California offers generous solar incentives that can significantly reduce the cost of solar energy.
If you are a resident of California and are considering the installation of solar panels, there are multiple incentives available to help reduce the cost of your system, including a property tax exclusion, rebates on solar battery purchases, and net metering.
To maximize savings, you can combine these incentives with the 30% federal tax credit, a national benefit covering both solar panels and batteries.
Around 91% of the 120 California residents surveyed in October 2023 by the MarketWatch Guides team have used at least one incentive to lower the cost of solar installations.
Keep reading for more information on the solar incentives California offers and check if you meet the requirements.
State solar incentives in California
Research on state solar incentives indicates that California offers the following programs to help homeowners save on solar installations.
Many of the solar incentives offered by California in the past concluded in 2023.
According to research, the only remaining state incentive is the solar property tax exclusion, which ends after 2024.
The Single-Family Solar Homes in Disadvantaged Communities Self-Generation Incentive Program (DAC-SASH) is only available to specific communities, while the Self-Generation Incentive Program covers energy storage but not solar panels.
Single-family solar homes in disadvantaged communities self-generation incentive program (DAC-SASH)
Incentive value: $3 per watt of solar capacity ($3,000 per kilowatt)
Frequency: One-time use
The DAC-SASH program offers solar incentives for low-income homes that meet specific eligibility criteria.
The average cost of solar installation in California is $2.51 per watt, while this program provides an incentive of $3 per watt.
In other words, the DAC-SASH incentive can cover the total cost of most solar panel systems.
Eligibility:
The housing is located in one of the most disadvantaged communities in the bottom 25% of the state, according to the California Environmental Assessment Tool.
The owner is a customer of Pacific Gas & Electric (PG&E), San Diego Gas & Electric (SDG&E), or Southern California Edison (SCE).
The applicant has a family income below CARE income guidelines.
From June 2023 to May 2024, the limit is $39,440 for a one or two-person household and increases for larger households.
How to apply:
The DAC-SASH program is managed by GRID Alternatives in California as part of their broader “Energy for All” program.
You can apply directly online, and this program will be available until 2030.
Self-generation incentive program (SGIP): small residential storage
Incentive Value: $0.15 per watt-hour (Wh) of battery storage capacity
Frequency: one-time use
The SGIP offers rebates for energy storage systems in California.
Homeowners can install battery banks along with solar panels to create a 24/7 usable power supply during the night, cloudy days, or power outages.
Although it is not necessary to combine the battery with solar panels to qualify for the SGIP, state authorities recommend it.
As of December 2023, the SGIP specified an incentive rate of $0.15 per watt-hour for small-scale residential batteries.
For example, a Tesla Powerwall battery with a storage capacity of 13.5 kWh (13,500 Wh) could qualify for an incentive of $2,025.
Eligibility:
To qualify for the SGIP energy storage incentive, you must be a customer of one of the following utility companies:
PG&E
SDG&E
SCE
Southern California Gas (SoCalGas)
The SGIP incentive is available for both homeowners and renters (with landlord approval).
How to apply:
SGIP offers incentives for energy storage through approved installers.
The program has an online tool that you can use to search for and contact qualified battery installers in your area.
SGIP: residential equity storage
Incentive value: $0.85 per watt-hour of battery storage capacity
Frequency: one-time use
The SGIP has a category of “Residential Equity Storage” for low-income households, medically vulnerable users, and communities at risk of power outages due to wildfires.
This category has a higher incentive rate of $0.85 per watt-hour. For example, a 13,500 Wh battery, like the Tesla Powerwall, could qualify for an incentive of $11,475.
Eligibility:
The Residential Equity Storage incentive has the same requirements as the previously described SGIP incentive. However, it is only available for electricity consumers who need it, including:
Low-income households
Medically vulnerable households
Communities at risk of power outages due to wildfires
The SGIP Residential Equity brochure provides a detailed description of all households qualifying for the increased $0.85 per watt-hour incentive.
You can also check the California Community Resilience Program’s risk map to determine if you qualify.
How to apply:
Applications for the residential equity Storage incentive are made through the same online interface used for the SGIP.
Solar property tax exclusion
Incentive value: 100% exemption from property taxes on residential solar energy systems
Frequency: annual
The Solar property tax exclusion is a tax incentive that excludes the added value of residential solar energy systems from property tax calculations.
This can result in significant savings over time. However, note that this incentive is scheduled to conclude after 2024.
Eligibility:
All residential solar energy systems installed before January 1, 2025, regardless of size or capacity, are eligible for the Solar Property Tax Exclusion.
How to apply:
The solar property tax exclusion is automated and applies automatically in the property tax assessment.
How to claim incentives and request refunds
- Research eligibility: before applying for incentives, carefully review the eligibility criteria for each program.
- Select a qualified installer: work with a licensed and qualified solar installer familiar with the application process for California incentives.
- Complete and submit applications: follow specific application processes for each incentive program, submitting all required documentation and information.
- Monitor the status of your application: track the status of your application and promptly respond to any requests for additional information.
- Receive approval and install the solar system: once approved, proceed with the installation of your solar energy system by the selected installer.
- Claim the federal tax credit: after installation, claim the 30% federal tax credit by filing IRS Form 5695 with your federal tax return.
- Enjoy ongoing savings: benefit from reduced energy bills, savings on property taxes, and possible additional incentives offered by local utility companies.
Discover how solar incentives in California with Babio make solar energy an affordable reality
Taking advantage of solar incentives in California can significantly reduce the cost of installing solar panels and energy storage systems, making renewable energy more accessible for homeowners.
By combining state and local incentives with the federal tax credit, you can have a positive impact on both the environment and your finances.
Remember to thoroughly research each program, work with reputable installers, and meet application deadlines to maximize your savings.
As the solar industry continues to evolve, stay informed about new incentives and changes to existing programs that may further enhance the affordability of solar energy in California.
At Babio, we understand the importance of providing you with key information on solar tax credits and how to make the most of this opportunity to save on solar panel installation.
With us, you not only access relevant data but also receive expert guidance to maximize the financial and environmental benefits of your transition to solar energy in California.
Disclaimer:
The information provided in this guide is based on research conducted until January 2024. Incentive programs and eligibility criteria may change, so it is essential to verify current information with official sources before making decisions.
Always consult with tax professionals and relevant authorities for accurate and updated guidance on solar incentives and tax credits.
Switching to solar energy with Babio will not only benefit you but also the environment.
Take action now to seize these incentives and make a positive choice for the future!
