There are a variety of California Solar Tax Credits, Rebates and Incentives available to homeowners to promote adoption of residential solar. As the leading state for solar in the U.S., there are a variety of favorable financial rewards for those who install solar panels.
Renewable Investment Tax Credit
Also known as the Federal Solar Tax Credit, this allows taxpayers to claim a 30% tax credit on qualified expenses associated with the installation of their solar panel system. These expenses include: on-site installation labor costs, assembly or system installation, and wiring or piping which connects the solar panels to the house.
In other words, the government will subtract the amount that you pay for your solar system from the amount that you owe in taxes. There’s no limit to the amount of credit that can be received, and in the event that the tax credit is greater than your tax liability, the additional amount can be carried over to the next year. This incentive is currently set to expire December 31, 2016.
State – Property Tax Exclusion for Solar Energy Systems:
This tax exclusion is available for 100% of the system’s value and the program will be administered until December 31st, 2024. Under this tax code exclusion, solar energy producing equipment isn’t considered an added value to your property. Although solar systems may increase your property value overall, under this tax exclusion a new solar installation will not increase your current property taxes. This exclusion will remain in place until the property changes ownership – the exclusion cannot be passed onto a subsequent owner.
State/Utility – Net Metering
Net metering allows the homeowner and utility to track the electricity that is produced by the solar panels and how much energy the home consumes. If there is excess energy being produced by the panels that the homeowners’ don’t currently need, the energy will flow into the utility grid. The net meter will track this and the utility will credit the homeowner. All utilities in California (except LAWDP) are required to administer net metering incentives, and each utility has their own net metering policies.
Learn more about how Net Metering can increase your savings
State – Single Family Affordable Solar Homes (SASH)
SASH was created as a part of the California Solar Initiative (CSI), a state administered rebate program designed to distribute over $2 billion in incentives for solar projects. The general CSI program has closed since reaching its budgetary limit, however there is still funding left in the SASH program. This program is available to customer’s of Pacific Gas & Electric, San Diego Gas & Electric and Southern California Edison. SASH funding is specifically focused on low income residences, and the incentive awarded depends on the homeowner’s income level. Applicants’ total household income must be under 80% of the area median income. The program is currently set to expire on December 31st, 2021.
State – Multifamily Affordable Solar Housing (MASH)
MASH is also a part of the California Solar Initiative (CSI) program, and will also continue although the CSI program has expired. This program provides incentives to offset the costs of solar on multifamily affordable housing complexes. In order to qualify, the property must provide low-income residential housing and must have had an occupancy permit for at least two years. The incentive’s distribution is managed by Pacific Gas & Electric, Southern California Edison and the California Center for Sustainable Energy for San Diego Gas & Electric. The program is currently set to expire on December 31st, 2021.
State – CEC New Solar Homes Partnership
The California Energy Commission (CEC) is administering this rebate program to newly constructed homes with solar installations. The goal of this initiative is to install 360 megawatts of solar power on new homes and for 50% of new homes to have solar electric power by 2016. In order to be eligible, the home must be serviced by one of the following utilities: Pacific Gas & Electric, Southern California Edison, San Diego Gas & Electric or Bear Valley Electric Service. There are four tiers of incentives, and the rebate amount is determined by the type of housing (such as market-rate or affordable housing) and the systems’ expected performance. This program was launched in 2007 with a program budget of $425 million over 10 years.
To learn more about the specifics of each program, visit the Database of State Incentives for Renewables & Efficiency.
When it comes to switching to solar, the available incentives and rebates can make a big difference in its’ affordability. The above are the federal and state incentives available to California homeowners, however there are many local incentives as well which vary by your city or utility. The next step is seeing what installers are in your region.