California Solar, Storage, EV Tax Incentives

From rugged coastlines to enchanting redwoods, from picturesque vineyards to dramatic deserts — California has it all. Home to nearly 39 million people, the Golden State is a melting pot of culture, opportunity and natural beauty. But as the amount of carbon dioxide in the air causes our temperatures to warm, California is experiencing strains to its water supply, increasing wildfires, sea-level rise and greater smog in urban areas.*

To slow some of these harmful effects, the state has enacted policies to reduce the amount of carbon dioxide emissions in the air. Billions of dollars* are are being invested to mitigate changes to help our climate, from rebates on electric vehicles (EVs) and charging stations to solar mandates and tax incentives. If you’re ready to save money on your utility bills, lower your dependence on gasoline, and reduce your carbon impact, then California solar rebates and EV charger incentives can help you make those lifestyle changes sooner.

California’s net metering program requires investor-owned utilities to credit solar customers for any excess power their panels produce and feed back to the power grid. The credits appear on homeowners’ utility bills and reduce the total amount they owe for any electricity supplied from the grid.

Net metering credits in California have been historically attractive, despite repeated attempts by utilities to limit them. The California Public Utilities Commission (CPUC) in 2016 voted to uphold retail-rate payments for their surplus solar energy (dubbed NEM 2.0), but required solar customers to move to time-of-use (TOU) rates that implement different rates throughout the day.* This means that, while solar customers will continue receiving full market value for the solar energy they export to the grid, their credit rate will better align with what it costs the power company to generate and transmit energy during periods of high demand and low demand.

Installing solar panels in California may help you reduce your carbon footprint and reduce your electricity bills, but your solar power won’t stay on if the grid goes down unless you have a way to store it. In places like California that are prone to fires, public safety power shutoffs (PSPS), flooding and other severe weather events, solar battery backup is becoming more common - and rightfully so. Adding a battery to your solar system allows you to save the clean energy your panels produce and use that power at night, on rainy days when production is limited, or during a power outage.  

The same ITC that reduces your cost of installing solar by 30% may be available for a storage system you purchase. There is one condition — it must be powered 100% by a solar array.* Remember, the ITC was designed to encourage solar energy adoption. Therefore, if you’re charging your battery by other means, such as electricity from the power grid, your storage system won’t qualify for the federal tax credit. Bottom line: make sure your solar battery is paired with your home solar system and charge it with the energy your solar panels produce to take advantage of the full ITC. 

You may still be able to claim this tax credit if you add a battery to an existing residential solar system at a later date. Be sure to discuss your tax credit eligibility with a licensed tax expert.

California’s Self-Generation Incentive Program (SGIP) offers a rebate for homeowners who install energy storage technology, such as a solar battery, that can operate when the grid goes down. 

In preparation for wildfire season, the CPUC has authorized more than $1 billion through 2024 to fund this program, which includes prioritizing the following:*

• Communities living areas of high fire danger
• Low income and medically vulnerable residents
• Communities that have experienced two or more Public Safety Power Shut-offs (PSPS)

Today’s electric vehicles are not only silent and sustainable, but sleek as well. Models have evolved from pricey first-generation EVs to relatively affordable all-electric SUVs. The advances in technology combined with more options made consumer interest higher than ever. They’re getting farther ranges on a single charge and are being assembled with advanced connectivity features.

In a pledge to reduce greenhouse gases and address our current climate crisis, California has set the goal of selling 5 million EVs by 2030 and phasing out traditional vehicles entirely by 2035. Helping move toward carbon neutrality will help the Golden State reduce the impact of severe fires, extreme weather and rising sea levels. While there are different incentives you can explore for purchasing an actual EV, we’re going to focus on EV charging incentives in California.  

While the national EV charger tax credit ran out at the end of 2021, some utilities have introduced their own rebates and incentives. Utility-sponsored incentives change often, as they receive and run out of funding quickly. As of mid-2022, for example, Sonoma Clean Power is offering customers a Level 2 EV Charging incentive.*

Under the Sonoma Clean Power incentive, those who qualify will pay for half of the cost of an EV charger plus installation costs and a $50 shipping fee and will then be credited for the initial payment of the charging device. This means solar battery customers can receive a free smart electric EV charger minus the shipping and installation fees.*

Make sure to check with your local utility and see what EV charging incentives you may qualify for.

If you’re ready to reduce your carbon impact and reduce your cost of solar in California, state incentives and the federal tax credit can help. Local rebates and incentive programs can also make energy storage and EV charging more appealing and accessible.

But solar credits and utility incentives won’t last forever. If you been considering solar plus storage and/or buying an electric vehicle to help lock in your energy costs — the time to act is now.

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