The complete list of California solar incentives and tax credits for 2023, plus how to take advantage.
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The Golden State is a great place to go solar. There’s abundant sunshine and plenty of state solar incentives in California. In fact, California is one of the few states to offer rebates for residential solar storage, along with a property tax exemption and net metering.
California Solar Incentives
| Incentive | Description |
|---|---|
| State solar storage rebates | A 15% tax credit, up to $1,000 |
| State property tax exemptions | An exemption from any additional property taxes due to installing solar, valid only until the end of 2024 |
| Solar storage incentives | The SMART program offers additional incentives for installing battery storage with a solar PV system |
| Net metering | Mandated by law, but no longer full retail rate credits. Now a time-of-use tariff |
| DAC-SASH program | Funded through 2030, DAC-SASH offers free or low-cost residential solar to low-income families and residents in disadvantaged communities |
| Self Generation Incentive Program (SGIP) | Incentives for installing solar battery storage systems smaller than 10 kW. Rebates up to $0.25 per watt-hour of storage installed, or up to $1/Wh for qualifying low-income or disadvantaged customers |
California’s SGIP – Self Generation Incentive Program
Homeowners in California who install battery storage systems smaller than 10 kW on residential property are eligible for the state’s Self Generation Incentive Program (SGIP). This program pays an incentive of $0.25 per watt-hour of storage installed and is available for properties serviced by PG&E, SCE, Southern California Gas, or SDG&E.
For most customers (not low-income), the rebate works out to 15-20% of the average battery cost. Higher rebates are available in low-income areas and areas affected more frequently by blackouts and brownouts. Rebates of up to $1.00/Wh are available through this Equity Resiliency arm of the SGIP. For some homeowners, this could offset around 85% of the cost of battery storage.
Funding for the program has been approved through to the end of 2024. SGIP also offers an additional incentive of 20% if you install battery equipment manufactured in California. As an example of SGIP, a family installed a Tesla Powerwall with a 13.5 kWh capacity may be eligible for an incentive rate of $0.20/Wh, working out to a substantial rebate of $2,700.
Storage incentives are based on the system’s energy capacity (kWh), its power capacity, and other factors. Your solar installer should be able to do these calculations for you and fill out the necessary paperwork for the rebate. The first step is to submit a Reservation Request Form (RRF) with documentation showing plans to install an eligible system. Upon approval of the RRF and installation and interconnection of the approved system, the installer or homeowner then submits an Incentive Claim Form (ICF).
The great thing about SGIP is that homeowners can still access the program even if they installed solar panels a while ago. The rebate is only for solar storage, so as long as you’re adding a battery to an existing system, you should be able to apply.
Note, though, that the value of the incentive depends both on the size of your battery and how many batteries have already qualified for the program. As with many solar rebates and incentives, it pays to be an early adopter. You can see the current incentive rates at the SGIP metrics dashboard.
California’s DAC-SASH Program
California state has approved and funded the DAC-SASH program through to 2030. DAC-SASH stands for Disadvantaged Communities – Single-Family Solar Homes (DAC-SASH) and is a program designed to incentivize home solar in disadvantaged communities. The program is modeled after the successful SASH program (see below), which is now closed to new applicants.
Qualifying DAC-SASH homeowners must live in one of the state’s top 25% disadvantaged communities as per CalEnviroScreen. They must also be serviced by Pacific Gas & Electric (PG&E), Southern California Edison (SCE), or San Diego Gas & Electric (SDG&E) and meet certain income qualifications.
Interested homeowners can apply through GRID’s Energy for All Program, which combines state, local, and private funding for home solar installations.
A note on California’s SASH and MASH
California offered the SASH and MASH programs for more than a decade, with the last spots in the programs reserved at the end of 2021. Under these programs, low-income households could get an upfront incentive of up to $3 per watt of solar installed. This helped to pay for the entire installation cost of a 6 kW system in some cases.
SASH stands for the Single-Family Affordable Solar Homes (SASH) program, while MASH is for multifamily properties. Both programs expired at the end of 2021, with the last few qualifying projects built in 2022. So far, there’s no indication of plans to provide additional funding for SASH and MASH.
State property tax exemptions in California
California offers a property tax exclusion for value added by solar. Qualifying technologies include solar water heat, solar space heat, solar thermal electric, solar thermal process heat, and solar photovoltaics. This exclusion is set to expire in January 2025, so take advantage now and lock in the exclusion until the end of 2024.
Note that this is an exclusion, not an exemption. As such, the assessed value of your home will not increase or decrease by adding solar panels. In contrast, the Appraisal Institute estimated in 2014 that homes in California increase in value by around $6,000 for every kilowatt of solar capacity added.
Net metering in California
Net metering is, for now, still available in California, despite attempts by utilities and some lawmakers to get rid of it.
Under California’s original net metering policy, homeowners with solar energy equipment received one-to-one bill credits for energy exported to and drawn from the grid. In 2016, however, California approved a revised version of net metering, with all new solar homeowners eventually moving to a time-of-use (TOU) rate. This means that the cost and credit of every kWh varies depending on what time of day you send or draw energy to and from the grid.
If your utility has already switched to a TOU rate and you don’t have a solar battery installed, consider installing one and applying for the SGIP rebate before 2025. That way, your battery can store the energy your panels generate during the day and you can use that energy at night or on less sunny days. This will save you the difference in cost between the electricity you export and buy.
Final thoughts on state solar incentives in California
California gets six peak-sun-hours daily, meaning that a 6 kW home solar array can meet most households’ energy needs. Size your array to meet 80% of those needs and factor in the very high cost of electricity in California, and you could save around $12,500 on your energy bills in just five years!
California offers a pretty short solar payback period too. With the federal solar tax credit knocking 30% off the purchase price of a solar installation, net metering helping to offset the cost of any energy you do draw from the grid, and the potential for a rebate for solar battery storage through SGIP, it’s a great time to go solar in the Golden State.