California Solar Incentives, Tax Credits & Rebates 2024
Last updated: 2026-01Incentive Score
Total Savings Estimate
A typical 8kW system in California costs $41,924. After the 30% federal tax credit: $29,347. Estimated annual savings: $1,500.
Federal Investment Tax Credit (ITC)
Federal Solar Investment Tax Credit (ITC)
Tax Credit30% of total system cost
The federal ITC allows you to deduct 30% of the cost of installing a solar energy system from your federal taxes. This applies to both residential and commercial systems with no cap on value.
Eligibility
Available to homeowners who own their solar system (purchased, not leased). Must have sufficient tax liability.
Expiration / Phase-Down
30% through 2032, steps down to 26% in 2033 and 22% in 2034
California State Incentives
Self-Generation Incentive Program (SGIP)
RebateVaries by storage capacity, typically $150-$1,000/kWh for battery storage
Rebate for installing energy storage systems paired with solar. Higher incentives available in equity and equity resiliency categories.
NEM 3.0 (Net Billing Tariff)
Net MeteringExport credits at avoided-cost rate, varies by time of use
New solar customers receive bill credits for excess energy exported to the grid at time-varying avoided cost rates. Battery storage strongly recommended.
California Solar Initiative (CSI) - Thermal
RebateUp to $1,875 for solar water heating
Rebates for installing solar water heating systems in residential buildings.
Tax Exemptions
property tax Exemption
Solar installations are 100% exempt from property tax assessment increases under the Active Solar Energy Tax Exclusion through 2027.
sales tax Exemption
California does not exempt solar equipment from state sales tax.
Utility Programs
Pacific Gas & Electric (PG&E)
- NEM 3.0
- Time-of-Use rates
- EV + Solar bundled rates
Southern California Edison (SCE)
- NEM 3.0
- Clean Energy Optimization billing
San Diego Gas & Electric (SDG&E)
- NEM 3.0
- Power Your Drive EV integration
Highlights & Drawbacks
Highlights
- ✓SGIP storage rebates can offset battery costs significantly
- ✓Property tax exclusion protects home value
- ✓Strong installer competition keeps costs competitive
Drawbacks
- !No sales tax exemption on solar equipment
- !NEM 3.0 significantly reduced export credit values vs NEM 2.0
- !No state income tax credit for solar
Source: DSIRE (Database of State Incentives for Renewables & Efficiency), U.S. Department of Energy, state energy offices. Data reflects programs available as of 2026-01.