California Solar Panel Incentives: Tax Credits, Rebates, Financing and More

California has a history of offering incentives for residential solar. However, with the recent decision to lower net metering rates, some are questioning the state’s commitment to solar energy. Despite this, there are still a number of incentives available for those looking to install solar panels and save money in California.

California State Solar Tax Credits and Incentives

California provides several incentives, credits, and rebates for its residents who invest in solar energy systems. One of the notable incentives is the property tax exclusion. Under California law, qualifying active solar energy systems are exempt from property tax increases. This exclusion is set to expire on January 1, 2025.

Another incentive is the Self-Generation Incentive Program, which offers rebates for installing solar batteries. Utility customers of the four major investor-owned utilities are eligible for this program. The rebates are based on the kilowatt-hour capacity of the solar storage system, with a current rate of $200 per kilowatt-hour.

In addition, California offers incentives for low-income customers in disadvantaged communities through the DAC-SASH program. Eligible customers can receive up to $3 per watt in incentives for solar installations, which can amount to significant savings considering the current cost per watt of solar panels in California.

California also has net metering incentives, which allow homes with solar installations to receive monetary compensation for excess solar energy sent back to the grid. The recent changes in net metering rules decreased the credit value for surplus energy by 75%. However, higher electricity rates during peak demand and limited access to renewable energy make solar batteries more valuable under the new net metering plan.

PACE financing is another option for financing solar panel installations in California. It provides loans that can be repaid through property taxes over a period of 10 to 30 years. Unlike traditional mortgage loans, PACE loans require no down payment or monthly payments. However, there is a lien placed on the home until the loan is fully paid off, which can make selling the home more complicated.

Local Solar Tax Credits and Incentives in California

In addition to state incentives, many cities and municipalities in California offer their own incentives for residents who invest in solar energy. For example, Alameda Municipal Power provides a rebate for income-qualified customers who install solar panels. The city of San Diego waives building permit fees and plan check fees for residential solar installations. The Los Angeles Department of Water and Power’s Solar Rooftops Program installs and maintains solar panels on homeowners’ properties at no cost, providing an annual payment to the homeowner.

Moreover, publicly-owned utilities in California offer various incentives and rebates for energy-efficient appliances, including solar attic fans. Customers of these utilities can receive rebates for purchasing and installing solar attic fans, helping to cool down their attics and reduce energy consumption.

Federal Solar Tax Credits and Incentives for Californians

The federal solar tax credit, also known as the Residential Clean Energy Credit, provides a 30% tax credit for qualified solar installation costs. This federal tax credit can be more valuable than the state and local incentives offered in California. To claim the tax credit, individuals need to fill out IRS Form 5695 and include it with their tax return for the year in which they installed their solar system.

California Power Purchasing Agreements and Community Solar Programs

For those who don’t want to install solar panels themselves, California offers power purchasing agreements and community solar programs. Power purchasing agreements allow another company to install solar on the homeowner’s property and charge a predetermined amount for the solar energy generated. Community solar programs allow individuals to access solar energy without installing panels on their property. Instead, electricity comes from a shared solar installation.

In conclusion, while California’s recent changes to net metering rates have raised concerns about the state’s commitment to residential solar, there are still a variety of incentives available for those interested in installing solar panels. These incentives include property tax exclusions, rebates for solar batteries, net metering compensation, PACE financing, and various local incentives. Additionally, the federal solar tax credit provides a significant financial benefit for those who invest in solar energy. Power purchasing agreements and community solar programs are also viable options for individuals who prefer not to install solar panels on their own property.

Source: California Solar Panel Incentives: Tax Credits, Rebates, Financing and More – CNET