Recently, there has been a flurry of ads on Facebook and other social media sites touting offers for “free electricity.” Usually, these ads claim that PG&E, the local county, California, or the federal government will cover the cost of installing a solar power system. In other instances, a clickbait-style ad teases the potential for getting FREE or NO-COST solar panels, thanks to some extremely generous yet unnamed benefactor.
Unfortunately, without exception, these ads are either deceptive or outright lies.
First, let’s look at what solar power incentives are being offered by utilities and local/state/federal government.
The most significant, real incentive for purchasing a solar power system is the Solar Investment Tax Credit, or ITC. Available through 2021, you are credited up to 30% of the total cost of a solar power system for your home or business. However, it certainly doesn’t cover the full cost of a solar power system purchase and installation. In addition, the program is being phased out, with the benefit amount dropping in 2020, and ceasing entirely after 2021.
This is currently the only federal incentive for installing a solar power system.
State of California
Currently, the state of California does not offer any incentives for installing solar power. In fact, if you visit the State of California’s “Go Solar California” website, you’ll find that the page on “Tax Credits for Solar System Purchase” discusses the federal government’s ITC.
Low-income homeowners may qualify for the “Single-family Affordable Solar Homes Program” (SASH), a statewide program managed by the nonprofit organization GRID Alternatives. Capital City Solar has been a contractor partner of Grid Alternatives for more than 10 years. If you contact Capital City Solar about a solar power system and we believe you might qualify, we’ll happily refer you. If you wish to apply to Grid Alternatives on your own, fill out the application form here.
Sacramento County does not offer incentives for installing a solar power system, though the county’s website does have a page discussing PACE, a program for financing the cost of solar power upgrades. But as we discussed previously in our post on solar power financing options, this is nothing more than a loan.
City of Sacramento
There are no incentives offered by the Sacramento city government.
Pacific Gas & Electric does offer some clean energy incentives. However, they currently don’t offer rebates for installing a solar power system on your own home. As noted on California’s Go Solar California site, none of the state’s major utilities currently offer solar incentivization programs.
SMUD currently offers a $300 solar incentive for residential installations.
If a solar power company is saying you can get solar power for free with no money down, they are probably talking about a financing or lease program.
There are a lot of creative financial solutions out there to help homeowners cover the not-insignificant cost of getting solar power. However, none of these options are free.
We won’t get into too much detail here—you can learn more in our blog post on solar power financing options—but “no money up front” options generally fall into one of the following categories:
- PACE: Several states, including California, have privately funded PACE programs that allow homeowners to finance the purchase of a solar power system. Repayment of the loan us usually rolled into property tax payments for a period of 20 years, with your home being used to secure the loan.
- Leasing: This is pretty much like leasing a car. A solar power company installs and owns the system. This means that you get the benefit of energy savings, but you never own the system, even when the lease expires (at the end of the lease period, the system is removed unless you agree to purchase it). In addition, the solar power company that owns it gets the solar tax credit, not you.
- PPA: Under a power purchase agreement (PPA), a solar power company installs and owns the system. Similar to how your utility company charges you for electricity, the solar company charges you for the electricity produced by the system. Again, you never own the system, and do not qualify for the solar ITC.
The fact of the matter is that there are very few solar power incentives on offer, and they are diminishing by the day. Such incentives used to be quite common 10 to 15 years ago, when solar power systems were much more expensive, and the adoption rate was quite low. But these days, utility companies are getting nervous about the large number of homeowners installing solar power systems.
In April 2019, SMUD angered Sacramento customers by proposing a monthly “grid access charge” on solar power users, costing about $500 to $600 per year. While the public outcry was enough to convince SMUD to withdraw the proposal, it was a pretty good indication of how public utilities currently feel about solar power.
The days of local governments, state governments, and utilities offering solar incentives are over. Don’t wait for someone to offer you a free solar power system. There’s no such thing. The federal solar tax credit is the best deal that you’re going to get, and if you want to take advantage of that, don’t wait. Act now.