California Solar Panel & Battery Tax Credits, Rebates & Incentives in 2025
Solar panels have many benefits for California homeowners. They save you money on your electric bills and, when paired with battery storage, protect you against power outages—two things that are becoming increasingly important as electricity rates skyrocket and extreme weather incites more and more power outages.
The only real downside to solar is the upfront cost. But incentives like the federal solar tax credit and SGIP rebates are making home solar more affordable in California.
If you want to save on solar panels for your home, keep reading. We’ve rounded up the best California solar incentives for 2025.
Solar Tax Credit
The solar tax credit is a federal incentive available to all US taxpayers who install solar panels and/or batteries on their homes. Although it’s not California-specific, it’s one of the best solar incentives available to California residents in 2025. The tax credit has been around for years but was expanded by the Inflation Reduction Act in 2022. With a new administration taking over, there’s some uncertainty about what will happen to the solar tax credit in 2025. Our advice? If you’re thinking about going solar, act sooner than later to make sure you don’t miss out on this incentive.
How the Solar Tax Credit Works in 2025
The solar tax credit reduces your federal income tax liability by 30% of your solar installation costs. Almost all expenses related to a home solar installation are eligible for the tax credit, including solar PV panels, solar battery storage systems, mounting and wiring equipment, installation labor costs, and permitting fees. To claim the solar tax credit on your 2025 tax return, your solar energy system must be up and running by the last day of the year.
Solar Battery Tax Credit
Solar batteries are eligible for the solar tax credit in 2025 if they have a capacity rating of 3 kilowatt-hours (kWh) or greater. Most home batteries, including the Tesla Powerwall 3, FranklinWH battery, and many Enphase batteries meet this requirement. You can claim the 30% solar battery tax credit for:
Batteries installed with a solar panel system
Battery additions to an existing solar panel system
Standalone solar batteries
Solar Property Tax Exclusions in California
Installing solar panels can increase your home’s value but it won’t increase your property taxes. The California Active Solar Energy System Exclusion excludes solar panel systems from property tax assessments, so installing a home solar system won’t affect your property taxes. The California solar property tax exclusion was recently extended and will sunset on January 1, 2027.
Self-Generation Incentive Program (SGIP)
Customers of PG&E are eligible for solar battery rebates through the California Public Utility Commission’s Self-Generation Incentive Program.
Market Rate SGIP Rebates
The Market Rate SGIP solar battery rebates are available to all residential customers of PG&E. They’re calculated based on system size, so the more storage you install, the higher your rebate will be. You can use the SGIP’s Program Metrics Dashboard to check current incentive rates.
SGIP Residential Solar and Storage Equity (RSSE) Program
If you meet income requirements, you may be eligible for higher rebate amounts! The SGIP RSSE Program offers enhanced rebates for solar battery storage and rebates for solar plus battery storage systems. It covers 100% of the cost to install a new battery backup system and between 60%-80% of the cost to install a new solar plus battery backup system for qualifying homeowners. If you own a rental property and the electric bill is in your tenant’s name, your rental property could qualify for funding if your tenant meets the program’s requirements.
Net Metering in California (2025 Updates)
Net Energy Metering (NEM) is a solar incentive program that allows solar customers to sell the excess power they generate to their utility company in exchange for credits on their electric bills. For many years, California had one of the best net metering policies in the country. But, if you’ve been following California solar industry news over the past few years, you know that’s changed.
In 2023 California's NEM 2.0 was replaced by the Net Billing Tariff (NBT). This new net metering policy significantly reduced the rate at which solar customers are compensated for the electricity they send to the grid. There are many downsides to NBT, but there’s also one big upside—it makes solar plus storage systems more valuable than solar-only systems. With solar plus battery storage, you can hold onto your excess electricity and send it to the grid when buyback rates are highest. Or, you can use it yourself in the evenings, when electricity rates go up and there’s no sunlight to generate power.
Have Questions? Where Here to Help
Incentives make solar panels more affordable for your home, but navigating the various tax credits, rebates, and incentives can be a challenge. Taylor Energy can help you learn more about California’s solar power incentives for 2025 and the savings you qualify for. We are a highly experienced, locally owned solar company in Sonoma County that offers full-service solar installations. Our expert team is here to walk you through the incentive landscape, talk to you about your options, and help you decide whether solar power is worth it for your home in Sonoma County,
Save with California solar panel incentives in 2025! Call (707) 785-8497 to schedule a free, no-obligation consultation.
Residential Solar
Get a free estimate for residential solar panel installation in Santa Rosa, Petaluma, Sebastopol, and surrounding areas. We are a Tesla Powerwall Certified Installer!
Rebates & Incentives
Save on your solar panel and solar battery installation with California solar incentives. Schedule a free solar consultation with Taylor Energy to learn more about the incentives you’re eligible for.
Commercial Solar
Cut operating costs and increase profit margins with commercial solar panels. Schedule your free commercial solar consultation with Taylor Energy today. We can help you find a solar solution that works for your business.
