California is the country’s biggest solar energy powerhouse. According to the Solar Energy Industries Association (SEIA), the Golden State has installed 18,296 megawatts (MW) of solar – enough to power 4,732,000 homes! It’s no mistake that California has so much solar. Rebates and other financial incentives make solar a smart financial move for residents and businesses across the state.
Solar rebates and other financial incentives in California
One of the biggest incentives for solar in California is cash rebates paid to you by local governments and municipal utilities. Golden State homeowners across the country who are served by municipal utilities can cut their solar costs by $5,000 or more with California solar rebates.
California solar rebates for homeowners
|Entity||Residential Rebate Value||Maximum Amount||Average Cost Savings (5 kilowatt system)|
|City of San Francisco||$400/kW ($0.40/W)||$1,600||$1,600|
|City of Glendale||$1.29/W||Up to 50% of system cost||$6,450|
|Imperial Irrigation District (IID)||$0.50/W||(none)||$2,500|
|Los Angeles Department of Water and Power (LADWP)||$0.25/W||(none)||$1,250|
|Lodi Electric Utility||$1.45/W||$5,000||$5,000|
|Pasadena Water and Power||$0.30/W||(none)||$1,500|
|Riverside Public Utilities||$0.25/W||(none)||$1,250|
|Silicon Valley Power||$1.00/W||$10,000||$5,000|
(Note that, while they did offer rebates in the past, none of the three largest utilities in California – Pacific Gas & Electric, San Diego Gas & Electric, and Southern California Edison – currently offer any solar rebates.)
This table represents standard residential rebates offered by local governments and utilities in California. In the column “Average cost savings (5 kilowatt system),” we’ve calculated how much you can expect to save if you install a standard-sized 5 kilowatt system and take advantage of the rebate available to you. If you install a larger solar panel system, your rebate amount will increase accordingly for most programs (check the column “Maximum Amount” for any limits). If you are interested in commercial, nonprofit, or other rebates, click the link in the table to visit the program’s website.
Go Solar California offers additional rebates for affordable housing
When looking at solar programs on the West Coast, homeowners get the benefit of having access to one of the best renewable initiatives in the United States: Go Solar California. The Go Solar California program is sponsored by the California Public Utilities Commission, and offers financial incentives to encourage solar installations on affordable housing. Homeowners must be customers of Pacific Gas and Electric (PG&E), Southern California Edison (SCE) or San Diego Gas and Electric (SDG&E), and meet certain income restrictions, in order to be eligible.
Solar rebates for affordable housing in California
|Program||Rebate Value||Average Cost Savings (5 kilowatt system)|
|Single-family Affordable Solar Housing (SASH)||$3.00/Watt||$15,000|
|Multi-family Affordable Solar Housing (MASH)||$1.10/Watt to $1.80/Watt||$5,500 to $9,000|
|Solar for New Affordable Housing||$3.30/Watt to $3.50/Watt||$16,500 to $17,500|
Incentives for solar batteries in California
The program was recently overhauled in order to make it easier for homeowners to access this major financial incentive, and to explicitly support energy storage. SGIP offers as much as $500 per kilowatt-hour of solar battery capacity, which can dramatically reduce the cost of installing a home battery. Here’s an example of how much you could save with SGIP when you install a Tesla Powerwall:
The second-generation Tesla Powerwall has a 13.5 kWh capacity, which means that it is eligible for a $500/kWh incentive totaling $6,750. The list price for the Powerwall is $5,500. Supporting hardware costs $700, bringing equipment costs to $6,200. Tesla estimates that installation will cost an additional $800 to $2,000. Assuming that installation costs $1,000, the total price comes to $7,200. Subtract the $6,750 incentive and you’re left to cover just $450 of your battery costs.
Rebate amount: 13.5 kWh * $500/kWh incentive = $6,750 rebate amount
Total costs: $5,500 (list price) + $700 (supporting hardware) + $1,000 (installation) = $7,200 total cost
Calculating net price: $7,200 total cost – $6,750 rebate amount = $450 net price
Don’t forget about the Federal solar tax credit
When focusing on state-specific benefits of going solar, it’s easy to forget about the federal solar incentive that is making solar so appealing to homeowners across the country: the Investment Tax Credit, also known as the ITC. Now that the ITC has been extended through 2021, every homeowner who buys a solar panel system will benefit from a 30 percent discount on top of all additional state rebates and incentives.
Solar financing incentives for California homes and businesses
California has a great Property Assessed Clean Energy (PACE) offering in many cities and counties known as the Home Energy Renovation Opportunity (HERO) Financing Program. PACE financing allows homeowners to finance their PV installation and pay it back through their property taxes. In most cases, because the amount of money that homeowners save in electricity costs throughout the year will be significantly greater than the annual increase in property taxes, they see savings starting on day one.
California is one of only two states in the country where homeowners can use PACE financing. In addition to the HERO program, there are also many county-specific versions of this program such as Sonoma County’s Energy Independence Program – make sure to investigate the incentives available in your county.
California net metering: a major incentive to go solar in the Golden State
Net metering is one of the biggest incentives for solar across the country, because it allows homeowners and businesses to send excess solar energy back to the grid in exchange for credits on their electric bill. The California Public Utilities Commission (CPUC) decided at the end of 2015 that they would lift the existing cap on net metering, making it available for years to come.
The CPUC also implemented some changes to the policy, bringing about net metering 2.0. However, the key benefit still remains: solar energy system owners can “bank” credits when their solar panels produce more than they need, and draw down on those credits when their panels aren’t producing enough to meet their monthly use.
Get customized solar quotes for your home, including rebates and other incentives
Solar rebates and incentives are an important part of the equation, but if you want to understand exactly how much solar will cost for you, the best way is to start getting free no-obligation quotes from solar installers near you. On the EnergySage Marketplace, you can access pre-vetted California solar installers local to your home or business, compare their offers side-by-side, and find the best deal for your home.