Government Subsidies

There are two forms of government subsidies: direct rebates based on the size of the system you install and tax rebates based on the price you paid.

Direct Consumer Rebates
Depending on where your electricity comes from, you can either get a rebate through the California Solar Initiative, if you live in Southern California Edison, PG&E, or San Diego Gas & Electric territory. If you live in a city with a municipal utility, you can get a rebate directly from your local utility company. 

The value of the rebate is slowly lowering—on pace with the lowering price of the systems themselves. The state’s rebate is supposed to lower around $0.20 every six months, but sometimes they lower it more or less depending on the overall market.

The statewide rebate is currently $2.50/watt. This means that if you installed a 2.5 kilowatt system, you would get a check for $6,250 bringing that $18,000 price tag down to $11,750. 

The rebate process is pretty straightforward, though every program has specifications such as approved list of panels, process for applying for a rebate, etc.  You can find out all the details about the CEC program here: http://www.gosolarcalifornia.ca.gov/. 

Tax Rebates
The second way of getting help from the government to “go solar” is to deduct a percentage of the cost of the system from your state and federal taxes.

The California tax rebate is good only through the end of 2005 (unless the state legislature renews the rebate). It is worth 7.5% of the net cost of the solar system (i.e. post-rebate)—usually around $1,000. In addition to the state rebate, there is a federal rebate that is good through 2007 and is worth 30% of the cost of the system or up to $2,000, which ever is less.