Summary of California solar incentives 2021
2021 is shaping up to be a year of huge changes for residential solar energy programs in California. The state Public Utilities Commission is in the middle of making changes to net metering, the energy billing arrangement under which solar panel owners earn credit for their excess energy that they can later use to offset energy the draw from the grid at night. Those changes may result in much worse financial returns from solar for people who get panels installed after the new rules take effect.
On this page, we cover all of the solar and battery incentives, rebates and tax credits available for your California home solar installation. We also provide guidance on how low income solar power programs work.
We also encourage you to use the California solar incentives calculator above. It allows you to drill down and show only the solar incentives that are applicable where you live.
On this page, you can:
-
Learn what solar incentives are available to California homeowners
-
See what California solar incentives you qualify for based on your utility company and city
-
Find out how much these incentives and/or California solar tax credits will reduce your cost to go solar and add batteries
Federal solar investment tax credit
The federal solar investment tax credit will have the biggest impact on the cost you will face to go solar in California
This perk is commonly known as the ITC, short for “Investment Tax Credit”. If you install your photovoltaic system in 2020, the federal tax credit is 26% of the cost of your solar panel system. This is 26% off the entire cost of the system including equipment, labor and permitting.
Example: If your solar energy system costs $20,000, your federal solar tax credit would be $20,000 x 26% = $5,200.
The federal tax credit falls to 22% at the end of 2022.
Net energy metering in California
With net metering in some states, you get full retail rate credit for the amount of electricity you send back into the grid with your solar panels.
With net metering, or “net energy metering” (NEM), you get near-full retail rate credit for the amount of electricity you send back into the grid with your solar panels. The reason why it’s near full retail rate credit instead of full retail rate credit for the electricity you send back to the grid is because California recently amended their NEM to NEM 2.0.
As part of that change, the energy you buy from your utility company comes with a small “non-bypassable charge” of 3 cents per kilowatt hour (kWh). Under NEM 2.0, you don’t get this same amount as credit when you send electricity back to the utility grid (Note, if you’re an LADWP customer, you still will get full retail NEM without this non-bypassable charge).
You’ll also need to sign up for a time-of-use billing plan (TOU), which has variable energy costs based on what time of day it is. Evening has the most demand, so your energy prices will be higher at this time.
While that may sound bad, you can do very well to offset TOU billing changes by installing a solar energy storage system. You can charge the battery during the middle of the day with your free solar electricity, and discharge in the evening, when purchasing from the grid would be more expensive.
With NEM, The amount of kilowatt hours (kWh) you send to your local utility and pull from it are “netted” monthly. If you use more than you send to the grid at the end of the year, you pay for the balance.
Net metering in California can be extremely valuable over the life of your solar system. When paired with TOU billing and the ability to send power to the grid during off-peak hours, your savings are enhanced even further.
Luckily, your solar installer is a net metering expert. They will help you design a solar system to maximize your savings.
Learn more:
California solar rebates
California used to have a robust solar rebate program called the California Solar Initiative (CSI). The rebates available were fully used up by 2014, but the program succeeded in driving 3 terawatts of solar energy capacity to the grid.
Rebates live on for Californians with low income however. Check out the SASH and MASH programs outlined in the California solar incentives for low income households section below.
California solar tax credit
While some states still offer their own state tax credits for solar energy, California doesn’t anymore.
However, Golden State policymakers have enacted a property tax exemption for solar PV which is still going strong. This is a great perk, since solar panels will increase the value of your home by roughly 70% of system costs. So while the value of your home will go up, your property taxes won’t.
Example: If your solar system costs $20,000, your estimated property value increase of $14,000 will be tax exempt.
SGIP - California’s solar battery storage program
California is not only a national leader in solar, it is also a leader in solar battery storage, thanks in part to the Self Generation Incentive Program (SGIP).
If you install a battery storage system on your property that is serviced by PG&E, SCE, Southern California Gas, or SDG&E, you can take advantage of the SGIP incentive.
Battery storage systems that are smaller than 10 kW and are installed on a residential property are eligible for an incentive of $0.25 per watt hour of storage installed.
We outline how much you can save on battery storage when you use the SGIP incentive program in our breakdown of the SGIP rebate.
The SGIP equity budget for home battery 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 catalyze more battery storage deployment in low-income areas.
Residential equity systems will receive a rebate of $0.85 per watt hour installed.
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 $1.00 per watt hour of storage installed.
This covers almost the entire cost of a solar battery system. Check our blog on SGIP's equity resiliency program for more information.
California solar incentives for low-income households
Throughout the US, solar is adopted more in areas that have higher incomes even though low-income communities have the most to gain from the benefits of solar power.
Low income solar incentives have the ability to spur solar development in disadvantaged communities.
California has two types of low-income solar programs which are aimed for single-family homeowners and owners of multi-family properties:
The single-family affordable solar homes (SASH) program
The California SASH solar program provides huge solar money to single family homeowners. The program is administered by the non profit organization Grid Alternatives. They help provide green job training in low income areas to help people secure good-paying green energy jobs.
SASH program requirements
If you can qualify for the SASH program, you’ll get an upfront incentive of $3 per watt of solar installed.
So, if you want to install a 6 kilowatt system on your home, you’ll get an incentive of $18,000! That’s basically enough to pay for the entire cost of your solar system.
If you meet the following criteria, you could get this solar money:
- You’re a Pacific Gas & Electric, Southern California Edison, or San Diego Gas & Electric customer
- You own and live in your home
- Have a household income that is 80% of or below the the area median income
- Live in a home that is considered to be “affordable housing” by the California Public Utility code.
To check if you live in one of the approved areas, explore this map.
The multi-family affordable solar homes (MASH) program
The MASH program is designed for those fortunate enough to own a multi-family housing complex.
Those people can qualify for a large grant program to retrofit low-income multi-family housing developments with solar power.
Grants range from $1.10 to $1.80 per watt of solar installed. Exact amounts for different project types are listed on the California Public Utilities Commission website.
To qualify for MASH:
- The multi-family residential building must be financed by one of the following:
- Low-income housing tax credits
- Tax-exempt mortgage revenue bonds
- General obligation bonds
- Some kind of local, state, or federal grants and loans
- If at least 20% of the total units are sold or rented to lower-income residents.
There are some additional qualifications listed in the MASH program handbook. The MASH program is currently fully subscribed. New applications will be placed on a waitlist.
Cost of solar panels in your part of California after all applicable solar incentives
Showing data for:
Prices based on a 7.7kW system, after 26% federal tax credit
Solar prices near you
Payback period
4.7-5.8 years
Net profit (savings less system cost)
$85,974-$105,079
Average size system installed in CA in 2021
7.7kW
Solar panel cost calculator
Best 10 solar companies in California
504 solar companies in California provide pricing on SolarReviews. Here are the best rated companies near you.
4.92 382 Reviews
Latest review
Michael H., over 1 month
What a team!!! From the sales rep, Nelson, to the installers, we were kept informed about the project. We had personal schedule issues which Renova accommodated at the last moment. We chose Renova based on the recommendation of a friend who looked at three local solar companies. He sent the contract/proposals to a lawyer friend. The response back from the friend was, "Only consider Renova!". Their experience was good enough for us. It proved to be true.
Read more
Latest review
Michael H., over 1 month
What a team!!! From the sales rep, Nelson, to the installers, we were kept informed about the project. We had personal schedule issues which Renova accommodated at the last moment. We chose Renova based on the recommendation of a friend who looked at three local solar companies. He sent the contract/proposals to a lawyer friend. The response back from the friend was, "Only consider Renova!". Their experience was good enough for us. It proved to be true.
4.89 276 Reviews
Latest review
Roger, over 1 month
We needed new roof before we could install solar panels. Their roofing work was excellent and Ron Schwenk was especially knowledgeable in fitting our roof needs. Cosmic Solar was an excellent choice for us because we wanted battery backup.
Read more
Average cost (5kW system)
$19,300 ($3.86 per watt)
Latest review
Roger, over 1 month
We needed new roof before we could install solar panels. Their roofing work was excellent and Ron Schwenk was especially knowledgeable in fitting our roof needs. Cosmic Solar was an excellent choice for us because we wanted battery backup.
4.89 196 Reviews
Latest review
itang, over 1 month
Thank you so much, I've been wanting solar panels for years but they were so cost prohibitive. I'm glad it's gotten a lot less expensive and that Sunwork nonprofit offers solar panels at a low cost for those who can qualify. Appreciate it!
Read more
Average cost (5kW system)
$13,500 ($2.70 per watt)
Latest review
itang, over 1 month
Thank you so much, I've been wanting solar panels for years but they were so cost prohibitive. I'm glad it's gotten a lot less expensive and that Sunwork nonprofit offers solar panels at a low cost for those who can qualify. Appreciate it!
4.86 90 Reviews
Latest review
Grant Schrader, 1 week ago
We had a great experience from start to finish with Kota. Everything felt seamless. Our energy consultant, Nate Zicherman, was fantastic, and and inspires confidence every step of the way. If you’re in the market for solar, Kota is the way to go.
Read more
Latest review
Grant Schrader, 1 week ago
We had a great experience from start to finish with Kota. Everything felt seamless. Our energy consultant, Nate Zicherman, was fantastic, and and inspires confidence every step of the way. If you’re in the market for solar, Kota is the way to go.
4.85 75 Reviews
Latest review
bao bao, over 1 month
Meo and his team: knowledgeable, provide quality answers to your questions. Detail can be observed on their work and installation. Highly recommended.
Read more
Average cost (5kW system)
$14,900 ($2.98 per watt)
Latest review
bao bao, over 1 month
Meo and his team: knowledgeable, provide quality answers to your questions. Detail can be observed on their work and installation. Highly recommended.
4.82 65 Reviews
Latest review
Steve D., over 1 month
SOLRUS Engineering exceeded my expectations and provided fantastic customer service throughout the whole solar panel purchasing and installation process. Their solar panel selection, equipment and other mounting hardware and is top notch, and their prices were much better than the other quotes I received. Starting with Daniel (Energy Consultant) who walked me through the whole process and helped to educate me about solar panels systems. After listening to my needs, he quoted several different systems. He was very patient with me as I asked a lot of questions, and he was always happy to answer all the questions or concerns I had. They were the only company I contacted that offered a free site inspection before signing a contract. This was great because that way there were no surprises after I signed the contract. Chris (owner) came out for the site inspection and continued to educate me about solar systems. He improved the proposed panel layout, and we added a couple more panels and upgraded to a higher wattage better looking solar panel. The installation was beautifully done, and they finished in one day. They did a fantastic job and took care of some small roofing needs not in the quote. They also did the extra finish work like painting the conduit to match the roof shingles and house wall. They took care of all the building permits, inspection as well as the PGE paperwork required to start using the solar system. If you are looking for a professional, friendly, and honest solar installer with the best prices in town, do yourself a favor and give them a try. You will be glad you did like I am.
Read more
Average cost (5kW system)
$15,350 ($3.07 per watt)
Latest review
Steve D., over 1 month
SOLRUS Engineering exceeded my expectations and provided fantastic customer service throughout the whole solar panel purchasing and installation process. Their solar panel selection, equipment and other mounting hardware and is top notch, and their prices were much better than the other quotes I received. Starting with Daniel (Energy Consultant) who walked me through the whole process and helped to educate me about solar panels systems. After listening to my needs, he quoted several different systems. He was very patient with me as I asked a lot of questions, and he was always happy to answer all the questions or concerns I had. They were the only company I contacted that offered a free site inspection before signing a contract. This was great because that way there were no surprises after I signed the contract. Chris (owner) came out for the site inspection and continued to educate me about solar systems. He improved the proposed panel layout, and we added a couple more panels and upgraded to a higher wattage better looking solar panel. The installation was beautifully done, and they finished in one day. They did a fantastic job and took care of some small roofing needs not in the quote. They also did the extra finish work like painting the conduit to match the roof shingles and house wall. They took care of all the building permits, inspection as well as the PGE paperwork required to start using the solar system. If you are looking for a professional, friendly, and honest solar installer with the best prices in town, do yourself a favor and give them a try. You will be glad you did like I am.
4.80 62 Reviews
Latest review
Mark C, over 1 month
I chose Mynt Solar based on reviews and trustworthy customer sales and service.
Read more
Average cost (5kW system)
$14,750 ($2.95 per watt)
Latest review
Mark C, over 1 month
I chose Mynt Solar based on reviews and trustworthy customer sales and service.
4.79 66 Reviews
Latest review
Anonymous, over 1 month
As having solar system installed is a 20 years commitment, I spoke to 5 solar companies not just to compare the price but most importantly to see cross reference the information they provided.<br /><br />What I found out, sales reps mostly reply on the computer program generated quote. Interestingly, after analyzing the same PG&E electricity usage history, some quoted me 7.6kw and some quoted me 5.8kw system. That is a huge difference that I definitely would love to sort out why. Most sales rep will cite that is how their software calculates, some said that is based upon system needs to cover 100% PG&E usage. Only Ali from Highligh Solar clearly explained how PG&E Net Metering works, and made clear sense the system size he recommended.<br /><br />The most amazing about Ali is that any question I came up with, e.g. what is the back feed of my main panel, he can get me the right answer right away even after 6 weeks of his visit, with picture of my panel attached. <br /><br />Once the decision is made, Ali walked me through the proposal and contract review, and Dean, the owner, was also very accommodating to accept some revisions I requested.. <br /><br />Then Jesse helped with permits and project management, Sam helped with monitoring and PG&E application, plus the professional installation team who made the whole process as smooth as it gets.<br /><br />2 days after installation, I reported weird system reading from Solar Edge mobile app, Dean and Sam called Solar Edge and confirmed they need to replace the inverter, which then got scheduled and done in less than 2 days by next available technician.<br /><br />In the end, Dean also personally helped me understand Solar Edge monitor reading, and answer many solar production related questions!!!<br /><br />All in all, I highly recommend Highlight Solar for their well rounded professional team!!!!!! Their service deserved 6 stars!!!
Read more
Average cost (5kW system)
$19,550 ($3.91 per watt)
Latest review
Anonymous, over 1 month
As having solar system installed is a 20 years commitment, I spoke to 5 solar companies not just to compare the price but most importantly to see cross reference the information they provided.<br /><br />What I found out, sales reps mostly reply on the computer program generated quote. Interestingly, after analyzing the same PG&E electricity usage history, some quoted me 7.6kw and some quoted me 5.8kw system. That is a huge difference that I definitely would love to sort out why. Most sales rep will cite that is how their software calculates, some said that is based upon system needs to cover 100% PG&E usage. Only Ali from Highligh Solar clearly explained how PG&E Net Metering works, and made clear sense the system size he recommended.<br /><br />The most amazing about Ali is that any question I came up with, e.g. what is the back feed of my main panel, he can get me the right answer right away even after 6 weeks of his visit, with picture of my panel attached. <br /><br />Once the decision is made, Ali walked me through the proposal and contract review, and Dean, the owner, was also very accommodating to accept some revisions I requested.. <br /><br />Then Jesse helped with permits and project management, Sam helped with monitoring and PG&E application, plus the professional installation team who made the whole process as smooth as it gets.<br /><br />2 days after installation, I reported weird system reading from Solar Edge mobile app, Dean and Sam called Solar Edge and confirmed they need to replace the inverter, which then got scheduled and done in less than 2 days by next available technician.<br /><br />In the end, Dean also personally helped me understand Solar Edge monitor reading, and answer many solar production related questions!!!<br /><br />All in all, I highly recommend Highlight Solar for their well rounded professional team!!!!!! Their service deserved 6 stars!!!
4.78 87 Reviews
Latest review
wildhouse, 2 weeks ago
Every step of the process was very clear and easy. It could not have been easier or better!
Read more
Average cost (5kW system)
$16,800 ($3.36 per watt)
Latest review
wildhouse, 2 weeks ago
Every step of the process was very clear and easy. It could not have been easier or better!
4.77 32 Reviews
Latest review
Devin Yu, over 1 month
My husband and I both heard about the terrible experiences going solar. But with our SCE bill hitting over $400 in the summer we figured the risk was worth the reward. We weren't sure who to ask with our questions so we contacted a few companies that had great reviews. After comparing all the various solar companies we opted for Forme Solar due to their warranty and experience with solar repair. Well, it was the best thing we ever did. Going solar has cut our utility bill to a fraction of what it once was and we have a pool and two AC units. The customer service and installation was fast and responsive. I am very pleased with our solar system and would get it installed again with Forme Solar.
Read more
Latest review
Devin Yu, over 1 month
My husband and I both heard about the terrible experiences going solar. But with our SCE bill hitting over $400 in the summer we figured the risk was worth the reward. We weren't sure who to ask with our questions so we contacted a few companies that had great reviews. After comparing all the various solar companies we opted for Forme Solar due to their warranty and experience with solar repair. Well, it was the best thing we ever did. Going solar has cut our utility bill to a fraction of what it once was and we have a pool and two AC units. The customer service and installation was fast and responsive. I am very pleased with our solar system and would get it installed again with Forme Solar.
Solar guides for your California city
For more information about going solar near where you live, check out the following resources:
Useful links
Related solar news
Ben Zientara
September 20, 2021
Guide to going solar in PG&E territory
Our guide to getting solar panels for your home if you’re a Pacific Gas & Electric customer. PG&E solar programs can ensure you save a lot for years to come.
Ben Zientara
August 11, 2021
Net metering 3.0 in California: What homeowners need to know
After NEM 3.0 is enacted in California, the Golden State will likely not have a true net metering system, with reduced compensation and increased monthly fees on solar owners.
Ben Zientara
February 12, 2021
Big changes on the horizon for California net metering in 2022
California regulators are changing how solar owners connect to the grid & get credit for solar energy. The changes could greatly affect the solar industry.
Ben Zientara
January 26, 2021
The state of net metering in the United States in 2021
This annual report ranks the states for friendliness to home solar based on their net metering programs.
Ben Zientara
August 11, 2020
Solar Ready Vets and other solar jobs programs for veterans
The Solar Ready Vets program helps soldiers get training and secure jobs in the solar industry.