In January 2007, the state of California implemented the California Solar Initiative. It authorizes the California Public Utilities Commission to oversee a $2.5 billion rebate program for existing residential customers. The money is collected from the utilities.
The rebate provided to customers of Southern California Edison (SCE), Pacific Gas & Electric (PG&E), San Diego Gas & Electric Company (SDG&E), is $2.50 per delivered watt, or more than 25% of the total system cost. This rebate will decline by $0.30 each time certain benchmarks are reached with the first decline likely in the third quarter of 2007 bringing the rebate down to $2.20/watt. All local municipal utilities are also mandated to set up a similar rebate program by the beginning of 2008.
In addition to this generous rebate, there is a further Federal tax credit of $2000 for your renewable energy system (solar or wind) after rebates. This comes directly off of the amount of income tax that you owe.
For businesses, there is also a 30% Federal Investment Tax Credit that can be carried forward 15 years or back three tax years. The “MACRS” five-year accelerated depreciation schedule is also applicable. For businesses, we have often seen paybacks as low as three years and internal rates of return in excess of 25%.
The Bottom Line
Since laws vary by state and change very quickly, feel free to contact us with any questions we can answer. We are here to help you sort through the mess!
Contact a California Solar Specialist to ask about rebates - Click here
Contact a California Solar Specialist to ask about rebates - Click here