California solar rebates and tax credits calculator

Summary of California solar incentives 2024

2023 is shaping up to be a year of huge changes for residential solar energy programs in California. The state Public Utilities Commission has recently ruled on Net Energy Metering, or NEM 3.0, the energy billing arrangement under which solar panel owners earn credit for their excess energy that they can later use to offset energy the draw from the grid at night. The changes will result in much worse financial returns from solar for people who get panels installed after the new rules take effect.

On this page, we cover all of the solar and battery incentives, rebates and tax credits available for your California home solar installation. We also provide guidance on how low income solar power programs work.

We also encourage you to use the California solar incentives calculator above. It allows you to drill down and show only the solar incentives that are applicable where you live.

Federal solar investment tax credit

The federal solar investment tax credit will have the biggest impact on the cost you will face to go solar in California

If you install your photovoltaic system before the end of 2032, the federal tax credit is 30% of the cost of your solar panel system. This is 30% off the entire cost of the system including equipment, labor, and permitting.

Example: If your solar energy system costs $20,000, your federal solar tax credit would be $20,000 x 30% = $6,000.

The federal tax credit falls to 26% starting in 2033.

Net energy metering in California

With net metering in some states, you get full retail rate credit for the amount of electricity you send back into the grid with your solar panels.

With net metering, or “net energy metering” (NEM), you get credit for the electricity you send back to the grid with your solar panels. Under the state's current rules, called NEM 2.0, that credit is based on the retail rate of electricity, meaning the energy your solar panels make goes to reducing your electric bill by a lot. 

The amount of kilowatt hours (kWh) you send to your local utility and pull from it are “netted” monthly. If you use more than you send to the grid over the course of the year, you pay for the difference, but if you send more than you use, the utility credits the extra on your bill once per year.

Under NEM 2.0, the energy you use from the grid comes with a small “non-bypassable charge” of around 3 cents per kilowatt hour (kWh). You don’t get this small portion of the retail price back as a credit when you offset that usage by sending solar electricity back to the utility grid. The money raised by these charges goes to pay for important programs across the state. (Note, if you’re an LADWP customer, you do still get full retail NEM without these non-bypassable charges)

You’ll also need to sign up for a time-of-use billing plan (TOU), which has variable energy costs based on the time of day. Evening has the most demand on the grid, so your energy prices will be higher at this time. 

While that may sound bad, you can eliminate your use of the grid at peak times by installing a battery alongside your solar system. You can charge the battery during the middle of the day with solar electricity and discharge it in the evening, when purchasing from the grid would have been more expensive.

With or without a battery, NEM 2.0 credits can be extremely valuable over the life of your solar system. Unfortunately, it will be replaced by a new program called Net Billing in April of 2023. This new program will greatly reduce the value of solar energy credits, making solar a much worse financial decision. 

Luckily, you can still get on NEM 2.0 now. Find a solar installer before April to maximize your savings.

Learn more:

• Everything you need to know about California Net Metering 2.0 in 2020
• NEM 3.0 in California: What homeowners need to know about Net Billing

California solar rebates

California used to have a robust solar rebate program called the California Solar Initiative (CSI). The rebates available were fully used up by 2014, but the program succeeded in driving 3 terawatts of solar energy capacity to the grid.

Rebates live on for Californians with low income however. Check out the SASH and MASH programs outlined in the California solar incentives for low income households section below.

California solar tax credit

While some states still offer their own state tax credits for solar energy, California doesn’t anymore.

However, Golden State policymakers have enacted a property tax exemption for solar PV which is still going strong. This is a great perk, since solar panels will increase the value of your home by roughly 70% of system costs. So while the value of your home will go up, your property taxes won’t.

Example: If your solar system costs $20,000, your estimated property value increase of $14,000 will be tax exempt.

SGIP - California’s solar battery storage program

California is not only a national leader in solar, it is also a leader in solar battery storage, thanks in part to the Self Generation Incentive Program (SGIP).

If you install a battery storage system on your property that is serviced by PG&E, SCE, Southern California Gas, or SDG&E, you can take advantage of the SGIP incentive.

Battery storage systems that are smaller than 10 kW and are installed on a residential property are eligible for an incentive of $0.25 per watt hour of storage installed.

We outline how much you can save on battery storage when you use the SGIP incentive program in our breakdown of the SGIP rebate.

The SGIP equity budget for home battery storage

SGIP also has what is known as the “equity budget”. This budget has money set aside for solar batteries that are installed in low-income and disadvantaged areas.

The goal of the residential equity incentive is to catalyze more battery storage deployment in low-income areas.

Residential equity systems will receive a rebate of $0.85 per watt hour installed.

Low income homes that are located in either a Tier 3 or Tier 4 fire district, or that are in areas that have experienced two or more planned safety power shutoff (PSPS) events can qualify for an even higher incentive when they install battery storage on their home - this is known as the equity resilience incentive.

Projects that qualify for the equity resiliency incentive program will receive a rebate of $1.00 per watt hour of storage installed.

This covers almost the entire cost of a solar battery system. Check our blog on SGIP's equity resiliency program for more information.

California solar incentives for low-income households

Throughout the US, solar is adopted more in areas that have higher incomes even though low-income communities have the most to gain from the benefits of solar power.

Low income solar incentives have the ability to spur solar development in disadvantaged communities.

California has two types of low-income solar programs which are aimed for single-family homeowners and owners of multi-family properties:

The single-family affordable solar homes (SASH) program

The California SASH solar program provides huge solar money to single family homeowners. The program is administered by the non profit organization Grid Alternatives. They help provide green job training in low income areas to help people secure good-paying green energy jobs.

SASH program requirements

If you can qualify for the SASH program, you’ll get an upfront incentive of $3 per watt of solar installed.

So, if you want to install a 6 kilowatt system on your home, you’ll get an incentive of $18,000! That’s basically enough to pay for the entire cost of your solar system.

If you meet the following criteria, you could get this solar money:

1. You’re a Pacific Gas & Electric, Southern California Edison, or San Diego Gas & Electric customer
2. You own and live in your home
3. Have a household income that is 80% of or below the the area median income
4. Live in a home that is considered to be “affordable housing” by the California Public Utility code.

To check if you live in one of the approved areas, explore this map.

The multi-family affordable solar homes (MASH) program

The MASH program is designed for those fortunate enough to own a multi-family housing complex.

Those people can qualify for a large grant program to retrofit low-income multi-family housing developments with solar power.

Grants range from $1.10 to $1.80 per watt of solar installed. Exact amounts for different project types are listed on the California Public Utilities Commission website.

To qualify for MASH:

1. The multi-family residential building must be financed by one of the following:
   1. Low-income housing tax credits
   2. Tax-exempt mortgage revenue bonds
   3. General obligation bonds
   4. Some kind of local, state, or federal grants and loans
2. If at least 20% of the total units are sold or rented to lower-income residents.

There are some additional qualifications listed in the MASH program handbook. The MASH program is currently fully subscribed. New applications will be placed on a waitlist.

Solar guides for your California city

For more information about going solar near where you live, check out the following resources:

Useful links

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