What is the Solar Rebate in California?

What is the Solar Rebate in California?

What is the Solar Rebate in California?

Solar rebates in California abound. Aggressive solar rebates and incentives program make California one of the best states for going solar. Like the traditional gold, it is blessed with plenty of sunlight that enables Californians to exploit solar energy to the fullest. In 2019, California was ranked first in solar energy countrywide, for two reasons. One, the costs of solar panels in California have declined by 38 percent over the last five years. As of 2020, the average cost of a typical solar panel system installation in California ranges from $12,500 to $17,000. That makes the cost per watt around $2.5 to $3.4 for installing solar panels in California.

Second, the electricity costs here are one of the highest in the country. On top of it, there are pretty attractive solar rebates in California, offered by the state government for going solar in California. A homeowner wishing to turn to solar may avail themselves the following solar rebates in California.

 Federal Income Tax Credit

Currently, this Tax Credit (Hyperlink the main page of Federal Income Tax Credit) stands at 26% of the total cost of the system. That is, if your solar power system is worth $10,000, you will be given $2,600 back in the form of a tax break. This incentive, however, has an expiry date. In 2021, you would be able to claim only 22% of the cost of solar power system. Similarly, 10% in 2022, and 0% (for residential installations) in 2023. Now is the best time to turn your rooftop into your own little powerhouse and earn 26% of your cost back. 

Net Metering in California

Net metering is a regulatory policy in place in many states including California. Through this billing arrangement, a two-way meter keeps track of your consumption as well as your system’s generation.  When you, being someone who has installed a solar panel system, produce electricity from the system, it goes to the grid. Your utility gives you 1kWh power for 1kWh your system produce. But what if your system generates excess power? Fret not! California’s Net Metering Policy, known as NEM 2.0, enables you to receive bill credits for the excess electricity your solar panels generate. The system, however, should have a generation capacity lower than 1,000 kilowatts(1 MW).

Local Solar Rebates in California

Californians have access to local solar rebate programs in many areas of the State. You can earn back anywhere from $500 total to $0.95 per watt of installed capacity. We list down three such solar rebates in California here.

  1. If you’re installing a solar system on your home in Rancho Mirage, the Rancho Mirage Energy Authority will provide a solar rebate of $500 to cover the cost of your permit fee. This rebate can be claimed after your utility company has granted permission to operate (PTO).
  2. Another great solar rebate in California is the Property Assessed Clean Energy (PACE). Known as the Home Energy Renovation Opportunity (HERO) Financing Program, it is being offered in many cities and counties. PACE financing lets homeowners finance their solar system installation and pay it back through their property taxes.
  3. Similarly, some utilities in California do offer additional solar incentives. For example, the Sacramento Municipal Utility District offers its customers a $300 rebate when they install solar panels on their roofs. 

Other than these programs, there are also many county-specific versions of this program such as Sonoma County’s Energy Independence Program. Fill in this form and one of our consultants will apprise you in detail about the incentives you may be eligible for.

Property Tax Exemption

A solar panel system adds value to the home. A typical 5kW solar panel system can add about $20,000 to your home’s resale value. But do the property tax applies to this increased value of your home? Thankfully, not in California. Under the Property Tax Exclusion for Solar Energy Systems, 100% of the assessed value of the solar energy system is exempt from your property taxes.

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