2022 Solar Incentives Guide for San Diego, CA - Tax Credits & Rebates

In this guide, we'll cover the latest solar incentives and rebates available in San Diego. You'll learn about:
  • Local & State Solar Incentives
  • Federal Tax Credits (Updated for 2022 and beyond)
  • Ways to optimize your solar investment

Solar installers are experts in maximizing your solar tax credits and rebates.
Get a free quote from one of our trusted San Diego solar installers to see how much you can save.

EcoWatch Local Advisors

By EcoWatch Local Advisors

Updated 11/09/2022

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What Solar Tax Credits, Incentives, and Rebates are Available in San Diego?

Property Tax Exclusion for Solar Energy Systems and Solar Plus Storage System

Incentive Type:
Property Tax Incentive
100% of system value; 75% of system value exemption for dual-use equipment

Western Riverside Council of Governments - Home Energy Renovation Opportunity (HERO) Financing Program

Incentive Type:
PACE Financing
Eligible products can be financed for up to 25 years, depending on the useful life of the eligible product.
Minimum financing: $5,000
The financing may not exceed fifteen percent (15%) of the market value of the property, up to the first seven hundred thousand dollars ($700,000) of the property’s market value, and ten percent (10%) of the remaining value of the Property above seven hundred thousand dollars ($700,000) minus any PACE assessment on the property The total amount of any annual property taxes and assessments shall not exceed five percent (5%) of the property's fair market value, determined at the time program financing is approved.

Local Option - Municipal Energy Districts

Incentive Type:
PACE Financing
Locally determined

Self-Generation Incentive Program

Incentive Type:
Rebate Program
For projects 30 kW or larger, 50% of incentive will be received up-front; 50% will be received based on actual kWh production over the first 5 years. For projects under 30kW, 100% of the incentive will be paid up front.
Incentives will step down over time. See below for incentive amounts.

Renewable Market Adjusting Tariff (ReMAT)

Incentive Type:
Feed-in Tariff

LADWP - Feed-in Tariff (FiT) Program

Incentive Type:
Feed-in Tariff
$0.17/kWh adjusted by a time of delivery multiplier
Base price will step down over time as certain MW goals are met

California Solar Initiative - Solar Thermal Program

Incentive Type:
Rebate Program
Step 1 Incentive Rates (contact utility to determine current incentive levels):
Single Family Residential Incentives:
Systems that displace natural gas: $29.85 per estimated therm displaced
Systems that displace electricity or propane: Funding has been exhausted
Commercial/Multifamily Incentives:
Systems that displace natural gas: $20.19 per estimated therm displaced
Systems that displace electricity or propane: $0.42 per estimated kWh displaced *** Note, funding has been exhausted in this category for SCE and PG&E
Solar Pool heating: $5.00 per estimated therm displaced

City of San Diego - Sustainable Building Expedited Permit Program

Incentive Type:
Green Building Incentive

San Diego County - Green Building Program

Incentive Type:
Green Building Incentive
7.5% reduction in plan check and building permit fees

Federal Residential Renewable Energy Tax Credit

Incentive Type:
Personal Tax Credit
30% federal tax credit for systems placed in service after 12/31/2021 and before 01/01/2033. Good for: solar water heat, solar photovoltaics, biomass, geothermal heat pumps, wind (small), fuel cells using renewable fuels.

Source: https://www.dsireusa.org/


The phrase "solar incentives" includes a range of financial incentives implemented to make installing and using solar panels more affordable. This is done to encourage people to switch to renewable energy. Incentives could include things like discounts, cash back or credit towards your monthly utility bill. Some incentives are handled federally, while others are provided by the California government or your specific utility company, county or municipality. You might qualify for any of the following types of solar incentives:

  • Tax Credits: Tax credits are dollar-for-dollar reductions (not deductions) in how much in taxes you owe the federal government.
  • Tax Exemptions: Sales tax exemptions go into effect at the time of purchase for your solar panels. Property tax exemptions let you exclude the value added by your solar system when you're calculating the amount of property tax you need to pay.
  • Solar Renewable Energy Certificate (SREC): SRECs and other performance-based incentives might be available to you if you have a solar system that produces over a specified (usually small) amount of electricity. These types of incentives are generally handled at the state level. You can sell any SRECs you have to your utility company or other buyers, and the money you make is typically considered part of your taxable income.
  • Net Metering: Net metering is an incentive you can get after your solar system is up and running. If you have in place a net metering agreement with your San Diego utility company, it will subtract the value of the excess energy produced by your solar system from your monthly utility bill. In some locations, this is a dollar-for-dollar credit, while in other areas you might get refunded a percentage of the value.
  • Rebates: Solar rebates may be offered by your county or state, or by your local utility company. These rebates are essentially cash back that is applied after you purchase a solar system and before tax credits are calculated.

Federal Solar Incentives

Federal solar incentives are likely to be the first thing that comes to mind when you think about solar incentives. The solar incentive that you're most familiar with is probably the Federal Solar Investment Tax Credit (ITC), which provides a credit on your taxes equal to a certain percentage of the cost of your solar system.

The ITC applies to the value of a solar system installed on your primary or secondary residence in the United States. The solar panels have to have been installed on a property you own after January 1, 2006 for you to be eligible for the credit. Initially, the ITC applied to 30% of all system installation costs (panels, equipment, labor and accessories), although this amount has fluctuated slightly over the last few years between 26-30%. The amount you qualify for will depend on when your solar system was installed. There is no cap on the amount you can claim.

To better understand exactly how much the ITC could save you, get in touch with your local San Diego solar panel installer.

In August 2022, the Inflation Reduction Act made revisions to the ITC, now dubbed the Clean Energy Credit. The new Clean Energy Credit is valid until 2035. Homeowners are now eligible for a 30% credit for solar systems that began installation on or after January 1, 2022 and will be done by December 31, 2032. The total credit will then see a slight annual decrease until its expiration. The expansion also makes it easier to get credit for energy storage systems, starting in 2023.

More information about the new Inflation Reduction Act can be found here. Your local San Diego solar panel installation experts can answer any questions you have and explain how the new Clean Energy Credit applies to you.

State & Local Solar Incentives

Some solar incentives are often also provided at the state and local level. As with federal incentives, these might include tax credits, rebates and more. Some incentives are offered for only a limited time, while others are ongoing. Your local solar incentives could come from your county or municipality, or from the California government.

Next Steps for Installing Solar in San Diego

You can receive solar incentives from the California government and the federal government, as well as from your local utility company. This increase in availability of solar initiatives in the past 15 years has helped increase solar adoption nationwide. Reaching out to your local San Diego solar panel installer is a great first step towards getting all the incentives you qualify for when you switch to solar energy.

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EcoWatch's San Diego, CA Solar Incentives FAQs

What if I want to add a solar system to a vacation home, rental property or commercial property? Will I still qualify for incentives?

While we recommend speaking with your local solar installer and/or tax professional to best understand what solar incentives apply to you, many incentives can be claimed on a second home, so long as that home is in the United States and owned by you. There may be additional incentives available specifically for commercial properties, depending on the details.

How can I find out if I qualify for different solar incentives?

It's a smart idea to get in touch with your local San Diego solar installer for a better understanding of which incentives your project may qualify for. Typically, solar incentives apply to new solar systems installed on a property you own (in the U.S.) between the dates specified by the incentive. Some incentives, like those provided at the level of the California government, might have additional requirements.

Who installs solar panel systems near me?

To learn about the top solar panel installers near you, take a look at our article on San Diego's top solar panel companies.

What are some of the environmental benefits of switching to solar energy?

Solar energy is renewable — by switching where you get your energy, you can help reduce the strain on our planet's resources. You can also lower your home's CO2 emissions by 250 pounds a year, or roughly 5,000 pounds over 20 years.

When does the federal solar tax credit end?

The federal solar tax credit, formerly known as the ITC and now called the Clean Energy Credit, is scheduled to end January 1, 2035. The current 30% credit will end in 2032, replaced by a 26% credit in 2033 and a 22% credit in 2034.

Our goal is to reach as many people as we can with sensible solutions like solar energy. Our team of full-time local researchers collects solar price and installation data for every city in America then compiles it to create these digestible city guides. If you want to read our solar expert's opinion on the top solar companies featured here, follow this link.

Solar incentive research was conducted by Melissa Smith and Karsten Neumeister. Local data analysis was conducted by James Savino. See something we missed or could do better? Email the editor.

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