California Solar Incentives, Tax Credits And Rebates Of 2024 – Forbes

Golden State residents can take advantage of several great solar incentives in California. The programs below can help you save a lot of money on the installation—and earn money back through rebates and net metering. We’ll even show you how to get free solar panels in California through a couple of local incentives.

Federal Solar Tax Credit

While there is no California solar tax credit at the state level, CA residents can take advantage of the ongoing federal solar tax credit on their income taxes. This is officially called the Investment Tax Credit (ITC), and it’s worth 30% of the total installation cost. For instance, if you spent $10,000 on solar panels, you’d earn an ITC of $3,000.

It’s a nonrefundable tax credit, so depending on your tax liability, you may not get the full tax credit when you file. However, you can roll over the remaining funds from that credit into future tax filings. If you need help claiming the tax credit, we recommend working with a tax professional.

The federal solar tax credit will not last forever. Under current law, the 30% tax credit will last through 2032. For the 2033 tax year, it drops to a 26% credit, and for 2034, it decreases again to 22%. After that, the tax credit will go away, unless the federal government extends it.

Self-Generation Incentive Program (SGIP)

The California Public Utilities Commission’s Self-Generation Incentive Program (SGIP) offers rebates to residents for installing a solar battery along with the solar panel. The rebate amount varies depending on battery storage capacity and the local utility company.

Property Tax Exclusion

California currently excludes solar panel installations when assessing the value of your property. That means solar panels, though they do increase your home’s value, will not increase your property taxes. This exclusion will expire on Jan 1, 2025.

Property Assessed Clean Energy (PACE) Program

Qualifying homeowners can get financing through the Property Assessed Clean Energy (PACE) program. In this program, you can finance your solar panel installation and pay back the loan with your property taxes.

This program comes with some caveats: You’ll have increased assessments of your annual property tax bills, and a lien will be placed on your home until you’ve paid off the loan, which can make it harder to sell your house when the time comes until you’ve made your last payment. These contracts can last 10 to 30 years.

Local California Solar Incentives

Golden State residents may be able to take advantage of additional CA solar incentives based on where they live—and some residents could even get free solar panel installation. Here are a few of the most popular:

Alameda Municipal Power Income Qualified Solar Rebate Program

Alameda customers with $106,000 or less of household income, whose house was built before 2020, are eligible for a $500 rebate when installing solar.

Lancaster Energy Power Choice Program

Lancaster Energy customers can get a free Tesla solar panel and Powerwall installation with no upfront cost. Instead, you’ll pay for the energy the system produces, plus a monthly battery payment. You’ll still get a monthly electric bill from Lancaster Energy.

LADWP Solar Rooftops Program

The Los Angeles Department of Water and Power offers another way to get solar panels installed for free. The company will install and maintain the solar panels — and pay you between $240 and $600 per year to lease your roof space. Your electric bill will be unaffected, but you’ll earn some extra cash each year and use your valuable roof space to contribute to California’s solar expansion.

San Diego Building Permits

San Diego County is currently waiving the cost of building permits for residential solar panel installations.

Silicon Valley Power Income-Qualified Solar Grant Program

Customers of Silicon Valley Power may be eligible for a grant for solar panel installation. The program has myriad stipulations; consult directly with the company to learn more.

SoCalGas ENERGY STAR Solar Thermal Water Heating System

SoCalGas customers who install a solar thermal system can get a rebate of $2,500 to $4,500.

Net Metering In California

California is in its third iteration of its Net Energy Metering (NEM) program, called NEM 3.0. This net metering program allows residents who generate power via renewable energy sources (such as solar) to sell excess energy back to their utility company.

NEM 3.0 seriously reduced the buyback rate for solar energy, however — by 75%. Residents previously earned roughly 30 cents per kilowatt but now only receive 8 cents for the same amount of power. Solar advocates continue to fight this restructuring of the program, which has led to major job loss in the solar industry throughout the state.

Past California Solar Panel Incentives

Because California was a pioneer in the solar panel movement, it also has some of the oldest solar panel incentive programs — many of which have now expired. Among some of those programs that the Golden State has now ended are:

• California Solar Incentive (CSI): This program closed at the end of 2016. Because solar panel costs dropped significantly, the California government no longer saw the need for this major rebate program.
• CSI-Thermal Program: Previously, California residents could get rebates for replacing electric- or gas-powered water heaters with a solar thermal system. This California solar rebate ended in mid-2020, however.
• Single-Family Affordable Solar Homes (SASH) Program: This program provided additional incentives for solar installations on single-family homes, but California closed the program in 2022.
• Multi-Family Affordable Solar Housing (MASH) Program: Similarly, this program is closed to new applicants but provided incentives for solar panel installations on multi-family homes.

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