California - Energy tax credit, rebates, grants, incentives

California renewable and solar energy incentives

California is serious about solar energy, wind power and energy efficiency. California was first in the US to advocate a policy, the Million Solar Roofs Program, that aims to install 3,000 megawatts of solar panels for production of electricity on rooftops across the state by 2017. Funding for the program includes both residential and commercial solar panel installations.

The Million Solar Roofs program is defined by the size of the photovoltaic (PV) solar electrc system to be installed.  For sytems under 100 kilowatts (100kW), which represents the vast majority of residential solar installations, the state's solar rebate offers up to $2.50 per watt.  This is significant because the average cost for installed solar power is roughly $6-7 per watt.  For solar power systems greater than 100 kW in size, California offers homeowners a monthly rebate of 39-cents per kilowatt generated over a 5-year period.

California Solar Initiative (Residential/Commercial)

Homeowners, commercial business owners, government organizations and non-profit organizations are offered various state rebates designed to be put toward installation and equipment costs for solar energy systems.

System requirements:

California Solar Initiative – Single Family Affordable Solar Housing Program (Residential)

The California Solar Initiative offers incentives on a per-watt AC basis for low-income residential owners who install PV systems on their property.

System requirements:

All systems must be installed by qualified California solar contractors who are enrolled as SASH program contractors by the SASH program administrator or self-installed by the purchaser of the system.

Sales Tax Exemption for Alternative Energy Equipment Manufacturers (Commercial/Industrial)

The State Treasurer’s Office offers a 100% use and sales tax exemption for commercial/industrial entities that produce alternative energy products.

Green Finance Loan Program – San Francisco (Residential/Commercial)

The city of San Francisco offers low-interest loans for homeowners and small business owners who intend to buy and install a solar water heat or PV system.

Energy Independence Program – Sonoma County (Residential/Commercial)

Residential buildings and commercial/industrial enterprises in Sonoma County are granted the option of financing a renewable energy system through a reassessment of their property tax bills.

Energy Independence Program – Palm Desert (Residential/Commercial)

Solar Energy Incentive Program – San Francisco (Residential/Commercial)

The city of San Francisco provides rebates for residents and businesses owners who purchase and install PV systems on their property.

Rebate amounts:

Maximum incentives:

Systems must be at least 1 kW in size.  There is no maximum size restriction.

Property Tax Exclusion for Solar Energy Systems – (Residential/Commercial)

Until Decembers 31, 2016, residents and commercial business owners may apply to be excluded from property tax equivalent to the increased value of a property due to the addition of a solar energy system.

Utility-sponsored Loan and Solar Rebate Programs (Residential/Commercial)

Federal Energy Tax Credit (Residential/Commercial)

Taxpayers are granted a personal tax credit of 30% of the total expenses, which include installation of residential solar-electric systems, solar thermal systems, fuel cells and labor expenses.  Residential wind energy installations and geothermal pumps are also eligible for the Federal tax credit.  

Federal Energy Conservation Subsidy Exclusion (Residential)

Energy-Efficient Mortgages (Residential)

Example: 4KW System – Residential Installation Cost

Average Electric Bill: $250/mo
Projected Annual Bill Escalation: 5%
Cost Per Watt: $6.50

- Estimated System Cost: $26,000
- Federal/State Tax Credit: $6,072
- State/Utility Rebate: $5,760
- Net Cost: $14,168
- Cumulative Lifetime Savings (25 Years): $46,987
- Investment Return: 13.3%

Savings of 46% on the total cost of your solar system through incentives


Proud Member of:
Solar Energy Industries Association

American Solar Energy Society

American Council on Renewable Energy

American Wind Energy Association

California Energy Tax Credit
California Energy Tax Credit
Solar Panels as investment