California solar 101: must read before you buy solar panels
Benefit from a PV system
5.95 peak sun hours
The most popular state for solar gives a solid energy harvest over the year
Get up to $15,000 for a solar system with SASH program
An incentive for low-income families makes solar more accessible
1 years payback time
A solar power system in California gives one of the fastest ROI
Add batteries to your system with California incentives
Energy storage prices dropped by 76% since 2012
Sell your excess energy into the grid with Net metering program
Gain credits from utility company and pay your bills with them
California #6 in the US
- $49 386/year Average savings from going solar in California
- 6 384 kWh/year Average electricity consumption of a FL household
- 8 432 kWh/year AC energy output of a 5 kW solar system installed in California
- 19 ¢ /kWh The cost of electricity today in California
- 40 ¢ /kWh The forecast average utility price over the next 25 years
- $0.76/WAverage gross price of a solar power system as of May 2021
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Solar laws, incentives and rebates in California you need to know
Save 26% of your PV system cost with Federal Solar Tax Credit
The main solar incentive that works across all United States is the Solar Investment Tax Credit (ITC) program. By applying to this program, all Americans can deduct 26% of the total cost of their installation from the income tax. The PV system cost doesn’t amount to only how much you’ve spent on your solar panels, but includes the shipping and installation as well. To claim the ITC, complete all the necessary forms and submit them when filing your taxes. It makes sense to hurry up: in 2023 the Tax credit decreases to 22% and after that it’s 10% for commercial systems only.
Gain credits from electric companies with Net Metering program
When your system produces more energy than you need, you can sell the surplus into the grid and gain credits from your electric company. Usually the rates for this excess energy are close to utility rates, so in theory you can stop paying all of your electricity bills this way. The rates and conditions vary from company to company, so we recommend consulting your electric supplier.
Solar systems are excluded from property tax assessment
When you add solar panels to your house in California, taxes for your property don’t change. Until 2025 new PV systems are eligible for full exclusion from taxes. You don’t have to fill any additional forms for that exclusion – it is granted automatically once your tax assessor receives a building permit. However, you might need to fill some papers when building a house with a solar system from scratch – check the details here.
Add energy storage to your system with Self-Generation Incentive Program
The Self-Generation Incentive Program (SGIP) is specifically designed to make solar batteries more affordable in California for low-income families. By applying for this program you get a chance to receive some money back from the cost of your energy storage. The program primarily targets California residents with low income, but you can apply even if you don't fit into this category. The size of financial incentive varies depending on your status and the size of your energy storage: from $0.20 to $0.85 per Wh. The program was about to end in December 2020, but was extended due to COVID-19 pandemic. You can check out the handbook on the website of the program to see if you’re eligible and find forms for application and all the documents there.
Single-Family Affordable Solar Homes program can decrease a PV system cost in California by $15,000
Single-family Affordable Solar Homes program (SASH) aims to help families with low income to go solar in California. It is suitable for 1 to 5 kW AC installations. The applicants get a one-time payment based on the size of the system: $3 per Watt. Therefore, you can get as much as $15,000 for a 5kW AC system.
To participate in the SASH program, an applicant needs:
- To be a customer of Pacific Gas & Electric (PG&E), Southern California Edison (SCE), or San Diego Gas & Electric (SDG&E)
- Own and live in a house defined as “affordable housing” by California Public Utilities Code 2852
- Have a household income that is 80% or below of the area median income, based on the tax return for the previous year.
Sales and Use Tax Exemption makes panels and batteries cheaper
Since 2018, all equipment that is used for production, storage or distribution of electric power is exempted from sales and use taxes in California. That allows retailers to lower their prices for photovoltaics and lithium-ion batteries that are considered to be the new go-to type of solar energy storage. Making use of the next incentive in the list can make buying them in California an especially good deal.
Get a permit to install your solar panels in California
To install a solar system in California, you need a building permit. However, you aren’t getting it yourself – it’s actually your solar installer who has to apply for it with a city or county agency. A solar inspector from this agency comes and inspects your home and after that it is legal to install solar panels on your house in California.
The state has devised a fairly detailed guide to buying and installing solar in California. It covers not only the procedure of getting a permit, but also explains the rights you have as a purchaser and lists the questions that you should ask your installer before signing a contract.
Solar Shade Control Act protects your panels from neighbor’s trees
There are lots of solar systems in California. To make sure that there is enough sunlight for each of them, the state passed the Shade Control Act. This paper protects your panels from the neighbor’s trees casting a shadow on your solar array. According to the act, the solar system should be placed at least 10 ft high and no less than 5 ft from the property line. Then your neighbor has to make sure that no tree grows on his land to cast a shadow that would cover more than 10% of your system between 10 am and 2 pm. If there is already a tree that grows so high that it blocks the sunlight, he has to trim it.