Solar Incentives in California 2023

August 29, 2023

California, renowned for its sunny skies and forward-thinking energy policies, remains a leader in promoting solar energy. In 2023, the Golden State continues to roll out a plethora of incentives to motivate homeowners and businesses to embrace solar.

Here's an in-depth look at the solar incentives available in California:

1. Statewide Solar Incentives

California Solar Initiative (CSI): Although the CSI General Market Program concluded in 2016, California's dedication to renewable energy is unwavering. Solar adopters can avail of the State’s Net Energy Metering Program (NEM), which offers financial credits for power returned to the grid by consumers.

Self-Generation Incentive Program (SGIP): SGIP provides immediate rebates for the installation of energy storage systems. The rebate's value is contingent on the battery's size and diminishes as more installations take place.

Equity Resilience Incentives: Tailored for specific demographics, including low-income households and those in high-risk fire zones, this program offers additional incentives.

Disadvantaged Communities—Single-family Solar Homes (DAC-SASH): Designed to amplify savings for low-income households in disadvantaged communities, this program can cover up to 100% of the solar system's total cost and is set to run until 2030.

Solar Energy System Property Tax Exclusion: Until the end of 2024, installing a solar system won't lead to an increase in property taxes, ensuring homeowners aren't penalized for their green initiatives.

2. Local Solar Incentives

Here are just a few local incentives you might qualify for:

Sacramento Municipal Utility District (SMUD) stipend: SMUD patrons can avail a $150 stipend for solar system meter cabinet and equipment installation.

Rancho Mirage Energy Authority (RMEA) rebate: RMEA grants a $500 rebate for new solar installations or expansions.

GreenFinanceSF: San Francisco denizens can finance their solar endeavors through property taxes, potentially securing lower interest rates.

San Diego Green Building Program: This initiative offers up to a 7.5% reduction in permit fees for home renovations incorporating solar panels or other green upgrades.

3. Net Metering in California: A Deeper Dive

Net energy metering (NEM) is a boon for homeowners, allowing them to accrue energy bill credits for surplus energy their solar installations produce.

However, a significant shift occurred when California transitioned from the NEM 2.0 to the NEM 3.0 program in April 2023. Unlike the previous structure that credited consumers at the full retail rate, the NEM 3.0 program, technically termed "net billing," credits at the avoided-cost rate. This rate represents the utility's production cost, which is notably lower than the retail rate.

Those who applied for net metering before April 15, 2023, are grandfathered into the NEM 2.0 program, while others fall under NEM 3.0. This shift extends the payback period for many solar adopters in California. (Get in contact with us so we can teach you how to overcome this!)

4. Federal Solar Tax Credit: Expanding the Horizon

Beyond state and local incentives, Californians can also tap into the federal solar investment tax credit (ITC). This credit empowers homeowners to claim 30% of their entire solar installation costs on federal taxes!

It's essential to note that this isn't a tax refund but a credit that reduces tax liabilities. The ITC has been a significant driver for solar adoption across the U.S. The 30% rate is set to persist until 2032, after which it will taper to 26% in 2033 and 22% in 2034, unless renewed.


Tapping into these solar credits increases the return on investment you make in solar, but you know what gets you an even better ROI?

Getting solar for an affordable price!

Solar sales bros, middlemen, and installation companies around the country are lining their pockets with your hard earned money. But you don’t have to let them.

At DIY Solar, we cut out all of that crap. We provide you a customized solar system and let you install it yourself (if you’d like), making it much more affordable (about 40% less than the national average)!

Interested in learning more? Fill out our quoting form and we will text you soon!

Sources: Forbes, CPUC, MarketWatch

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