There are several programs that can reduce the entire cost of installation a solar energy system. California is the US leader in solar energy incentives, financing options, and rebates.
The Public Utilities Commission set up the California Solar Initiative in 2006, which provided over $3 billion for solar energy projects. This incentive hopes to put solar panels on one million roofs throughout the state, which would result in 3,000 megawatts of solar capacity by 2016. California's three major utilities PGE, SCE, and SDG&E sponsor a rebate called the Expected Performance Based Buydown that would provide per-watt rebates for commercial systems.
In July 2010, the EPBB the rebate available for systems installed in small-medium sized residential and commercial buildings was $0.65/watt for PG&E and SDG&E, and was $0.09/kWh for PBI. For SCE, the rebate available for residential systems (small and medium) was $1.90/watt and the PBI was $0.26/kWh.
Solar Water Heating Systems Rebates
Compared to solar PV panels, solar water heating systems can offer a shorter payback period. These energy systems are typically less expensive and offer more consistent energy savings. California Solar Initiative promotes residential solar water heating systems based on the amount of natural gas or electricity conserved by the system. Residential customers of SMUD who install solar water heating systems may be eligible for a rebate of $1,500. Keep in mind, systems are required to meet a number of specifications.
Solar Panel (PV) Rebates for New Homes
The New Solar Homes Partnership (NSHP) (Administered by the California Energy Commission) offers a per/watt rebate for solar panels incorporated into new homes. An expected performance incentive of $2.50/watt for panels installed on custom homes or developments with less than six homes. A "solar as standard feature" incentive of $2.60/watt is available to developers who install panels on at least 50% of the residential units in a development that has over six homes.
Net-Metering Rules in California
Since 1996, California's net-metering law has required all utilities (excluding LADWP) to provide net metering to all commercial and residential customers. Contact your local utility company for more information.
Miscellaneous CA Solar Tax Incentives
CA guarantees buyers receive rebates or compensation from production-based incentives. A 100% solar energy tax exemption ensures solar PV panels or a solar water heating system won't increase the property tax or liability of homeowners and businesses.
Solar Rebate Programs Sponsored by Utilities
Nearly 30 California other utility companies offer rebates for solar and other sources of renewable energy. The requirements and fine print for each program vary, but the rebate rate is between $2.00 and $3.50 per watt of AC power, depending on system size and sector. Residential on-grid systems are eligible for a payment of $1.90 per installed watt (received upfront). As of March 2010, residential systems receive $0.12 per expected kWh of generation.