Solar power benefits everyone by reducing reliance on fossil fuels and lowering our impact on climate change. To encourage more people to adopt renewable energy systems for their homes, federal, state, and local governments offer financial incentives for homeowners to switch from on-grid power to solar.
One of the leading states for incentive programs is California, which provides several tax rebates, energy credits, and other financial rewards for solar installations. Understanding these programs can help make solar a better investment today than ever before.
Solar Incentives, Tax Credits, and Rebates in California
California has several incentive programs at the state level that encourage homes and businesses to benefit from switching to solar. Each program focuses on a specific financial element that benefits people investing in renewable energy systems. Together, these programs make solar power not only a sensible investment in the future of the planet, but also a smart one from an economic perspective.
Self-Generation Incentive Program (SGIP)
California’s Self-Generation Incentive Program, or SGIP, provides a rebate of $850 per kWh or $1,000 per kWh, depending on eligibility, when you purchase a battery storage system for home backup power.
This program focuses on people who are lower-income, medically vulnerable, or in communities at risk for wildfires. The rebate is high enough that you may be able to recoup most or all of your costs for a portable power station or other backup power sources for your home.
Solar Energy System Property Tax Exclusion
In most cases, an addition to a home is assessed at its current market value to determine property tax increases. The Solar Energy System Property Tax Exclusion is a new construction exclusion for property tax purposes.
Instead of the installation of a solar panel system immediately impacting the real estate valuation, the addition of solar panels and a balance of system is excluded from having any property tax impact until after 2024. Adding PV panel systems to a home increases its value by thousands of dollars; excluding those improvements from additional taxation is a powerful incentive for many homeowners and businesses.
Single-Family Affordable Solar Housing (SASH) Program
The Single-Family Affordable Solar Housing, or SASH program, offers an up-front payment of $3 per watt of solar power installed. The program targets single-family homes to provide more options for affordable housing.
Eligibility is limited to homeowners who receive electric power from one of California’s three largest electric utilities: Pacific Gas & Electric, Southern California Edison, and San Diego Gas & Electric. It’s also limited to those making 80% or less of the current median income in their area and is currently closed to new applicants.
Net Metering
California also offers a net-energy metering program for residents connected to the local grid. Because California receives so much sunlight, homeowners that install solar panels can often generate more energy than they need to power their homes. This program allows them to sell excess electricity back to the utilities, providing a financial reward for grid-tied solar installations homeowners can use on an ongoing basis.
Local Utility Company Rebates
San Francisco and Sacramento offer rebate programs for new PV rooftop solar installations. These programs, provided by the relevant local electric utilities, come in addition to any incentives at the federal or state level. They encourage new rooftop systems and solar electric generation construction by directly compensating eligible homeowners who install new systems.
Federal Solar Tax Credit
The Federal Solar Investment Tax Credit (ITC) is a 30% tax credit for homeowners who purchase and install a solar energy system for their homes. The credit reduces your tax bill dollar for dollar. For example, if you buy a $10,000 system, your credit would be $3,000 against your next tax bill, meaning whatever you owe in taxes would be reduced by $3,000.
The Federal Solar Tax Credit is limited to homeowners who purchase solar power systems. You aren’t eligible for the credit if you lease the equipment or are on a Power Purchase Agreement. It covers the purchase of PV panels and components, installation costs, and any portable power stations or other battery storage solutions with a capacity of at least three kWh.
California Roof-Top Solar Alternatives
With federal and state incentives available, the return on your investment in solar power can arrive much sooner. The incentives can change or expire over time, but their current availability makes purchasing solar systems a wise, worthwhile investment for many people.
That said, a large-scale roof-top solar installation isn’t feasible for everyone. The good news is that the federal and California incentive programs are broad enough that several power solutions will qualify you for those programs. If a roof-top system is out of your current budget, EcoFlow offers several roof-top solar alternatives you could purchase to take advantage of the incentives available.
1. EcoFlow DELTA Pro Solar Generator
The EcoFlow DELTA Pro Solar Generator comes with a 400W PV panel and can generate up to 11.2 kWh of electricity daily. It has an expandable power storage option, providing from 3.6-25 kWh of electricity. It’s enough to power your entire home if needed. Thus, it can meet the requirements for California’s SGIP and the federal ITC for rebates and tax credits.
2. Whole Home Generator
The EcoFlow Whole Home Generator includes one or more EcoFlow DELTA Pro power stations and PV solar panels, and can be integrated with the central EcoFlow Smart Home Panel. It puts control and monitoring of your system right at your fingertips through the EcoFlow app. The EcoFlow Smart Home Panel automatically switches to backup electricity if you lose grid power. Combined with rooftop solar panels, this setup qualifies you for state and federal incentive programs.
3. Power Kits
The EcoFlow Power Kit is perfect for a tiny home, RV, or off-grid build. You qualify for these incentive programs if you have a tiny house and connect the kit to solar panels. You can add the solar panels and battery storage you need with an easy plug-and-play design that you can customize for your specific consumption requirements.
4. Solar Panels
EcoFlow solar panels feature monocrystalline solar cells for maximum efficiency. When you’re ready to build out your solar power system, these high-quality panels give you the best tools available for collecting more sunlight and converting it into enough electricity to power your home in California. As part of your complete solar power system, these are the most critical components in your switch to reliable solar power.
Frequently Asked Questions
California doesn’t technically have a free solar program. That said, the SGIP program offers generous rebates that can cover most, or sometimes all, of the cost of your solar purchase. This financial boost gives you an essentially free solar power system and portable power station.
California’s SGIP program reimburses as much as $1,000 per kWh for your solar power system. The rebate can cover the entire cost of your system, depending on its size. In addition, the federal ITC gives a 30% tax credit on the cost of installation and system components.
Final Thoughts
Investing in solar power can be one of the most rewarding decisions a homeowner can make. Not only does it represent a step toward limiting the effects of climate change, but it provides you a chance to save money over time. On average, you will reach a net positive less than nine years after your initial investment — and the savings continue piling up.
If you’re thinking about switching to solar in 2023, consider EcoFlow. We have a range of solar panels, power stations, solar generators, and energy storage systems available for households of any size.
With so many options, you can stay within budget while finding a solution that lets you benefit from California’s incentives, rebates, and credits on solar energy.