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California Solar Incentives: Complete Guide for 2025

Comprehensive guide to all available solar incentives in California for 2025, including federal tax credits, state programs, utility rebates, and local incentives.

By Gavin Elliott•12 min read•Updated 16 January 2025

California leads the nation in solar adoption, and the state's comprehensive incentive programs play a major role in making solar power accessible and affordable. This complete guide covers all available solar incentives in California for 2025, from federal tax credits to local utility programs.

California solar incentives overview

Total potential savings: 30-50% of system cost Federal tax credit: 30% of total system cost State programs: Multiple rebate and exemption programs Utility programs: PG&E, SCE, and SDG&E specific incentives Local programs: City and county level incentives Timeline: Most programs available through 2032

Federal solar incentives

Investment Tax Credit (ITC)

Amount: 30% of total system cost Eligibility: All residential solar installations Timeline: Available through 2032 How to claim: File with annual tax return

Example calculation:

  • System cost: $20,000
  • Federal tax credit: $6,000 (30%)
  • Net cost: $14,000

Important notes:

  • Credit can be carried forward if tax liability is insufficient
  • Applies to solar panels, inverters, mounting hardware, and installation
  • Available for both purchased and financed systems
  • No income limits or phase-out periods

Residential Clean Energy Credit

Amount: 30% of qualified expenses Eligibility: Residential properties Timeline: 2022-2032 Coverage: Solar panels, battery storage, geothermal heat pumps

California state-level incentives

Self-Generation Incentive Program (SGIP)

Purpose: Encourage energy storage adoption Eligibility: Residential and commercial customers Timeline: Ongoing (funds may be limited)

Residential battery storage rebates:

  • Small systems (1-3 kWh): $200/kWh
  • Medium systems (4-10 kWh): $400/kWh
  • Large systems (10+ kWh): $1,000/kWh

Example: 10 kWh battery system = $10,000 rebate

Requirements:

  • Must be connected to the grid
  • Must participate in demand response programs
  • Installation by qualified contractor

Property Tax Exemption

Benefit: Solar installations don't increase property tax assessments Eligibility: All residential solar installations Timeline: Permanent Coverage: Solar panels, inverters, mounting hardware

How it works:

  • Solar system value excluded from property tax calculations
  • No annual renewal required
  • Applies to all California counties
  • Automatic for most installations

Sales Tax Exemption

Benefit: No sales tax on solar equipment Eligibility: Residential solar installations Timeline: Permanent Coverage: Solar panels, inverters, mounting hardware

Savings example:

  • System cost: $20,000
  • Sales tax rate: 7.25% (varies by county)
  • Tax savings: $1,450

Utility-specific incentives

Pacific Gas & Electric (PG&E)

Service area: Northern and Central California Programs available:

Solar on Multifamily Affordable Housing (SOMAH):

  • Eligibility: Multifamily affordable housing properties
  • Benefit: Free solar installation
  • Timeline: Ongoing
  • Coverage: 100% of system cost

Energy Storage Program:

  • Eligibility: Residential customers
  • Benefit: $400/kWh for battery storage
  • Timeline: Ongoing
  • Requirements: Must participate in demand response

Solar Choice Program:

  • Eligibility: Customers who can't install rooftop solar
  • Benefit: Purchase solar energy at reduced rates
  • Timeline: Ongoing
  • Coverage: 50-100% of energy needs

Southern California Edison (SCE)

Service area: Central and Southern California Programs available:

Residential Solar Program:

  • Eligibility: Residential customers
  • Benefit: $0.25/Watt rebate (up to $1,000)
  • Timeline: Ongoing
  • Requirements: Must use SCE-approved installer

Energy Storage Program:

  • Eligibility: Residential customers
  • Benefit: $500/kWh for battery storage
  • Timeline: Ongoing
  • Requirements: Must participate in demand response

Time-of-Use Rate Plans:

  • Eligibility: All customers
  • Benefit: Lower rates during solar production hours
  • Timeline: Ongoing
  • Coverage: Reduced electricity costs

San Diego Gas & Electric (SDG&E)

Service area: San Diego County Programs available:

Residential Solar Program:

  • Eligibility: Residential customers
  • Benefit: $0.30/Watt rebate (up to $1,500)
  • Timeline: Ongoing
  • Requirements: Must use SDG&E-approved installer

Energy Storage Program:

  • Eligibility: Residential customers
  • Benefit: $600/kWh for battery storage
  • Timeline: Ongoing
  • Requirements: Must participate in demand response

Net Energy Metering (NEM) 3.0:

  • Eligibility: New solar installations
  • Benefit: Grid export compensation
  • Timeline: Ongoing
  • Coverage: All excess energy production

Local and municipal incentives

City-level programs

Many California cities offer additional incentives:

Los Angeles:

  • Expedited permitting for solar installations
  • Reduced permit fees (50% discount)
  • Solar-ready home requirements for new construction

San Francisco:

  • Green building requirements
  • Solar installation assistance programs
  • Property tax abatements for green buildings

San Diego:

  • Solar permitting assistance
  • Green building incentives
  • Community solar programs

Sacramento:

  • Solar installation grants
  • Property tax exemptions
  • Green building requirements

County-level programs

Los Angeles County:

  • Solar installation assistance
  • Property tax exemptions
  • Green building incentives

Orange County:

  • Solar permitting assistance
  • Property tax exemptions
  • Energy efficiency programs

San Diego County:

  • Solar installation grants
  • Property tax exemptions
  • Green building requirements

Additional financial incentives

Solar loans and financing

California-specific options:

  • 0% interest loans: Available through some utilities
  • Low-interest loans: 2-5% APR through state programs
  • Property Assessed Clean Energy (PACE): Repay through property taxes

PACE financing details:

  • Interest rates: 3-8% APR
  • Terms: 10-25 years
  • Repayment: Added to property tax bill
  • Transferability: Stays with property if sold

Energy efficiency incentives

Combined solar + efficiency programs:

  • HVAC upgrades: $500-$2,000 rebates
  • Insulation improvements: $200-$1,000 rebates
  • Window upgrades: $100-$500 rebates
  • Smart thermostats: $50-$200 rebates

How to claim California solar incentives

Step-by-step process

  1. Install solar system: Use qualified contractor
  2. Document costs: Keep all receipts and invoices
  3. Claim federal credit: File with tax return
  4. Apply for state programs: Submit applications to utilities
  5. Check local programs: Contact city/county offices
  6. Monitor rebates: Track application status

Required documentation

  • Installation contract: Detailed cost breakdown
  • Receipts and invoices: All equipment and labor costs
  • Permit documentation: Local building permits
  • Utility interconnection: Grid connection approval
  • Warranty information: Equipment warranties

Application deadlines

  • Federal ITC: Claim on next tax return
  • SGIP rebates: Apply within 6 months of installation
  • Utility programs: Vary by program (check individual requirements)
  • Local programs: Vary by city/county (check local requirements)

Maximizing your incentive savings

Strategic timing

  • Install before 2032: Ensure federal ITC availability
  • Check utility deadlines: Some programs have limited funding
  • Plan for tax year: Ensure sufficient tax liability
  • Consider seasonal variations: Some programs have seasonal availability

System optimization

  • Size appropriately: Match system to energy needs
  • Include storage: Qualify for additional SGIP rebates
  • Use qualified contractors: Ensure program eligibility
  • Document everything: Maintain complete records

Long-term planning

  • Monitor program changes: Incentives may be modified
  • Plan for upgrades: Future equipment may qualify for new programs
  • Consider expansion: Larger systems may qualify for additional incentives
  • Stay informed: Subscribe to utility and state program updates

Next steps for California solar incentives

Ready to maximize your solar savings? Here's your action plan:

  1. Research your utility: Check PG&E, SCE, or SDG&E specific programs
  2. Contact local government: Inquire about city and county incentives
  3. Plan your installation: Ensure eligibility for all programs
  4. Choose qualified contractors: Verify program participation
  5. Document everything: Keep complete records for all applications

Related resources:

Return to: California solar overview

Frequently Asked Questions

What solar incentives are available in California in 2025?
California offers the federal 30% ITC, SGIP battery storage rebates up to $1,000/kWh, property tax exemptions, sales tax exemptions, and utility-specific programs from PG&E, SCE, and SDG&E.
The federal Investment Tax Credit (ITC) is 30% of the total system cost for residential solar installations through 2032. This can reduce a $20,000 system to $14,000 after the credit.
Yes, California offers SGIP battery storage rebates, property tax exemptions for solar installations, sales tax exemptions on solar equipment, and various utility-specific rebate programs.
Yes, many California cities and counties offer additional incentives including expedited permitting, reduced permit fees, and local rebate programs. Check with your local government for specific offerings.
For federal incentives, claim the ITC on your tax return. For state and local programs, applications vary by program - some are automatic, others require separate applications through utilities or local governments.

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