Are you considering investing in residential solar panels in California? You’re not the only one.
Research shows that California was ranked number one out of 50 states in 2022 for solar power generation, with more than 11 million homes powered by the sun. A major reason why solar power is popular statewide is that prices have dropped by 54% during the past decade. Several California solar incentives are also driving the push for California solar panels.
Solar incentives in California, like the California Solar Tax Credit, are impacting finances by saving homeowners money and fueling the state’s renewable energy sector. The adoption of solar is contributing positively to California’s clean energy goals.
Let’s explore the incentives for installing rooftop solar on your home in 2023.
California Solar Tax Credit
The Federal Solar Investment Tax Credit (ITC) is available for California homeowners who install solar panels on their rooftops. You may claim this tax credit on your income taxes for a portion of your solar system’s cost. The system must be installed in the tax year for which you want the solar credit.
California residents who installed their systems in 2021 or 2020 may receive a 26% credit. The U.S. Congress in 2022 extended the ITC, increasing the credit to 30% for any solar system installed between 2022 and 2032. Any system installed before or on Dec. 31, 2019, also qualifies for the 30% credit.
The ITC will drop from 30% to 26% for any system added in 2033. Homeowners who install systems the following year will receive a 22% credit instead. This credit will expire in 2035 if it’s not renewed in Congress.
Homeowners who purchase (with cash or a loan) and install their solar systems between 2017 and 2034 may claim the federal credit. Leased systems aren’t eligible for the credit. The following costs are included in the ITC:
- Solar panels
- Mounting equipment, inverters, and wiring
- Sales taxes
Contractor expenses may be included, too. These include costs related to assembly, installation, inspections, and permitting.
The ITC has helped boost the number of residential and commercial installs in California and other states. More than $90 billion was invested in solar power in California in 2022.
This has spurred job creation and economic growth statewide. California in 2022 had more than 2,300 solar companies featuring more than 1,100 developers and installers. How do you know which one is the best for you and who to trust?
Give Power Wizard a call at 866-734-0439 to receive a free rooftop solar system quote, custom to your home and energy usage.
California Solar Incentives: Net Metering
A key solar incentive available to California homeowners is net energy metering, or NEM. Participating homeowners get bill credits for the excess energy they generate and send back to the grid. This energy goes to the grid since they don’t need it.
NEM offers several benefits. These include reduced bills and potential revenue generation, as you may earn money if a bill reduction isn’t enough to compensate you for the amount of energy you’re sending back to the grid.
Net metering also benefits solar in the future. It encourages homeowners to rely less on fossil fuel sources (e.g., gas and coal), reducing their carbon footprints. This is expected to continue to increase Californians’ demand for solar power, boosting the state’s “green” economy.
Another advantage of NEM is that it may enhance your home’s value. Prospective buyers may be willing to pay top dollar for your home since it generates cash flow through net metering.
More Incentives For Solar Panels in California
Utility and municipal incentives are available for California homeowners who install solar panels. These programs include the following:
- Cash rebates
- Performance incentives
- Low-interest loans
What do these incentives involve? Let’s examine what they offer and how to claim them.
Solar Power Cash Rebates
You might be installing a solar system at your Rancho Mirage, California, home. Take advantage of a $500 rebate to cover your system permit fee through the city’s energy authority. You’ll receive the rebate once the utility grants you permission to do the installation.
Live in Sacramento? A $300 rebate is available to local utility district customers who install residential solar systems.
Solar Energy Performance Incentives
The Performance Based Incentive, or PBI, is available through the California Solar Initiative, or CSI. The state will pay you for your solar system’s performance through this rebate program.
You’ll receive incentives monthly over five years. Your contractor might have to submit a claim form with supporting documentation related to your system to your power company.
The utility company may then inspect your solar system before approving your claim form. Your first payment may come a month after your initial utility meter reading.
Low-Interest Solar Power Loans
Are you searching for low-interest loans for solar power systems in California? There are several options.
Mosaic offers fixed-rate solar loans with flexible terms and no fees. Borrow as much as $100,000, and pay the loan back over a decade to two decades.
Sunlight Financial is another solar financing option. This company’s loans come with competitive rates and zero prepayment penalties. The lender will give you as much as $65,000, which you can pay back over five to 20 years.
CaliforniaFIRST is a program that will let you finance your project using your home’s property taxes. You may borrow 15% of the property’s value and repay it over five to 25 years.
California Solar Panels: RPS
California’s Renewable Portfolio Standard, or RPS, is a policy requiring every energy provider to get 60% or more of their power from eligible “green” sources by 2030. These sources include the following:
- Solar
- Wind
- Geothermal (using energy from the earth to produce power)
- Hydroelectricity (using water to generate power)
This ambitious policy demonstrates the state’s commitment to a cleaner energy future. It aims to encourage utilities to set renewable energy goals and promote incentives like net metering to their customers.
California Solar Incentive Program
The Self-Generation Incentive Program, or SGIP, may also benefit your bottom line as a solar system owner in California. This program will give you a rebate covering between 15% and 20% of your solar system battery storage cost.
Battery storage will make your house more resilient if the power goes out since you’ll have energy to draw from to power your home. This energy might last for days depending on your energy usage, weather conditions, and battery size. A storage provider can help you determine the best option for your household’s unique needs.
Property Tax Benefits For Solar Systems
Property tax exclusion is yet another incentive for California homeowners who choose solar power systems. The state won’t assess installed solar panels for tax payments.
The exclusion increases a home’s value without boosting its tax bill. It remains in effect until late 2026 after being extended in 2021.
Give Power Wizard a call at 866-734-0439 to receive a free rooftop solar system quote, custom to your home and energy usage.
Low-Income Solar Power Benefits
Are you searching for solar power incentives for low-income customers? California Solar Incentive (CSI) offers three subprograms that may meet your needs. These are:
- CSI-Thermal
- MASH
- SASH
The CSI-Thermal rebate for people with low incomes benefits single-family-home customers in the San Diego Gas and Electric (G&E), Pacific G&E, and Southern California Gas Company service territories. The MASH program is for multifamily solar energy system owners in the PG&E, San Diego G&E, and Southern California Edison, or SCE, territories.
The SASH program is designed for low-income single-family homeowners. You must be a customer of the PG&E, SCE, or SDG&E territory to receive this program’s rebate.
Economic and Environmental Impact
Solar panel installation incentives have major economic and environmental effects in California. They influence job creation, reduce greenhouse gas emissions, and benefit energy resiliency.
Solar Job Creation
California led the nation with almost 125,000 solar energy jobs in 2020. Expect an increase in solar energy job opportunities as the state continues to promote solar power during the next few years.
Solar incentives are creating several types of jobs including the following roles:
- Manufacturing tech
- Solar sales rep
- Solar power design engineer
Other jobs being created through solar power incentives include solar power consultant and solar power system installer roles. Additional positions range from solar energy project manager to solar energy system designer.
Reduced Greenhouse Gas Emissions
Incentives for residential solar power are helping reduce greenhouse gas emissions across California. The state’s aggressive “green” targets, including its incentives, helped it surpass its 2020 goal for combatting climate change. California’s greenhouse gases dropped to their 1990 level several years ahead of the goal.
The state still needs to pick up its pace to trim emissions by 40% more before 2030. Solar incentives are a vital part of this effort, enabling California to remain a climate leader nationwide and worldwide long-term.
Residential Energy Resiliency
Solar panels combined with battery storage offer a more resilient power solution for California homeowners. This is especially true in areas where the fire risk is high and electrical lines provide energy. Solar systems can also prevent or reduce power outages for businesses and homes.
Help With Solar Incentives In California
Are you ready to install residential solar panels in California? Today’s top California solar incentives include a California solar tax credit. Other solar incentives in California include net energy metering, municipal and city incentives, and property tax benefits. Not sure which benefits you would qualify for?
At Power Wizard, we work with the top solar installers that can design and install the perfect solar system for your house and budget. This will help you become less dependent on the grid and protect the earth while you’re at it. Learn more here when it comes to solar energy systems in California and get a free quote today.
