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

In this guide, we'll cover the latest solar incentives and rebates available in San Francisco. 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 Francisco solar installers to see how much you can save.

EcoWatch Local Advisors

By EcoWatch Local Advisors

Updated December 8, 2022

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

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

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/


Solar incentives are intended to make renewable energy usage more affordable through financial incentives for those who install solar panels on their homes. Incentives might include things like discounts, cash back or credit towards your monthly utility bill. Some incentives are handled federally, while others are offered by the California government or your specific utility company, county or municipality. Categories of solar incentives include:

  • Tax Credits: Tax credits reduce, dollar-for-dollar, the total amount of tax you owe the federal government. Tax credits are different from tax deductions.
  • Tax Exemptions: Your solar panel system could qualify for both sales tax and property tax exemptions. Sales tax exemptions are effective at the time of purchase. Property tax exemptions let you ignore the value that solar panels add when you are calculating property taxes on your home.
  • Rebates: A solar rebate is a partial refund given after you've purchased your solar system. Rebates might be offered by your local utility company, your state or your county. The rebates are usually applied before calculating tax credits.
  • Net Metering: Net metering factors in after your solar system is up and running. If you've signed a net metering agreement with your San Francisco utility company, the company will subtract the value of the excess energy produced by your solar system from your monthly utility bill. In some places, this is a dollar-for-dollar credit, while in other places you might receive a refund equivalent to a percentage of the value.
  • Solar Renewable Energy Certificate (SREC): SRECs and similar performance-based incentives are generally handled at the state level. Once your solar panel system meets the qualification threshold (normally a small amount of energy production), you can receive SRECs that you can then sell to your utility company or other buyers. The money you receive from the sale is usually considered part of your taxable income.

Federal Solar Incentives

Federal incentives are the kind of incentives that you are most likely to have heard of. 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 predetermined percentage of your solar system's cost.

The ITC applies to the total cost of solar system installation, including the panels themselves as well as labor, accessories and equipment. This credit can be claimed for panels installed after January 1, 2006 on a primary or secondary residence that you own and that is located in the United States. The tax credit ranges from 26-30% of total costs depending on when your project was completed. There is no maximum amount you can claim.

To understand exactly how much money the ITC could save you, speak with your local San Francisco solar panel installation expert.

The Inflation Reduction Act, passed in August 2022, made some changes to the ITC (as well as renaming it to the Clean Energy Credit). The Clean Energy Credit is valid until 2035. Solar installation projects started after January 1, 2022 and completed by the end of 2032 may qualify for a 30% tax credit; this amount will decrease slightly each year until the end of the current program. Beginning in 2023, it will also be easier to get credits for energy storage systems under the new laws.

Click here to learn more about the new Inflation Reduction Act. Your local San Francisco solar panel installation experts can answer any questions you have and explain how the new Clean Energy Credit will apply to you.

State & Local Solar Incentives

In addition to federal solar incentives, there are often also state ones. Tax credits, rebates and more may be available at a more local level. These solar incentives — which may be given by the state of California, or by your county or municipality — may be offered on an ongoing basis, or for only a limited time.

Next Steps for Installing Solar in San Francisco

The expanding number of solar incentives available has helped tremendously increase the use of solar power nationwide over the last 15 years. You may receive solar incentives from your local utility company, the California government or the federal government. Reach out to your local solar panel installation company today to learn more and to save the most money possible on solar panels for your San Francisco home.

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EcoWatch's San Francisco, CA Solar Incentives FAQs

How do I know if I qualify for solar incentives?

It's a smart idea to get in touch with your local San Francisco solar installer for a better understanding of which incentives your project will qualify for. Usually, solar incentives apply to new solar systems installed on property you own (in the U.S.) within a specified date range. Some incentives, like those provided by the California government, may have additional requirements.

How much can I save on my electric bill annually if I add solar panels to my house in San Francisco?

When you add solar panels to your home in San Francisco, you can anticipate savings of around $1,612.65 per year, or around $30,640.37 over the next 20 years.

What are some environmental benefits of adding solar panels to my home?

You can reduce your carbon footprint by 250 pounds of CO2 a year by switching to solar panels. This adds up to around 5,000 pounds over 20 years. Solar is also a renewable energy source, meaning that switching your home over lessens the drain on our planet's resources.

I want to trade in my old appliances for ones that are more energy-efficient. Are there any credits I can get?

The recently passed Inflation Reduction Act includes provisions for multiple incentives that reward homeowners who make eco-friendly upgrades. Some incentives include tax credits and rebates for installing new electric appliances. You can find more details about these incentives here.

Can I claim incentives both towards the initial cost of solar panels, and later as reimbursement?

Yes, you can claim both tax credits and rebates towards the cost of solar panels. Depending on precisely which incentives you are applying for, they may apply in a different order. Be sure to talk to your solar installer or a local tax professional to ensure that you are claiming incentives correctly and getting the most money you can.

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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