existing PV system, making it an excellent choice for those seeking to enhance their energy efficiency.

Moreover, residents of San Diego can take advantage of the Green Building rebate program, which presents another compelling opportunity. This program aims to promote sustainable construction and renovation, allowing San Diego homeowners to reduce their permit fees by up to 7.5%.

Conclusion: ITC Credit and an Array of Programs and Rebates Make Solar a Sunny Deal

With the combination of a sunny CA climate, progressive energy policies, and a host of enticing rebates and programs, going solar in the Golden State is not only environmentally responsible but also financially rewarding. The ITC, as well as local and state-specific rebates and subsidies, make PV power adoption an undeniably sunny deal for CA homeowners.


Key takeaways

Jul 15, 2023
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