A Complete Guide to California’s Solar Incentives, Rebates & Financing (2025)

INTRO

With rising electricity costs and a push toward renewable energy, 2025 is the perfect time to go solar in California. Thanks to generous solar financing and incentives, homeowners can save thousands on solar panel installation while reducing their carbon footprint. Federal and state programs make solar more affordable than ever, allowing residents to take advantage of rebates, tax credits, and financing options.

In this guide, I’ll cover everything I need to know about California’s solar incentives, rebates, and financing options in 2025, including how to qualify and maximize my savings.

Why Go Solar in California in 2025?

Switching to solar energy isn’t just good for the environment—it’s also a smart financial move. Here’s why:

• High electricity costs – California has some of the highest utility rates in the U.S.
• State and federal incentives – Homeowners can save thousands with tax credits and rebates.
• Long-term savings – Solar panels can reduce energy bills by 50% to 70%.   
• Go Solar With Solar Panels NovaMax

Understanding Solar Financing and Incentives

Solar financing and incentives help lower the upfront cost of installation, making solar energy more accessible. The most common options include:

• Tax credits – Reduce the amount of federal and state taxes owed.
• Rebates – Direct cash incentives for installing solar panels or batteries.
• Net metering – Earn credits for sending excess energy back to the grid.
• Low-interest solar loans – Spread out the cost of installation over time.

Federal Solar Incentives Available in California

What is the Federal Solar Tax Credit (ITC)?

The Solar Investment Tax Credit (ITC) is a federal program that allows homeowners to deduct 30% of their total solar installation cost from their federal taxes.

Key Benefits:

• Available for residential and commercial properties.
• No cap on the credit amount.
• Homeowners must own their solar system (leased systems don’t qualify).

Example: If I install a $20,000 solar system, I can claim a $6,000 tax credit on my federal return.

California State Solar Incentives and Rebates

California offers additional incentives on top of federal credits to make solar installation more affordable.

California Solar Tax Credits and Rebates

While California does not currently offer a statewide solar tax credit, homeowners can take advantage of:

• Local utility rebates – Some utility companies offer cash incentives for installing solar.
• City and county incentives – Programs vary by location.

Net Metering in California (NEM 3.0)

Net Energy Metering (NEM 3.0) allows homeowners to sell excess solar power back to the grid for credits on their electricity bills. However, recent policy changes have adjusted the credit value, making energy storage (batteries) more valuable.

How NEM 3.0 Benefits Homeowners:

• Helps offset electricity costs.
• Encourages battery storage for energy independence.

Self-Generation Incentive Program (SGIP)

The Self-Generation Incentive Program (SGIP) provides rebates for installing solar batteries. This is ideal for homeowners who want to store excess energy for use at night or during outages.

SGIP Benefits:

• Reduces the cost of solar battery storage.
• Helps homeowners achieve energy independence.
• Can be combined with other incentives.

Solar Financing Options in California

Even with incentives, solar panel installation is a major investment. Thankfully, there are financing options to make it more affordable.

Solar Loans

Homeowners can finance solar installation through low-interest solar loans with flexible repayment terms.

Types of Solar Loans:

• Secured solar loans – Backed by collateral (home equity).
• Unsecured solar loans – No collateral required, slightly higher interest rates.

Solar Leasing vs. Power Purchase Agreements (PPAs)

For homeowners who don’t want to buy solar panels upfront, leasing or Power Purchase Agreements (PPAs) provide another option.

How to Apply for Solar Incentives and Financing in California > Contact:  Solar Panels NovaMax

Applying for solar financing and incentives is easy, and most solar companies handle the paperwork.

Step-by-Step Guide:

1. Get quotes from multiple solar providers – Compare pricing and financing options.
2. Check eligibility for federal and state incentives – Ensure I qualify for rebates and tax credits.
3. Apply for financing if needed – Choose between loans, leasing, or PPAs.
4. Install my solar system – Work with a professional installer.
5. Claim my incentives – Apply for tax credits and net metering benefits.

Common Myths About Solar Incentives

There are many misconceptions about solar financing and incentives. Let’s debunk a few:

Myth #1: “Solar is too expensive, even with incentives.”

Fact: With tax credits, rebates, and financing options, solar has never been more affordable.

Myth #2: “Net metering no longer benefits homeowners.”

Fact: While NEM 3.0 has changed, it still allows for significant energy savings.

Myth #3: “I have to pay for solar panels upfront.”

Fact: Many financing options allow homeowners to install solar with zero upfront costs.

DIY vs. Professional Solar Installation in California

While DIY solar installation is possible, hiring a professional ensures:

• Proper system setup for maximum efficiency.
• Eligibility for tax credits and rebates.
• Compliance with California building codes and regulations.

Testimonials

1. “I got a 30% tax credit and reduced my energy bill by 70% after installing solar!” — Jason M., Los Angeles, CA
2. “The SGIP program helped me add a battery backup, making my home energy-independent.” — Linda R., San Diego, CA
3. “Thanks to  Solar Panels NovaMax  and a low-interest solar loan, I could afford solar with zero upfront costs.” — Mark T., San Jose, CA

FAQs