For Home Owners

A Guide to Solar Rebates, Incentives and Tax Credits in California

Sep 10, 2019
Design Everest

If you are planning to install a solar generation or heating system, you may feel like you’re late to the party. Most solar rebates have expired. So has the state tax credit. The prized 30% federal solar tax credit is slated for a significant reduction, and net metering credits are a fraction of what they used to be.

With all these factors in mind, you may wonder whether there are any incentives left to help you pay for your solar system.

The answer is yes, there are still plenty. By taking advantage of the federal tax credit, California’s solar property tax exemption, local rebates, net metering, and financing mechanisms, you should be able to economize on your new solar system.

Federal Tax Credit

The federal solar tax credit, officially the Investment Tax Credit (ITC), allows a deduction of 30% of the cost of a solar energy system from the 2019 federal income tax. The credit applies to both residential and commercial systems and does not have a cap.

If there was ever a time to install a solar energy system for your home or business, 2019 is it. This is the last tax year to take advantage of the 30% credit. In the 2020 tax year, the ITC decreases to 26%, followed by a cutback to 22% in 2021. From 2022 onwards, the ITC applies only to commercial systems, and drops to just 10%.

California State Incentives

Property Tax Exemption

California offers a 100% property tax exemption for some types of energy systems installed between January 1st, 1999 and December 31st, 2024. The exemption applies to residential, commercial and industrial properties. Eligible installations include space conditioning, water heating, thermal electric, thermal process heat, and photovoltaic systems.

Single Family Home Affordable Solar Housing (SASH)

The SASH program aims to help low-income households. Under the program, eligible customers get an upfront credit of $3 per watt of system capacity. To qualify, customers must:

  • own and live in their home
  • receive electrical service from Pacific Gas & Electric, Southern California Edison, or San Diego Gas & Electric
  • live in a home defined as “affordable housing” by the California Public Utilities Code 2852
  • household income shall not exceed 80% of Area Median Income
  • residence must comply with the California Public Utilities Code 2852

To confirm your eligibility and initiate an application, click here.

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Local Incentives

San Francisco’s GoSolarSF is one of the few remaining solar rebates in California. Under the program, qualifying residential, commercial and non-profit customers can receive onetime rebates to help reduce the costs of their solar projects.

Residential customers who wish to take advantage of GoSolarSF must meet the following eligibility criteria:

  • be enrolled in the CleanPowerSF program, or be an existing Hetch Hetchy customer at the time of application
  • the site of the solar installation must be within San Francisco city limits
  • only certified installers can perform the work
  • minimum system size is 1kW CEC-AC
  • system must be secured to a permanent surface
  • building must have had an energy audit performed within the last 3 years, or have proof of Title 24 energy efficiency compliance issued within the last 3 years
  • proof of interconnection to local power grid is required before the rebate is issued

Commercial customers are subject to the same requirements, but must perform an energy audit before applying for the GoSolarSF program.

Whether you are a residential, commercial or non-profit customer, if you’ve had your system installed within the last year you may qualify for a retroactive rebate.

The rebate amount is based on the size of the solar system and offers a set dollar amount for each kilowatt the system can generate. The tables below show residential, commercial and non-profit incentive levels and caps for 2019. Note that the incentive amount cannot exceed 95% of project costs, and the customer must contribute at least 5% towards the cost of their solar project.

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Net Energy Metering

Net Energy Metering is offered by most utility providers in the State. Under the program, you get credits when your solar system generates more energy than you use and the net surplus is deposited into the grid.

The rates at which utilities credit back the net surplus energy vary by company. For example, San Diego Gas & Electric offers credits at full retail rates, meaning you pay $0.22 per kilowatt-hour (kWh), and get credited $0.22 for each kWh you contribute to the grid. If you live in Modesto, however, you are paying roughly $0.18 per kWh, but your net energy metering credit is a mere $0.08 per kWh.

Contact your local utility provider to find out the applicable net energy metering rates and confirm that your solar project is eligible.

Property Assessed Clean Energy Financing (PACE)

PACE is a financing system available throughout California, aimed at helping homeowners pay for green initiatives. It provides low-cost, long-term financing for various renewable energy projects, including solar systems. Get in touch with your local authority to find out whether your solar project qualifies for PACE financing.

The Future of Solar Incentives

Over the past few years, the cost of solar systems has decreased by almost 50%, and with the adoption of the 2019 Building Energy Efficiency Standards in January 2020, solar systems will be mandatory for all new residential buildings 3 stories or less.

These developments leave little justification for continuing solar incentive programs. Most of these incentives are already exhausted, and the remaining few will expire soon. With the federal solar tax credit also set for a steep decline, 2019 is the last year to capitalize on the surviving solar credits and incentives.

If you are planning to install a solar energy generation or heating system, Design Everest can help. We design the mounting supports to suit your roof and the solar panels of your choice. We can guide you through the permitting process to ensure that your solar system is installed as soon as possible. Our team can also advise you on the available solar incentives, credits and exemptions. Call us at (877) 892-0292 for a FREE consultation and quote.

Sources:
[1]https://bestcompany.com/solar/blog/california-solar-guide
[2]https://www.electricitylocal.com/states/california/modesto/
[3]https://www.energysage.com/net-metering/sdge/
[4]https://gridalternatives.org/what-we-do/program-administration/sash
[5]https://www.mid.org/solar/documents/NetEnergyMetering2.0FactSheet.pdf
[6]https://news.energysage.com/congress-extends-the-solar-tax-credit/
[7]http://programs.dsireusa.org/system/program/detail/558
[8]https://sfwater.org/modules/showdocument.aspx?
[9]https://sonomacounty.ca.gov/General-Services/Energy-and-Sustainability/PACE-Financing/

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