Financial Incentives

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A solar array doubling as a pool shade structure in Santa Barbara. California and Federal Solar Tax Incentives
A solar installation doubling as a shade structure in Montecito, California.

California is fortunate to have an abundance of solar energy potential that is only just beginning to be utilized. To give homeowners an incentive to go solar both the federal government and the County of Santa Barbara have developed programs.

California Solar Energy Incentives

The California Solar Initiative (CSI) through PG&E and SCE that offered cash incentives for installing residential and commercial solar electric systems on existing homes is closed. The program was designed to give the industry a boost and it was very successful. Because of the success of this program, the demand and production of solar increased and caused the overall price of solar to decrease. The result is that solar is actually cheaper today without incentives in comparison to the price of solar with incentives while this program was running.

That being said, there are still cash incentives available for new homes that Title 24 Energy Efficiency measures. Incentives are available for both market price homes and low income housing at different rates per kW of solar installed. Applications are handled by the homeowner via an independent verifier after the installation is completed. Follow these links for more information on the CSI and to a list of FAQ’s.

Federal Investment Tax Credit (ITC)

Solar Incentive Tax Credit graph
A graph showing the federal solar Incentive Tax Credit progression.

The 26% federal tax credit remains, and so does the potential for unlimited savings on your energy bill once you start taking advantage of the world’s most prolific energy source. The federal solar ITC is 26% of the system’s net cost for both residential and commercial properties.

As of 2021 this rate will decrease over the next 2 years (depending on if the installation is residential or commercial). Year 2021 installations qualify for a 22% rebate, 2022 for 10%, and 2023 installations only qualify for 10% if it is a commercial installations. Qualifying commercial solar energy equipment is also eligible for a cost recovery period of five years according to the Internal Revenue Code.

What Qualifies for the Federal Solar Incentive?

The ITC is fairly liberal with the list of work that qualifies for their incentive. Any work that is related to the installation of solar (whether adding a few panels or installing a new system) gets the 26% ITC. This mean that any of the following qualify:

  • Adding solar panels
  • Purchasing batteries for backup (even for an existing system)
  • Adding an Electric Vehicle charger
  • Re-roofing (for the area of the roof where solar will be installed)
  • Any excavation (for ground mounts)
  • Tree trimming costs
  • Electrical service upgrades
  • Any expense for water pumping (for solar well pumps)

For more information on the federal solar ITC incentive, click here.

To learn about our grid-tied, off-grid, or battery backup installations, follow the respective links.

Agricultural Solar Incentives

An agricultural solar installation that qualifies for a solar incentive.

The Environmental Protection Agency’s National Clean Diesel Campaign has a grant opportunity for the agricultural sector. The National Clean Diesel Funding Assistance Program awards competitive grants to fund projects that implement EPA or CARB verified and certified diesel emission reduction technologies.

The USDA also offers loans and grants to agricultural producers and rural small businesses to purchase or install renewable energy systems or make energy efficiency improvements. Small businesses in eligible rural areas and agricultural producers with at least 50% of gross income coming from agricultural operations qualify to apply.

To learn more about our agricultural solar installations, follow the link.