By 2030, California will require all utilities in the state to source 50% of their electrical generation from renewable sources. Because of this, utility companies and the state of California itself offer a number of enticing reasons for homeowners to purchase and install solar panels.
Here’s a list of seven California solar incentives that will help save you money.
1. Property-Assessed Clean Energy (PACE)
California has four of the top 25 sunniest cities in America. As a result, there are heavy tax-based incentives involved for hooking up solar in your home.
While the benefits of a light electrical bill look great, there’s certainly some nervousness around the initial upfront costs.
That’s where PACE comes in. PACE is a loan option that allows property owners to finance qualified solar energy projects through their very own property taxes. As a result, the California government works with traditional financiers and helps pay for the upfront cost of the solar project.
Homeowners pay this loan off with an increased property tax bill over a rate of years (the most common being 20). If you want solar now for a fraction of the upfront cost, this is a terrific way to do it.
2. The Investment Tax Credit (ITC)
The investment tax credit is a federal tax credit, offering hefty savings for those on the solar-grid.
Homeowners who buy and own their solar systems can claim and deduct 26% of the installation costs from their federal taxes (tax liability) in 2020. This rate decreased from 30% the previous year, and will decrease to 21% in 2021.
Unless Congress renews the federal ITC, the provision will drop to 0% in 2022.
Still, 26% is over a quarter of the cost returned to your pocket the following spring. The national average for installing solar is around $16,000. With the tax credit, that gets your initial costs down to ~$12,000.
Add onto that the savings you’re making monthly off your electric bill and you’ll net positive in no time.
3. Property Tax Exclusion for Solar Energy Homes
In California, your property taxes can only change when either 1) you purchase or sell a home, or 2) when you complete new construction or do a major renovation on your property.
Installing a solar system normally counts as one of these major renovations. However, California offers a tax-exclusion to properties that install solar systems on their property before January 1, 2025.
This is another time-sensitive incentive that requires acting on unless California chooses to extend that deadline.
4. Net Energy Metering
If you think you don’t use enough electricity to warrant a solar system, consider this: net energy metering allows utility customers to sell excess solar energy they’ve generated through their solar system.
In California, net energy metering is mandatory for all utility companies. What does that mean for you? Well, your solar system must be sized to meet the demands of customers in your area.
You’ll also be required to switch to a time-of-use rate for energy, meaning that you’ll be charged for your electrical usage depending on when it’s consumed during the day.
If you participate in net energy metering, you won’t be paid in cash. Rather, you’ll receive a bill credit for the excess solar energy your solar system produced. These credits can span months, meaning they’ll cover your electrical costs even if it’s a particularly cloudy season and you aren’t generating a positive amount of energy.
Make sure to note any net metering credit expiration terms in your contract.
5. Solar for Multifamily Homes
The Multifamily Affordable Solar Housing (MASH) program offers a keen incentive for those who don’t own a traditional, single-family home. This program offers financial incentives to those homeowners, with the rates ranging from $1.10-$1.80/Watt.
It has already amassed $162.3 million in paid incentives to completed California projects since its inception in 2008. Currently, MASH is closed for new applicants. You can join their program waitlist if this is something you’re interested in.
6. Affordable Housing with Solar
Like MASH, the Single-Family Affordable Solar Housing (SASH) program was built to provide financial benefits to qualifying low-income single-family homeowners. SASH offers one up-front incentive level of $3/Watt to all qualifying applicants. This can heavily offset the initial cost of installing a solar system.
The program is overseen by the California Public Utilities Commission and is dedicated to ensuring cost-effective, renewable energy usage for anyone, regardless of income limitations.
7. City, County, and Local Incentives
Do a quick search to determine what your local county or city has on offer for installing solar. While some have had rebate programs expire, there are still cities that offer them for its citizens.
San Fransisco offers a one-time cash incentive to residents through the GoSolarSF program. In 2020, the incentive rate is $100/kW or $250/kW if your system is installed by a San Francisco contractor.
The Los Angeles Department of Water and Power also offers an upfront rebate to help cover some of the costs of installing solar power.
Don’t think solar is impossible if you don’t live in one of these urban centers. You don’t know what’s available until you check.
Take Advantage of All the California Solar Incentives Now
The California solar incentives are plentiful, but time is of the essence. If you want to invest in solar and start saving money on a hefty electric bill, reach out for a quote today. California credits have decreased or expired in the past ten years.
The trade-off is that the overall cost of solar system installations has decreased over this time. Right now is the best balance of tax incentives combined with a lower barrier for entry.
There’s no time like the present to start thinking about your global footprint, and we’re committed to helping you do the job right without breaking the bank.