Some of the incentives a California homeowner can take advantage of are the following:
Federal Tax Credit
Buy and install a new home solar system in California in 2021 and you could qualify for the 26% federal tax credit. The federal solar tax credit, also called the federal investment tax credit (ITC), allows homeowners and businesses to deduct 26% of the cost of installing a solar energy system from their federal taxes. The tax credit applies to the cost of materials and labor, applies to both residential and commercial systems, and has no cap on its value. If your tax credit exceeds your tax bill, the excess credit can be carried into the following tax year.
The solar tax credit is declining. In 2021, the solar tax credit is worth 26% but will step down again in 2023 to 22% for both residential and commercial solar energy systems. In 2024, the ITC will be eliminated for residential home solar systems but will remain at 10% for commercial solar projects.
Solar Energy System Property Tax Exclusion
Add a new home solar install or build a house with a solar panel system and your property taxes won’t increase until the end of 2024.
Home value increase of approximately 4.1% in California.
Self-generation incentive program (SGIP)
Buy a battery system along with solar panels in California and get a rebate for your home solar battery installation.
Single-Family affordable housing (SASH)
Eligible low-income households can receive a one-time up-front capacity-based incentive of $3,000 for every KW of home solar installed.
Households total income must be 80% of the Area Median Income (AMI) or less based on the most recent available income tax return.
Local Utility Company Rebates
Through City of San Francisco’s GoSolarSf program, residents can get a cash incentive of $100 to $2,000 per KW of home solar installed for up to 4 kW. Varies by system size, location, and applicant income.
SMUD offers a solar incentive of $300 to residential customers in Sacramento who choose to install a new home solar system.
Net Metering Credits
Once your grid-tied solar energy system has been installed, you may also earn credit with your local utility for the excess energy your system generates through net metering. Required for utility companies in the State of California, net metering is an attractive way to further maximize the financial benefits of your system after installation.