If you live in California, you may have noticed all that glorious sunshine. Why not make that sun work for you by switching to solar power for your home? And it’s not as expensive as you would think to go solar, especially because there are several California solar incentives available to homeowners that make the choice easier. And if you’re having a hard time figuring out what solar incentives are available to you and what they all mean, we have good news for you: we’re about to break it all down for you in this Guide to California Solar Incentives.
In this guide, we will go through every solar incentive in California and what it means for you, a homeowner interested in going solar.
Here’s what we’ll cover:
- Why California is the best state for solar
- What solar rebates are available in California?
- All about NEM
- Is there a California tax credit for solar?
- What is the SGIP?
- How solar panels increase the value of your home in California
- California solar panel property tax exemption
Ready to dive into all the incentives for going solar? Let’s get started.
Why California is the best state for solar
California is the nation’s leader when it comes to solar power. California has the largest number of solar installs in the nation (over 1 million), the highest percentage of electricity generated from solar (over 22%), and comes in first place in national growth projection (SEIA.org).
As of 2020, California currently ranks 1st in the nation in terms of total installed solar capacity at 28,471 MW.
California is also the nation leader in blackouts, crowned the ‘Blackout Queen’ in 2018 by Eaton’s Blackout Tracker research. This was thanks to the over 4,297 blackouts within the last decade.
If you live in California and have been wondering if switching to clean, renewable solar energy is right for you, you’ve come to the right place. We answer all of your questions and help you decide if solar panels are right for you.
What solar rebates are available in California?
Solar rebates are offered through your utility company and provide money back to customers who have chosen to go solar. This varies depending on your location and who your utility provider is. For California, the following rebates are available.. ?
The most valuable program offered through your utility company is something called net metering. Keep reading, we’re about to get into that next.Free Solar Quote
All About NEM
California has a generous net metering program called NEM 2.0. This was put in place in 2016 by the California Public Utility Commission. This new policy maintains the key components of the first policy which includes the ability of solar panel owners to sell back any unused energy to their utility company. In California, it works like this: for every kilowatt-hour (kWh) of solar electricity you feed into the grid, you get a bill credit for one kWh of utility-generated electricity.
According to the California Public Utilities Commission, here is the outline of NEM 2.0:
- Pay a one-time interconnection fee. Customer-generators with facilities under 1 MW must pay a pre-approved one-time interconnection fee based on each IOU’s historic interconnection costs. PG&E fee is $145; SCE $75; and SDG&E $132. Customer-generators with PV systems over 1 MW must pay $800 interconnection fee and pay for all transmission/distribution system upgrades.
- Pay non-bypassable charges. Customer-generators, similar to other utility customers, will pay small charges on each kilowatt-hour (kWh) of electricity they consume from the grid. These charges fund important programs such as low-income and energy efficiency programs.
- Transfer to a time-of-use (TOU) rate. If a customer-generator is not already on one, they will be required to take service on a TOU rate to participate in NEM.
What does all of this mean for you, a homeowner that’s considering going solar? It means with the right size system, you can drastically reduce, zero out, or come out with a negative electricity bill each month.
To view SCE For Time of Use rate comparisons, see Southern California Edison’s web site
Is there a California tax credit for solar?
There is not a California tax credit for going solar; however, there is a federal tax credit for going solar that is very generous.
Federal Solar Tax Credit
Through 2022, Americans in any state, California included, can take advantage of the most popular incentive for going solar – the Solar Investment Tax Credit. This tax credit, also known as the ITC, is offered by the federal government and allows for 26 percent credit on a whole home solar system. Yes, that means even on a solar battery too!
Speaking of batteries, let’s talk about the incentive for homeowners who choose to protect their energy with a solar battery next.
What is the SGIP?
The Self Generation Incentive Program, or SGIP, provides perhaps the best incentives for California homeowners to install energy storage systems.The program is one of the first incentives of its kind in the US. It has been extremely successful in helping California lead the nation in the adoption of home battery technology. The program is paid for and available to the utility ratepayers of SDG&E, SoCal Gas, SCE, and PG&E.
There’s a more than $1 billion budget for SGIP incentives available in California through 2024. Nearly 60% of the SGIP budget is dedicated for “Equity Resiliency” projects.
If you’re a homeowner that meets one of the following qualifications, the Equity Resiliency projects portion of the SGIP could work for you:
- Low-income customers
- those living in high fire risk areas
- and customers who experienced Public Safety Power Shutoff events on two or more specific occasions
All of this can be a bit overwhelming so we’d be happy to have one of our experts help you navigate the SGIP process – it’s part of what we do!
How solar panels increase the value of your home in California
Make money in more ways than one when you have solar panels installed on your home in California.
In addition to saving money every month on your utility bill and earning money from Net Metering programs, with solar panels you can also bring in some serious extra cash if you decide to sell your home! The added value of solar panels on residential properties has been extensively studied by the US Department of Energy and National Renewable Energy Laboratory (NREL),. In their comprehensive report, they found that on average, solar panels add $20 of value for every $1 you save on your electric bill.
Confirming this conclusion, the Department of Energy and Berkeley Laboratory determined solar-enabled homes did in fact perform better in the real estate market. Their 2015 report analyzed 22,000 homes and found that those with solar panels sold for a higher asking price than those without solar. Depending on your home and residential solar system of course, the average was about $15,000 or $4/watt.
Sell not only at a higher price but faster!
Your home won’t sit out on the market as long with solar panels. In another study done by NREL, they found that solar properties earned about 17% more at closing, in addition to selling 20% faster. Having solar panels basically makes sure it’s always a sellers market for you when it comes time to let go of your home.Free Solar Quote
California solar panel property tax exemption
A common motivation for investing in a home solar panel system is the resulting benefit of your property value increasing due to them. Naturally one would think an increased property value=increased property taxes. But that’s not the case in California. Another California solar incentive is the Property Tax Exclusion for Solar Energy Systems. This tax exclusion exempts 100% of the assessed value of the solar system from the homeowner’s property taxes.
There you have it: Solar Panel California Incentives and Why Solar Panels are Worth it in California
All that being said, it’s pretty easy to see why going solar in California is worth it. Not only do you get to power your home with all that sunshine, you also get more control over your home’s energy and rising electricity costs. Not just now, but forever!
And in case you needed any more reasons, here’s more!
Protection from blackouts.
California has the most amount of blackouts in the nation, clocking in over 4,000 in the last decade, and climbing (Eaton).
Solar is the new normal.
As of 2020, solar is now mandatory on every new home build in California. Don’t be left in the dark when everyone else on your block is harnessing the power of the sun, especially during all those blackouts.
Offset your carbon footprint.
Renewable energy is good for the environment: it produces no waste in the air, oceans or land, unlike harmful oil and gas. California is one of the most progressive states in the nation for renewable energy policies, and ranks second only after Washington for installed renewable energy capacity.
Solar technology advancements.
As with any other technology, the more it develops, the more affordable it becomes. The solar technology field has made huge advancements over the last few decades making it more reliable, affordable and more appealing than ever. Whether it’s the newest solar panel technology, or the Tesla Powerwall battery, you’ll be satisfied with your purchase. Choosing a solar installer (like ADT Solar) who only uses the latest technology with the most reputable brands will give you peace of mind in your investment. Plus, we put the power in your hands with advanced app monitoring technologies.Free Solar Quote