Leigh Weiser is a solar sales consultant based in Reseda, California. With over a decade of experience in the industry, Leigh Weiser’s knowledge of renewable energy systems have made her a trusted resource for those seeking to transition to clean energy. In this article, she shares her insights on how the Federal Solar Tax Credit (ITC) and state-level rebates in California are making the transition to clean, cost-effective energy more accessible for homeowners and businesses alike.
As solar energy continues to gain popularity, homeowners and businesses across California are looking for ways to reduce the upfront cost of installations. The combination of federal and state incentives play a crucial role in making this happen. Among these, the Federal Solar Investment Tax Credit and California’s state rebates and incentive programs work together to drive down costs and accelerate the widespread adoption of renewable energy.
Leigh Weiser Sheds Light on the Benefits of the Federal Solar Tax Credit
Leigh Weiser notes that the Federal Investment Tax Credit is one of the most important incentives available for solar energy projects. First established in 2005 under the Energy Policy Act, the ITC has undergone multiple extensions and modifications to continue encouraging solar adoption.
How the ITC Works
The program allows homeowners and businesses to claim a tax credit equal to 30% of the total cost of their complete system, including installation, permitting, and equipment expenses. This means that if total installation costs $20,000, the homeowner can receive a $6,000 credit on their federal taxes.
Key Benefits
- 30% tax credit for solar systems installed between 2022 and 2032 (set to reduce to 26% in 2033 and 22% in 2034).
- Applies to residential and commercial solar installations.
- No cap on the credit amount—homeowners can claim 30% of the full cost regardless of system size.
- Reduces federal income tax liability, making solar more affordable upfront.
Leigh Weiser notes that to qualify for the tax credit, homeowners and businesses must meet specific criteria. First, they must install a new solar photovoltaic (PV) system, as previously installed or outdated systems do not qualify. Additionally, they must own the system outright – leased solar systems are not eligible for the credit. The energy generated must be used for a primary or secondary residence within the United States. Finally, since the ITC is non-refundable, applicants must have sufficient federal tax liability to take full advantage of the credit, as it only offsets owed taxes rather than providing a direct refund.
How California State Incentives Complement the Tax Credit
While the ITC significantly reduces solar installation costs at the federal level, California also offers state-level rebates and incentives that further lower expenses and improve the return on investment.
California’s Self-Generation Incentive Program (SGIP) – Battery Storage Rebates
One of California’s most valuable incentives is the SGIP, which provides rebates for battery storage systems that homeowners can pair with their solar panels. Leigh Weiser adds that given the state’s push for energy resilience and grid reliability, this program is a game-changer for those looking to install solar plus storage systems.
Rebate amounts vary depending on system size and income eligibility, but for lower-income households, they can cover up to 90% of battery costs – making energy storage more accessible than ever.
This empowers homeowners to store excess solar energy, ensuring reliable backup power during outages, peak demand hours, or high utility rates. Even better, battery storage qualifies for the 30% Federal Investment Tax Credit when primarily charged by solar, allowing homeowners to stack savings and maximize their energy independence.
Net Energy Metering (NEM) – Maximizing Solar Savings
California’s Net Energy Metering 3.0 program allows solar owners to sell excess electricity back to the grid, effectively lowering their energy bills. However, with the introduction of NEM 3.0, compensation rates for excess solar power have changed, making it more important than ever to pair solar with battery storage to optimize savings.
By storing excess energy, homeowners can use their own solar power during peak hours instead of drawing electricity from the grid at higher rates. Additionally, the ITC significantly reduces the upfront cost of installing both panel and battery sstems, allowing homeowners to maximize the financial benefits of NEM while also increasing their energy independence.
California Property Tax Exclusion for Solar Energy Systems
Originally set to expire on January 1, 2025, California’s property tax exclusion for solar energy systems has been extended through additional legislation passed in 2022. The update moved the repeal date to January 1, 2027, allowing homeowners and businesses to benefit from the exclusion for active solar systems through the 2025-26 fiscal year. Leigh Weiser highlights that this program works in conjunction with the ITC by increasing home value at no additional tax burden, encouraging long-term investments in solar energy.
Local Utility Rebates and Incentives
Many California utilities offer additional rebates and incentives for solar and battery installations. For example:
LADWP’s Solar Incentive Program – Rebates based on system size and energy output.
SMUD’s Residential Battery Rebate – Incentives for homeowners installing battery storage.
These programs help offset upfront costs and work alongside the ITC to make solar financially viable for more homeowners.
Working Together
By stacking all eligible savings opportunities, California homeowners can significantly reduce out-of-pocket costs for solar installations. Leigh Weiser provides an example scenario below of how the ITC and state incentives complement each other below:
Example Scenario – Residential Solar Installation in California
| Total solar system cost: | $25,000 |
| Federal ITC (30% of total cost): | -$7,500 |
| SGIP Battery Rebate: | -$3,500 |
| Local Utility Rebate: | -$1,500 |
| Net Cost After Incentives: | $12,500 |
In this scenario, the homeowner effectively cuts their upfront solar costs in half by utilizing federal and state initiatives. Additionally, by participating in NEM 3.0, they can continue to save money on electricity bills, making their investment even more worthwhile in the long run.
Future of Solar Incentives in California
Leigh Weiser of Reseda says that while the ITC is set to step down after 2032, the state of California is expected to continue offering new programs to encourage solar and battery adoption. Some trends to watch:
- Potential expansion of SGIP and battery rebates to support grid reliability.
- Enhanced incentives for low-income households to improve energy equity.
- New policies supporting community solar programs for renters and multi-family properties.
Making the Most of Solar Incentives
The Federal Solar Tax Credit and state rebates in California create a powerful financial opportunity for homeowners and businesses looking to switch to solar energy. By combining these advantages, solar customers can significantly reduce their initial investment, lower their electricity bills, and contribute to a cleaner energy future.
For those considering going green, Leigh Weiser reports that now is the best time to take advantage of these opportunities before policies shift. Working with a knowledgeable solar provider can help ensure that you maximize available rebates, take full advantage of tax credits, and make the most of your solar investment.
