California Guide to Solar Tax Credits, Rebates, and Incentives
California is known for many things, including sand, surf, and sun! People flock to this state to experience beautiful beaches, historic cities, amusement parks, and gorgeous sunny weather. Our tourists — and many residents — may not know that we’re the top state in the nation for our solar power generation. We’re putting that sunshine to good use to help power our homes and cities while also helping the environment.
Our state harnesses enough solar energy to power over 10 million homes. That number only continues to grow thanks to the many California solar incentives, rebates, and tax credits available to our residents. If you’re interested in solar power for your home, read on to discover the programs that help you save money on your solar system.
Residential Clean Energy Credit
The Residential Clean Energy Credit, or the Federal Solar Tax Credit, is credit homeowners can claim on their federal income taxes. Many California residents qualify for this tax program, previously called the Investment Tax Credit (ITC), and can use it to cover up to 30% of solar installation costs.
What Does This California Solar Tax Credit Look Like for You?
You’ve added a solar system to your California home, and now you’re ready to file a federal tax return. When you claim this credit, the government may reduce your tax liability by 30% to offset the cost of your solar system.
For example, if you paid $16,500 for solar installation, you may be eligible for a $4,950 tax credit. This credit can bring down the federal taxes you owe for the year you installed the system.
When applying for this California solar tax credit, you’ll need to fill out a 5695 form, then add that information to your 1040 form.
Choosing Axia for Your Solar Installation
With so many solar rebates and incentives in California, it’s a no-brainer for residents to make the switch and take advantage of these programs. If you’re ready, let Axia Solar be the team to help you harness the sun’s power. We’ve taken the stress and confusion out of solar panels by creating a new and empowering experience built around your unique needs.
As a full-service solar company, we’re here to take care of you every step of the way.
We design a solar system that best suits your home — and we take care of all the paperwork and permits, handling the entire installation quickly and efficiently.
Quality Solar Panels
You deserve the best, and we’re here to make that happen. We’re backed by Qcells and use their industry-leading panels in our installations.
Ongoing Support for Warranty Claims
After installation, we’re here to offer continued support for warranty claims, ensuring your solar equipment continues to work for you for years to come.
You don’t have to break the bank to switch to solar. We build systems that meet your needs — so you don’t pay for unnecessary equipment — and we have in-house financing options to bring costs down further.
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State-Run Program for Disadvantaged Homes
The Disadvantaged Communities Single-Family Affordable Solar Homes (DAC-SASH) program is a California solar incentives system that focuses on bringing solar power and renewable energy to disadvantaged communities throughout the state. This program offers qualified residents up to $3 per watt as a rebate toward their solar system installation.
This California solar rebate program is set to run through 2030 and has specific qualification requirements.
Solar Energy System Property Tax Exemption
This California solar incentives program encourages residents to switch to solar to prevent an increase or decrease in property taxes due to the upgrade. Also called the Active Solar Energy System Exclusion, this program stops any changes in a property value assessment by considering a new solar panel system as a “new construction exclusion.”
This California solar panel incentive was set to expire at the end of the 2024 fiscal year, meaning property tax increases would start in 2025. However, Governor Newsom recently signed Senate Bill 1340 to extend this program through the end of 2026.
Net Metering in California
Participating utility companies include
You’ll need to be a billed customer from one of these companies to participate in the net metering program.
How You Are Credited
Net energy metering (NEM) is not part of California solar incentives, rebates, and tax credits. Instead, this is a program run through utility companies throughout the state where you are credited for the solar energy sent back to the grid.
When you sign up for net metering, your utility company tracks your solar power system for the excess energy you create but don’t use. The excess is directed back to the local power grid, and you are credited with a reduction in your power bill based on the extra energy you’ve shared.
Self-generation Incentive Program (SGIP)
Check With Your Local Utility Companies
Some local utility companies offer their own California solar credit. You should check with your utility provider to see if they have local solar incentives available.
How Much Can I Save?
While solar power is an excellent energy-saving option, many people make the switch for cost savings. Your potential solar savings will vary depending on your location, energy use, and the average price offered by solar companies near you.
Contact the Axia team for a personalized quote to get a more accurate picture of how much you can save with solar energy.
California Solar Incentives FAQ
Solar panels are a hot topic in California, and many residents have questions about these energy-saving systems. Here are some of our commonly asked questions about California solar incentives.
The Federal Solar Tax Credit can only be claimed on your taxes once and only for the year you installed the solar panel system. Other state-specific programs, such as DAC-SASH and net metering, will end in the coming years, so you can only participate while they are available.