California is widely regarded as one of the most solar-friendly states in the US, with a range of financial incentives and a strong commitment to renewable energy. In this blog post, we will examine California’s solar incentives and compare them to other states, using a rating scale of 1-10 (10 being the most solar-friendly state).
Quick Read:
- California offers several financial incentives for solar installation, including grants, tax credits, and rebates.
- The average cost of electricity in California is high compared to other states, making solar energy an attractive option for homeowners.
- On a scale of 1-10, California ranks as a 9 for solar-friendliness, with high incentives, favorable policies, and a strong commitment to renewable energy.
Grants, Tax Credits, and Rebates:
- California Solar Initiative (CSI)
- Amount: Varies by utility and project size
- Type: Rebate program
- Description: The CSI offers cash rebates for residential and commercial solar installations. The rebate amount is based on the system’s size, location, and expected performance, and is designed to help offset the upfront cost of installation.
- Net Energy Metering (NEM)
- Amount: Varies by utility
- Type: Utility program
- Description: California’s NEM program allows solar system owners to receive credits on their utility bill for excess electricity generated by their solar system. The credits can be used to offset the cost of electricity purchased from the utility.
- Feed-In Tariff (FIT) Program
- Amount: Varies by utility
- Type: Utility program
- Description: Some California utilities offer a FIT program that pays solar system owners for the excess electricity they generate and feed back into the grid. The payment rate varies by utility and is designed to encourage the development of larger commercial and industrial solar systems.
- Property Tax Exclusion
- Amount: Varies by locality
- Type: Property tax exclusion
- Description: California allows localities to offer a property tax exclusion for solar installations. The exclusion is based on the added value of the system and can vary by locality. This exclusion can help reduce the overall cost of owning a solar system.
- Sales Tax Exemption
- Amount: 100% exemption on the sales tax for solar equipment and installation
- Type: Sales tax exemption
- Description: California offers a sales tax exemption for solar equipment and installation. This exemption applies to the purchase and installation of solar panels and related equipment.
- California Solar Initiative Thermal Program (CSI-Thermal)
- Amount: Varies by utility
- Type: Rebate program
- Description: The CSI-Thermal program offers cash rebates for solar water heating systems. The rebate amount is based on the expected performance of the system and is designed to help offset the upfront cost of installation.
- Multifamily Affordable Solar Housing (MASH) Program
- Amount: Varies by project
- Type: Rebate program
- Description: The MASH program offers cash rebates for solar installations on affordable housing developments. The rebate amount is based on the size of the system and the expected performance, and is designed to help increase access to solar energy for low-income households.
Average Cost of Electricity:
The average cost of electricity in California is higher than the national average, making solar energy an attractive option for homeowners. According to the U.S. Energy Information Administration, the average retail price of electricity in California was 20.46 cents per kilowatt-hour in 2020, compared to the national average of 10.54 cents per kilowatt-hour.