Taxes & Incentives
The U.S. has a long history of supporting energy infrastructure through the U.S. tax code. The market certainty provided by a long-term investment tax credit (ITC) for solar energy has supported private investment in manufacturing and project construction, a vital part in meeting our nation's energy policy goals, driving cost-cutting innovation and job growth.
The ITC reduces tax liability for individuals or businesses that purchase qualifying solar energy technologies, encouraging investment and spurring growth in solar energy.
The 1603 Treasury Program allows developers to take a federal grant in lieu of the ITC, allowing taxpayers to maximize the return and value of existing energy tax incentives.
Similar to many other sectors of the economy, the U.S. Tax Code allows businesses investing in qualifying solar energy property to recover certain capital costs through income tax deductions.
The Department of Energy Loan Guarantee Program (LGP) supports financing of renewable projects and manufacturing facilities, helping to deploy clean energy technologies across the U.S.
Many new residential solar PV systems qualify California homeowners for a property tax exemption up to the full amount of the system’s cost.
The California Solar Initiative provides cash back to customers of California’s three investor-owned utilities (Pacific Gas & Electric, Southern California Edison and San Diego Gas & Electric). If you currently get your electricity from one of them and your property receives continuous sunlight from 11am – 6pm, you qualify for rebate money through the CSI.
Low-income (SASH and MASH) and new construction (NSHP) rebates are also handled by the CSI, making it a convenient, centralized program many Californians can find most of their available rebates in.
The Los Angeles Department of Water and Power (LADWP) offers an up-front, lump sum incentive payment based on your solar electric system’s expected production. The payment calculation is based on a number of factors, but it is in effect both an up-front and performance-based rebate rolled into one (and delivered up-front), which makes going solar that much easier for LADWP customers.
The LADWP also offers a feed-it tariff rebate structure for systems between 30kW and 3MW. Incentive payment rates begin at $0.17/kWh produced and decline as more systems utilizing the tariff come online. LADWP customers may choose the Solar Incentive Program or the Feed-in Tariff, but not both.
The Sacramento Municipal Utility District (SMUD) is providing loans up to $30,000 for the purchase of a solar water heating system. The loan is at 8.57% and must be repaid in 10 years.
The Sacramento Municipal Utility District (SMUD) offers grid-tied system owners a $0.25/AC Watt incentive. Since AC Watts are used to calculate the incentive, its amount is based on expected system performance.
Other California Municipal Programs
Residents of unincorporated Marin County and Marin County employees can get a $500 rebate for solar PV systems.
The San Francisco Public Utilities Commission is offering homeowners who install solar PV systems 1 kW or larger a cash incentive. The incentive is $2,000 – $2,750 in most cases, but lower-income homes can qualify for up to $10,000.
California Property Tax Exemption
California Law provides a property tax exemption for qualified solar energy systems.
California Revenue and Taxation Code, section 73.
73. (a) Pursuant to the authority granted to the Legislature pursuant to paragraph (1) of subdivision (c) of Section 2 of Article XIII A of the California Constitution, the term “newly constructed,” as used in subdivision (a) of Section 2 of Article XIIIA of the California Constitution, does not include the construction or addition of any active solar energy system, as defined in subdivision (b).