Solar panels are a fantastic long-term investment to help keep energy costs down while reducing carbon footprint. Many potential buyers feel the roadblock to owning a solar system is the initial cost. Luckily, for those buyers along the West Coast, tax credit for solar in California offers a wide range of incentives. This helps reduce the cost of admission for solar power.
Federal Solar Investment Tax Credit (ITC)
This federal tax credit was originally put into law through the Energy Policy Act of 2005, and was set to expire in 2007. Popularity has pushed this expiration date back multiple times, with the most recent two-year extension occurring in December of 2020. As of now, it allows the claim of up to 26%. That is of a solar system cost as a credit in federal taxes. However, the credit is set to lower to 22% in 2023.
Property Tax Exclusion for Solar Energy Systems
Section 73 of the California Revenue and Taxation Code stipulates that installing certain types of active home solar systems or building a new house with an active solar system will ensure your property taxes do not increase until the end of 2024. Amended in 2008, it also includes the construction of a solar energy system by an owner-builder for new buildings they do not intend to directly occupy or use.
Single-Family Affordable Solar Housing (SASH)
SASH is an incentive program to encourage eligible low-income households to invest in affordable home solar systems. It provides a one-time, up-front, capacity-based incentive of $3,000 for every kW of home solar installed.
Self-Generation Incentive Program (SGIP)
When buying a battery system to compliment your rooftop panels, you may be eligible for a rebate as high as $200 per kWh, applicable to your home solar battery installation.
Local Utility Company Rebates
Based on the area of California that you live in, several local utility companies offer cash incentives. Also, there are rebate programs that local residents can benefit from when installing solar systems. Tax credit for solar in California and incentives can vary from region to region, making it important to check first with local utility companies.