California Solar Power Incentives, Rebates, and Tax Credits.

Updated 2/4/09 -

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Governor Arnold Schwarzenegger has ensured California, which comprises about 85% of all solar installations in the country, continues to lead the way when it comes to deriving electricity from the sun. Most importantly, he has worked with the utilities to require 20% of their total energy mix comes from renewable sources by 2010. Therefore, it is no surprise plans for solar power plants are exploding. Go Solar California is the home page for the California Solar Initiative. Stay up to date with their newsletter, use their handbook, and check out the video from our Governer Arnold Schwarzenegger.

The California Solar Initiative – The State Rebate for Solar

The CSI is a huge part of the California Million Solar Roofs program. CSI was formulated to create 3000MW of new solar power by 2017. The California Public Utilities Commission administers the bulk of the program and has earmarked funding for existing homes, new and existing businesses, and public entities. The California Energy Commission manages the remainder – a 10-year, $400 million program to encourage solar in new home construction through its New Solar Homes Partnership.

For specifics on how these incentives pencil out for you, the California home or business-owner, check out the charts below. If this is at all confusing, have an expert contact you to clear things up (As of 2/3/09):

First, take a look at the top chart and locate your utility in the first column. For example, let’s pretend you’re a PGE residential customer. The next column over is the current rebate step for the utility. Your current step is: 5.

Back in 2007, after program kickoff, all utilities were at step 2 (see second chart above). This entailed a huge rebate direct to the homeowner of $2.50/installed watt of solar. However, as more and more solar gets installed, this rebate diminishes. Currently, as a PGE customer, since we’re now at step 5 you’re entitled to a $1.55/installed watt of solar rebate.

Clearly, the time to get on the bandwagon is now. No one really knows when the next EPBB incentive decrease will hit, although this site helps you guess. Amazingly PG&E is reporting no backlog for CSI applications.

How does the current incentive pencil out for you? We recommend you sign up to have one of our personable California solar experts contact you to evaluate your home for solar, discuss several financing options unique to your situation, and clearly break out your incentives and expected payback period.

In the meantime, suppose your California home consumes about 1200kWh monthly, and you are looking to knock out your $170 power bill. We estimate a 6Kw system would do the job.

Projected cost for both equipment and installation is a mid-range estimate of about $8/watt or $48,000, offset by the 30% federal tax credit and the $1.55/watt EPBB rebate. So, subtract the federal tax credit and we’re down to $33,600 ($48,000 * .30 = $14,400 tax credit).

Next, let’s calculate the EPBB rebate at $1.55/watt. Since we’re installing 6000 watts (6kW system) the rebate amounts to $9,300 (6000 * $1.55 = $9,300). This comes as a check directly back to you or your installer who will reduce the cost by this amount. Now, our net initial cost amounts to $24,300.   

This may still seem like a lot of cash. But those incentives have halved the cost of your system. Moreover, consider if you are consuming 1200kWh per month, your monthly California electric bill currently amounts to roughly $170 a month which is now an afterthought.

Additionally, electric rates have not been flat over the past years, nor is there any conceivable reason to conclude they will do anything but increase at at least a rate of 4% year over year. 25 years from now, without solar, you could easily be looking at a $400+ electric bill.

Don’t think it’s possible? Think again. Electricity rates have been increasing over the past decade at a rate of 10% year over year (see below).

You can secure very reasonable rates on green energy loans (as low as 6%). If you crunch the numbers, we find many Californians are able to install a solar system and pay the loan monthly at parity with their existing electric bill. Again, an expert can show you how this works for you. All this, and you are able to lock in a fixed price for the power you produce and possibly get into a lower energy electric rate tier from your power company for using less energy.

Moreover, the value of your home will immediately increase by 20 times your annual electricity savings. In our example above, this amounts to a little over $40,000 ($170 * 12months * 20 = $40,800). This is an instantaneous, guaranteed 67% return on your $24,000 investment. Not only that, but this property value increase is tax exempt! Alert us to a similar guaranteed investment return outside of a Ponzi scheme and we’ll personally come to your house and bake you a cake.

Finally, let’s not forget the obvious: You’re saving 1200 kWh of energy derived from the grid a month. At 1.336 pounds of carbon dioxide per kWh, this means you save over 150 TONS of greenhouse gas in 25 years. That’s equivalent to driving across the country 75 times. Sound good? Get the ball rolling by getting in touch with our personable solar experts in California.

California Solar Tax Credits

Unfortunately, both solar and wind tax credits and California went away 12/31/05. There were probably not replaced because the CSI was magnificently large ($3.3 Billion) and enough to get the job done.

Miscellaneous Notes

Low income homes can receive up to a 20% discount on their power bills.

Unlike many other states, California net metering laws do not require California to buy excess power if you generate more than you use in a year.

Business Utility Rates, Rebates and Incentives for Solar

A program called Community Choice allows aggregation the electric loads of residents, businesses and municipal facilities to facilitate the purchase and sale of electrical energy. Go free market! You will soon be able to choose your electric energy supplier! You already can if you live in the San Joaquin Valley.

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