What Rebates, Tax Credits, and Incentives Are Available for Solar Energy Systems?
Last updated in April 2016
Below are the tax credits and other incentives we could identify at the time of publication. Check www.dsireusa.org for an up-to-date list. Note that if you lease rather than buy a system, incentives usually go to the leasing company, not you.
Federal tax credit: Uncle Sam will let you deduct 30 percent of what you paid for panels, equipment, installation, and permits from your tax bill. The current credit is in place through 2019; in 2020, the credit declines to 26 percent; then 22 percent in 2021; from 2022 on, it stabilizes at 10 percent. For more details on how to compute the credit, see the IRS's Q&A on Tax Credits for Sections 25C and 25D.
Net metering: When your solar energy system produces electricity you don’t use, it’s pushed onto the grid; if you end up using less electricity than your system created during the year, your utility will send you a check for the difference, with the amount calculated at the rate you would have paid.
Rebates: PG&E no longer offers a rebate. But the San Francisco Public Utilities Commission offers rebates on residential solar systems of between $500 and $2,800, depending on the size of the system, and even greater amounts if you use an installer based in the city. Qualified low-income homeowners in San Francisco can earn additional rebates of between $2,000 and $7,000 for installing solar systems. Silicon Valley Power, which serves the city of Santa Clara, also provides rebates of up to 30 percent of the installed cost to eligible applicants.
Property tax exemption: Any increase in your home’s value as a result of installing solar panels is exempt from property taxes.