The solar investment tax credit (ITC) is a dollar-for-dollar reduction in the income taxes that a homeowner claiming the credit would otherwise pay the federal government. The ITC is 30% of the cost to purchase and install a solar systems between 2022 to 2032. For those leasing a system, tax credits are not offered.

California offers many state and local incentives for going solar. One of the most popular and now most controversial is Net Metering (NEM). NEM offers homeowners the ability to earn credits for any excess solar electricity sent to the grid when the solar panel system generates more than needed.

However, be aware, that after years of back and forth, the California Public Utilities Commission (CPUC) voted unanimously on December 15, 2022, to approve California’s third iteration of net metering, or NEM 3.0. This will significantly reduce net metering compensation rates for new California solar customers (by about 75 percent). However, you still have through April 13, 2023, to submit a completed interconnection application and lock in NEM 2.0 rates for 20 years.

A solar power installation has been shown to increase the value of your home. In California, solar panels are eligible for a Solar Energy System Property Tax Exclusion . This simply means that, if your solar panel system increases the value of your home, you may be exempt from paying taxes on that increased value.