California Property Tax Exemptions for Energy
California offers property tax exemptions for installed solar systems. Property tax exemptions allow businesses and homeowners to exclude the added value of a system from the valuation of their property for taxation purposes. A Solar PV system can increase the value of your home by a multiple of 20 times your annual electricity savings (a 5kW system increases the value of your home close to $17,000). A property tax exemption makes it more economically feasible for a taxpayer to install a solar system on a residential or commercial property.
Storage Rebate Program
Recently California’s Governor Brown signed SB 700. This adds approximately $800 million in additional funding for SGIP and extends the program through 2025.
The California energy storage rebate program was established in 2001. Until recently, applying for SGIP was a difficult process, especially for residential customers. The rebate previously worked by making the program funds available on a specific day, and most of the funds were allocated to big industrial-sized energy storage projects, leaving very little left over for homeowners looking to store their solar energy.
For homeowners who are customers of either SDG&E, PG&E, SCE and SCG are eligible for an incentive for up to $400 per kilowatt-hour when you install a home battery. This huge incentive has the ability to cover most of your battery costs. How big the battery is will determine the value you receive per kilowatt.
For example, if you were to install a Tesla Powerwall 2 with a 14 kWh capacity. Under SGIP, the first 10 kWh will recieve up to a $400/kWh incentive, and the remaining is eligible for a $200/kWh incentive. This is worth up to a total of $4,800 towards the Powerwall equipment, which is worth $5,500!
Los Angeles Department of Water and Power: If you’re a customer of LADWP, you’re eligible for a rebate of $0.25/W of installed solar power, which means you could get nearly $1,500 back when you install a standard 6kW system. Like Silicon Valley Power’s incentive, the value of the rebate drops as more people participate in the program.
Rancho Mirage Energy Authority: If you're installing solar on a home in Rancho Mirage, the RMEA will provide a rebate of $500 to cover the cost of your permit fee. The rebate is given after the utility company has granted permission to operate (PTO).
California's Single-Family Affordable Solar Housing Program (SASH)
The SASH program was the first of its kind in the United States, and to this day, it remains the single most valuable low-income solar program for homeowners. The program is administered by Grid Alternatives, which is an excellent non-profit organization that both helps low-income families go solar and teaches people from all walks of life how to work in the solar industry.
Through Grid Alternatives, low-income homeowners can participate in the SASH program and receive additional funding to completely cover the cost they would have paid for a solar system. Here are the details that qualify a homeowner for the SASH Program:
Own and live in their home
Be customers of Pacific Gas & Electric (PG&E), Southern California Edison (SCE), or San Diego Gas & Electric (SDG&E)
Have a household income of 80% or below the median income for their area
Live in a home defined as “affordable housing” by California Public Utilities Code 2852
Federal Income Tax Credit
The federal solar income tax credit is a, 30% of the total solar energy installation cost, tax credit. This federal solar income tax credit is available to both families and businesses. There are two important key understandings related to the federal solar income tax credit. The first is that money owed or paid to the IRS, can now be applied toward paying for your family or busineess, 25 -30 year, electric utility costs. The second is that a family or business must have the federal income tax liability, in which to apply the federal income tax credit. Tax liability can be an issue for those that are retired or some business situations. Even if you don’t have enough tax liability to claim the entire credit in one year, you can “roll over” the remaining credits into future years for as long as the tax credit is in effect. However, remember that if you sign a lease or PPA with a solar installer, you are not the owner of the system, and thus you cannot receive the tax credit.
2016 – 2019: The tax credit remains at 30 percent of the total solar installation cost of the solar energy system.
2020: The federal income tax credit will be reduced to 26 percent of the total solar installation cost of the solar energy system.
2021: The federal income tax credit will be reduced to 22 percent of the total solar installation cost of the solar energy system.
2022+: The federal income tax credit will be reduced to 0 percent of the total solar installation cost of the solar energy system for residential installations. The federal income tax credit will be reduced to 10 percent of the total solar installation cost of the solar energy system for any commercial installation. Owners of a new commercial solar energy systems can deduct 10 percent.