Solar Incentives in California

Going solar in California has never been more affordable, thanks to a variety of federal, state, and local incentives available in 2025. Whether you’re a homeowner, business owner, or renter, these programs can significantly reduce the cost of your solar panel system and help you save on energy bills for years to come.

In this guide, we’ll break down the top solar incentives in California for 2025, so you can maximize your savings and make the switch to clean energy with confidence.

Why Go Solar in California in 2025?

California continues to lead the nation in solar energy adoption, and for good reason:

• High Electricity Rates: California’s electricity rates are among the highest in the U.S., making solar panels a smart financial investment.
• Environmental Benefits: Solar energy reduces greenhouse gas emissions and helps combat climate change.
• Energy Independence: Generate your own power and protect yourself from rising energy costs.

With the latest incentives, there’s no better time to go solar. Let’s dive in!

Top Solar Incentives in California for 2025

1. Federal Solar Tax Credit (ITC)

• What It Is: The federal Investment Tax Credit (ITC) allows you to deduct 30% of the cost of your solar panel system from your federal taxes.
• Eligibility: Available to homeowners and businesses that purchase their solar system (cash or loan).
• How to Claim: File IRS Form 5695 when submitting your federal tax return.
• 2025 Update: The ITC remains at 30% through 2032, thanks to the Inflation Reduction Act.

2. California Solar Initiative (CSI) – Thermal Program

• What It Is: This program provides rebates for solar water heating systems, which can reduce your energy bills by up to 50%.
• Rebate Amount: Varies by system size and location, but typically ranges from $1,000 to $3,000.
• Eligibility: Homeowners and businesses installing eligible solar thermal systems.
• How to Apply: Visit the CSI Thermal Program website for details.

3. Net Energy Metering (NEM 3.0)

• What It Is: NEM 3.0 allows you to sell excess solar energy back to the grid in exchange for credits on your electricity bill.
• How It Works: Your solar system generates power during the day, and any excess energy is sent to the grid. You receive credits that offset your energy usage at night or during cloudy days.
• 2025 Update: NEM 3.0 includes new time-of-use rates, so it’s important to size your system correctly to maximize savings.

4. Self-Generation Incentive Program (SGIP)

• What It Is: SGIP offers rebates for adding battery storage to your solar panel system, allowing you to store energy for use during power outages or peak hours.
• Rebate Amount: Up to $200 per kWh of battery storage capacity.
• Eligibility: Homeowners, businesses, and nonprofits installing eligible battery systems.
• How to Apply: Visit the SGIP website for application details.

5. Property Assessed Clean Energy (PACE) Financing

What It Is: PACE financing allows you to pay for your solar panel system through your property taxes, with no upfront costs.

• Benefits: Low-interest rates and long repayment terms (up to 20 years).
• Eligibility: Available to homeowners in participating California counties.
• How to Apply: Contact a PACE provider like Renew Financial or Ygrene.

6. Local Utility Rebates

What It Is: Many California utilities offer additional rebates and incentives for going solar.

• Examples:
  • PG&E: Rebates for energy-efficient upgrades, including solar panels.
  • SCE (Southern California Edison): Offers incentives for low-income homeowners through the Disadvantaged Communities – Single-Family Solar Homes (DAC-SASH) program.
  • LADWP (Los Angeles Department of Water and Power): Rebates for solar panel installation and battery storage.
• How to Apply: Check with your local utility for available programs.

7. Disadvantaged Communities – Single-Family Solar Homes (DAC-SASH)

• What It Is: This program provides no-cost solar panel systems to low-income homeowners in disadvantaged communities.
• Eligibility: Must meet income requirements and live in a qualifying area.
• How to Apply: Visit the GRID Alternatives website for more information.

8. Sales Tax Exemption

• What It Is: California offers a sales tax exemption on the purchase of solar panel systems, saving you an additional 7.25% on average.
• Eligibility: Available to all California residents purchasing solar equipment.
• How to Claim: The exemption is automatically applied at the point of sale.

9. Property Tax Exclusion for Solar Systems

• What It Is: Installing a solar panel system won’t increase your property taxes, even though it adds value to your home.
• Eligibility: Available to all California homeowners.
• How to Claim: No action required—the exclusion is automatic.

10. Solar Rights Act

• What It Is: This California law protects your right to install solar panels, even if you live in a homeowners association (HOA).
• Key Protections:
  • HOAs cannot unreasonably restrict solar installations.
  • You have the right to sunlight access for your solar panels.

How to Maximize Your Solar Savings in 2025

1. Combine Incentives: Stack multiple incentives (e.g., federal tax credit + SGIP rebate) to maximize your savings.
2. Choose the Right Installer: Work with a licensed solar installer who can help you navigate the incentive application process.
3. Monitor Your System: Use monitoring tools to ensure your system is performing optimally and maximizing your energy savings.

Conclusion

With so many incentives available in 2025, there’s never been a better time to go solar in California. From the 30% federal tax credit to local utility rebates and battery storage incentives, these programs can save you thousands of dollars and help you achieve energy independence.

Ready to take the next step? Contact trusted solar installers in California today and start reaping the benefits of clean, renewable energy.