What solar incentives and rebates are available to California homeowners in 2022?


state of california
Is California still one of the best states to go solar?

2022 is shaping up to be a doozy of a year for residential solar in the Golden State. 

That’s a bold statement, so let’s get right into it: People who install solar panels on their home early in the year will still qualify for California’s current Net Energy Metering (NEM) 2.0, but sometime in May or June, all new residential systems will fall under NEM 3.0. The Public Utilities Commission has yet to vote on a final version of NEM 3, but it’s likely to include a reduction in compensation for excess solar energy and might also come with increased fees on solar owners.

Basically, if you’re thinking about getting solar panels for your California home, you should do it sooner rather than later.

This page is a good place to start on that journey. One of the first questions to ask is, "What solar incentives are available in my city and how much will they save me on the system my home needs?"

In this blog, we’ll explain all of the solar rebates and incentives available in California. We have also built the California solar incentives calculator which allows you to drill down on specific system costs and show only the incentives that are applicable to you.

On this page

    See available solar rebates, incentives, and tax credits in your area

    Quick summary: All CA solar incentives and rebates in 2022

    Here is a summary table showing all California solar rebates and incentives available to homeowners who install a solar PV system for clean energy. 

    Table. California solar incentives and rebates in 2022
    Incentive Amount Eligibility
    Solar tax credit 26% of total system cost (including installation) Anyone who pays federal taxes
    Net metering Your solar exports earn the retail rate of electricity, less a small non-bypassable surcharge All customers of investor-owned utilities (PG&E, SoCal Ed, SDG&E)
    SGIP $200/kWh - $1,000/kWh of installed battery storage All customers of investor-owned utilities.; additional conditions apply for the higher tiers

    Scroll down for details on how each of these solar incentives and rebates work. 

    How much is the California solar tax credit in 2022?

    Homeowners installing solar panels in California will receive a 26% tax credit on their purchase. 

    It’s important to make a clarification here: there is no California-specific solar tax credit. When people refer to the ‘California solar tax credit’, they are actually referring to the federal solar tax credit, which applies to all American homes, including those in California.

    The federal solar tax credit is 26% of the cost of a system until the end of 2022, and falls to 22% in 2023. Unless new federal legislation is introduced, the federal solar investment tax credit (also known as the ITC or Investment Tax Credit) will be gone in 2024.

    Learn more: The federal solar tax credit: all your questions answered

    Does California have a net metering incentive?

    Under California’s net energy metering incentive, investor-owned utilities are required to buy homeowners’ excess solar electricity at close-to retail rates. 

    The NEM 2.0 program, passed by the Public Utilities Commission in 2018, guarantees that homeowners going solar will be able to sell the excess solar electricity - typically produced during midday - for a period of 20 years.  

    This is an extremely valuable incentive; selling your electricity to the utility at a good value is the easiest way to pay off your solar panel purchase quickly

    As we mentioned above, NEM 2.0 will end some time in 2022. The reason there isn’t a firm date is that the California Public Utilities Commission has to vote on a final version of NEM 3.0, which will take effect 120 days after that vote. 

    Learn more:

    What rebates are there for low-income households in California?

    Californians with lower incomes might have some trouble during the early part of 2022. The state’s long-running SASH and MASH programs ended as of December 31, 2021. There are currently no low-income solar incentives in California other than those described in the section about SGIP battery rebates, below. 

    That’s not the end of the story, though. The NEM 3.0 proposed decision included the broad outlines for new low-income solar programs in the state, committing $150 million per year for four years to a yet-to-be-determined incentive program, and exempting customers who qualify for subsidized utility rates from many of the additional charges proposed in NEM 3.0.

    Stay tuned to this website for future updates on California low-income solar incentives.

    SGIP Program: California solar incentives now cover battery storage

    Residential customers can currently qualify for a Self-Generation Incentive Program (SGIP) rebate of between $200-$1,000 per kilowatt-hour of storage. That means you could earn a rebate of between $2,000 and $10,000 when you install a 10 kWh solar battery system.

    If you’re installing a battery storage system on a property serviced by PG&E, SCE, Southern California Gas, or SDG&E, you can take advantage of the SGIP incentive. And yes, the rebate can be applied to the Tesla Powerwall.

    There are three incentive tiers:

    1. Residential storage 

    Battery storage systems that are smaller than 10 kW and are installed on a residential property are eligible for an incentive of $200/kWh of storage installed. This is the incentive that most homeowners will qualify for. 

    2. Residential equity storage 

    SGIP also has what is known as the “equity budget”. This budget has money set aside for solar batteries that are installed in low-income and disadvantaged areas. The goal of the residential equity incentive is to encourage more battery storage deployment in low-income areas. 

    Residential equity systems will receive a rebate of $850/kWh installed.

    3. Residential equity resiliency storage 

    Low-income homes that are located in either a Tier 3 or Tier 4 fire district, or that are in areas that have experienced two or more planned safety power shutoff (PSPS) events can qualify for an even higher incentive when they install battery storage on their home - this is known as the equity resilience incentive.

    Projects that qualify for the equity resiliency incentive program will receive a rebate of $1,000/kWh of storage installed. This covers almost the entire cost of a solar battery system

    Learn more: California’s SGIP battery rebate program in 2022

    Do utility companies in California offer any upfront solar rebates?

    Upfront rebates from utilities used to be common, but there are no California utilities that offer them anymore.

    Find out which solar rebates and incentives you qualify for

    Use the California solar incentives calculator to determine costs

    By just entering your address and some basic information, you can find out: 

    All incentives, rebates, and credits you qualify for 

    Based on your utility and location, the California solar incentives calculator will show you all incentives and rebates you quality for - as well as how much each of them will be worth to you in dollar terms.  

    Your recommended solar system size 

    The calculator has a database of the electric rates charged by each utility company in California. 

    This means that from just the amount you spent on electricity last month, the calculator can show you how much electricity you used and how many solar panels you will need to power your home

    Accurate solar panel prices 

    We have a network of over 80 solar company partners in California. Most are long-established, family-owned installers with excellent customer reviews. We use the average of these companies’ prices to generate our online cost estimate and to calculate the savings you will get from the federal solar tax credit.

    You can choose to have 1-4 of these companies view your roof online and provide an exact bid which will show you the exact value of the tax credit - if you choose to accept their bid.

    How many solar panels do you need to offset 100% of your electric bill?

    Key takeaways

    • The California solar tax credit is actually the federal Investment Tax Credit (ITC) and it’s worth 26% of your total solar panel costs.
    • You can sell your excess solar power production to investor-owned utilities at near-retail prices, thanks to California net metering rules.
    • The SGIP program offers a generous rebate to all Californians who buy battery storage systems; extra money is set aside for those who are low-income, disadvantaged, and in fire-affected districts.
    • Our California solar incentives calculator will show you your estimated solar panel costs and the value of any solar incentives and rebates you are eligible for.
     - Author of Solar Reviews

    Ben Zientara

    Solar Policy Analyst and Researcher

    Ben is a writer, researcher, and data analysis expert who has worked for clients in the sustainability, public administration, and clean energy sectors.

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