How To Get Free Solar Panels from the Government in 2023
Did you know there are generous tax incentives for Americans looking to install solar panels on their home? The most common solar tax incentive is called the Investment Tax Credit (ITC). The ITC — also known as the Federal Solar Tax Credit — is a popular tax rebate program offered by the US Federal Government for homeowners looking to switch to clean, renewable solar power.
In August of 2022, the United States Congress extended the ITC while at the same time raising the total amount of the tax rebate from 26% to 30%.
That means if you install a solar energy system in your home at any time in 2023, you can write off up to 30% of the solar installation cost from the amount of taxes you owe to the IRS when filing in 2024.
Although 30% won’t cover the total cost of installing solar panels at your home, the Federal ITC, combined with other potential incentives for your state and local governments, can add up to significant savings.
Let’s find out more about how you can take advantage of government incentives to help pay for your solar power installation and reduce your dependence on the grid.
Can You Get Free Solar Panels from the Federal Government?
The short answer is no. That being said, there are many incentives put in place by the Federal Government to help homeowners transition to solar energy to power their homes.
Here are some of the most popular incentives the Federal Government — in cooperation with state and local governments and public utility companies — have adopted to encourage homeowners to install solar energy systems in their homes.
- The Solar Investment Tax Credit (up to 30%)
- Cash rebates (range from hundreds to thousands of dollars depending on where you live)
- Solar renewable energy certificates (SRECs)
- Performance-based incentives (depending on how much surplus energy you produce, you could earn hundreds or thousands of dollars a year)
- Subsidized solar loans (lower APRs than market rates)
- Property tax exemptions (could save you hundreds or thousands of dollars in property taxes)
Again, some of these incentives depend on where you live, your utility company, and which solar manufacturer or installer you choose. However, by taking advantage of one or several of these incentives along with the Federal ITC, you could have the majority of your solar panels and balance of the system paid for.
Also, keep in mind that once your solar energy system is functional, you can save money on utility bills or eliminate them altogether! After your solar payback period is complete, you can realize a significant return on investment.
If you opt for a grid-tied solar system, you may be able to recover costs by producing surplus energy and selling it back to the power company as well.
Why Did the Government Introduce Solar Incentives Programs?
The largest of the solar incentives programs, the Investment Tax Credit, was initially established under the George W. Bush Administration with the passing of the Energy Policy Act of 2005. The original bill provided a 30% tax credit to homeowners who installed solar panels on their homes. However, at the time, the credit was capped at 5000,000. Also, the legislation was scheduled to expire in 2007.
When President Obama took office in 2008, his administration removed the 5000,000 cap. Since then, the program’s popularity has surged, fueling a quicker transition to renewables and creating more than 250,000 jobs.
The original legislation was intended to help offset the cost of purchasing residential solar to get more homeowners to install solar panels and to help accelerate solar investment and innovation. When it was determined that the original legislation was insufficient to stimulate residential solar growth to help combat climate change and decrease our dependence on fossil fuels, the legislation was beefed up.
Because of the program’s success, Congress has renewed the ITC several times, and the current extension of the ITC is valid through 2034. The Federal Solar Tax Credit is scheduled to decline to 26% from 30% in 2033.
Can You Get Free Solar Panels from Your State Government?
In addition to the Federal ITC, each state has its own solar incentives that you should explore to help cover the costs of your solar installation. Let’s look at California, for example. California has a massive solar energy market, arguably because it’s a progressive state, but also because of how much sun it receives.
Here are some of the most popular incentives that California has implemented to accelerate the use and growth of solar energy.
- Self-generation incentive program: The self-generation incentive program can provide a rebate between 850 and 450,000 per kWH to purchase a battery storage system or a portable power station.
- Solar energy system property tax exclusion: Adding solar power to a home can increase the property value of a home by thousands of dollars. Homeowners who install solar in California can enjoy the increased property value and not be taxed for it.
- Single-family affordable solar housing program: This program offers 3 per watt of solar power installed on single-family homes with households who make 80% or less of the current median income in their area. Must be a customer of Pacific Gas Electric, Southern California Edison, or San Diego Gas Electric.
- Net metering program: Net-energy metering is for residents who have solar and who are connected to the local energy grid. Because of how sunny California can be, depending on where you live, net-energy metering allows homeowners to sell surplus electricity back to energy companies for a profit.
- Utility company rebates: Locally run utility companies in certain cities, like San Francisco and Sacramento, will actually provide rebates to homeowners who install new PV rooftop solar installations.
Again, these incentives are only available to qualified homeowners in the state of California. However, many states have their own incentives as well.
For example, Minnesota waives the state’s 7% sales tax on purchases of solar-related equipment, and Michigan offers subsidized solar loans at lower than the market rates to help homeowners finance their solar projects.
So, if you are looking to install solar energy in your home, make sure you take advantage of your state’s incentives as well as any federal and local incentives.
California state solar tax credits and incentives
Several incentives, credits and rebates are available to all Californians who invest in solar energy systems. Other incentives in this list apply to multiple California counties or to lower-income energy customers.
Property tax exclusion for solar energy systems
California is one of 32 states that provide protection against property tax increases for homeowners who install solar panels. Under California law, all qualifying active solar energy systems will be excluded from the assessment of your property, meaning that installing solar panels will not impact your property taxes one way or another.
This property tax exclusion is currently scheduled to expire on Jan. 1, 2025.
California Self-Generation Incentive Program
Utility customers of the four major investor-owned utilities.- San Diego Gas Electric, SoCalGas, Southern California Edison and Pacific Gas Electric.- are eligible to receive rebates for installing solar batteries using California’s Self-Generation Incentive Program. The California Public Utilities Commission offers a 200 rebate for each kilowatt-hour of your solar storage system.
A fairly midsized battery like the LG Resu 16H Prime, one of the top picks in CNET’s list of best solar batteries, provides 16kWh of storage, which would result in a 3,200 rebate under the current rules in California. The battery itself will cost about 10,000 to 13,000 with installation, per CNET’s sister site SaveOnEnergy.
Disadvantaged Communities – Single-Family Solar Homes program
California’s DAC-SASH program provides solar incentives for low-income customers in disadvantaged communities. Administered by GRID Alternatives, the program offers Californians 8.5 million in incentives annually.
The California Public Utilities Commission says that eligible customers can receive up to 3 per watt in incentives for solar installations. The current cost per watt of solar panels in California is 3.93, so DAC-SASH participants could save about 75% on solar installations.
California net metering incentives
Net metering allows homes with solar installations to receive money back for contributing surplus solar energy to the broader electricity grid. New rules for net metering reduce the amount of money back for excess energy by 75%. While earlier net metering participants earned about 30 cents per kilowatt, new participants will get about 8 cents per kilowatt.
The new net metering plan comes with higher electricity rates for times when demand is high and access to renewable energy is low, making solar batteries more valuable.
PACE financing for solar panels
Property Assessed Clean Energy programs provide financing for solar installations that allows residents to pay back loans for solar panels with their property taxes. While commercial PACE loans are common throughout the US, only three states.- California, Florida and Missouri.- offer residential PACE programs.
Unlike mortgage loans, PACE loans usually require no down payment or monthly payments. Instead, borrowed money is repaid through homeowners’ property tax bills over a term of 10 to 30 years. However, a lien is placed on your home until the loan is fully paid off, which makes selling a home more complicated. Some lenders may not want to provide a mortgage for a home with an attached PACE lien.
Local communities may provide PACE-style financing of their own. The Sonoma County Energy Independence Program functions similarly to state-licensed PACE programs, letting participants pay back solar installations via their property tax bills over 10- or 20-year terms at 7.49% interest.
Local solar tax credits and incentives in California
Beyond the solar incentives at the state level, many cities, towns and municipalities offer additional incentives for residents who invest in solar energy projects.
Alameda Municipal Power income-qualified solar rebate
Residential customers of Alameda Municipal Power can get a small rebate for installing solar panels. You’ll get 500 back for any qualifying solar installation if you earn less than 106,000 and your home was built before Jan. 1, 2020. This incentive is designed to offset any fees involved with installing solar panels.
CleanPowerSF Solar Inverter Replacement Program
The San Francisco Public Utilities Commission and CleanPowerSF are currently running a program to help customers replace old, damaged solar inverters. The program is only available to existing GoSolarSF customers with a solar installation that’s at least 10 years old and no longer covered by warranty.
If your solar inverter needs replacing and you use a participating installer, you can receive up to 3,000 to cover the cost of the replacement.
While the solar inverter replacement program appears to be still active, the CleanPowerSF fact sheet notes that participating installers are current as of May 2022.
Lancaster Energy Power Choice
Residential customers of Lancaster Energy who can’t afford solar panels or don’t want to pay for them can get them installed for free by Tesla with the electric company’s Power Choice program. Tesla will install rooftop solar panels and a Tesla Powerwall Battery for no money at all, and customers will pay for energy usage and storage via their usual electric bill.
However, customers don’t get the tax incentives from the solar panels and can only leave the program by buying out the solar equipment and battery. Also, if a home in the Power Choice program is sold, the contract transfers to the new owner, which could make selling more complicated.
Los Angeles Department of Water and Power Solar Rooftops Program
LADWP’s Solar Rooftops Program gives its customers another way to contribute to solar power generation without spending anything for solar panels. LADWP installs, connects and maintains the solar panels on a homeowner’s property at no cost, and gives the homeowner an annual payment of 240 to 600 each year for 20 years. Customers’ electric bills are otherwise unaffected.
Changes to expect with SOMAH. Southern California Edison Company (SCE®)
Sacramento Municipal Utility District solar stipend
Along with 7.4 cents per kW back for your surplus solar energy, SMUD also provides a 150 stipend for solar panel installations. The money is targeted to pay for the production meter and other solar equipment for the interconnection, but you’ll need to act quickly. The solar stipend expires on May 31, 2023.
San Diego Green Building Incentive Program
The city of San Diego will waive building permit fees and plan check fees for the installation of residential solar panels.
Silicon Valley Power Low Income Solar Grant Program
Publicly owned Silicon Valley Power.- which mostly serves the city of Santa Clara.- provides grant money for solar panels to residential customers enrolled in its Financial Rate Assistance Program. Eligible customers who own their own solar installations can get 3.50 per watt for solar systems up to 3 kilowatts of power. Solar systems must produce at least 3,800 kWh annually.
SoCalGas Solar Thermal Water Heating System Rebate
SoCalGas customers in Central and Southern California can get a rebate of 5000,500 to 4,000 on qualifying solar water heaters. Your system must have a Solar Uniform Energy Factor of 1.8 or higher, and you’ll need to install a new Energy Star certified water heater along with your solar installation.
Local solar attic fan rebates in California
Many local energy providers offer rebates for energy-efficient appliances, including solar attic fans. These fans usually connect directly to dedicated solar panels to power themselves and cool down attics. Here are the publicly owned electric utilities that are currently offering rebates for solar attic fans.
Azusa solar fan rebate: Customers of Azusa Light and Water can get up to 150 as a credit on their electric bill with the purchase of a qualified solar fan for their attic or home using this application (PDF).
Glendale Water Power solar attic fan rebate: GWP customers who install solar attic fans can get 100 for each, or 125 if the fans were purchased in Glendale. Customers are limited to two rebates every 10 years at the same residence, and can apply for the rebate online.
Gridley solar attic fan rebate: The City of Gridley Electric Utility gives customers
Federal solar tax credits and incentives for Californians
The federal solar tax credit might be more valuable than any of the state and local incentives currently offered in California. It gives you 30% back in tax credit for expenses related to installing solar panels and batteries.
The official name of the federal solar tax credit is the Residential Clean Energy Credit, and though it was expected to expire in 2022, the Inflation Reduction Act extended the tax credit until 2035.
Applying for the federal solar tax credit is simple. Fill out IRS Form 5695 and include it with your tax return for the year in which you installed your solar system, or let the best tax software handle it for you.
The Inflation Reduction Act of 2022 keeps the federal solar tax credit at 30% until 2033, when it will drop to 26%. The credit will further decrease to 22% in 2034 and expire completely in 2035.
The solar tax credit is nonrefundable, meaning the credit you receive cannot be more than the amount you pay in taxes. You can, however, carry over any additional credit beyond your tax burden into future tax years.
.45 per cubic feet per minute back for solar attic fans as a rebate. Fill out the application (PDF) and mail or email it to the electric department.
Imperial Irrigation District solar attic fan rebate: Residential electric customers can get a 125 rebate for solar attic fans using this application (PDF).
Lodi solar attic fan rebate: The Lodi Electric Utility offers a rebate for solar attic fans that’s based on the capacity of your fan.-
Comparing California solar incentives
Values of incentives are based on a national 24,000 solar installation average (5000.99 per watt for a 8kWh system). State property tax is estimated at 1% of home value.

.15 per cubic feet per minute. You’ll need to complete this form (PDF) to apply for the rebate.
Modesto Irrigation District solar attic fan rebate: Residential customers of MID can get some money back (PDF) after purchasing a solar attic fan.- 100 for appliances with 20 watts of power or greater; 50 for fans with 10 to 19 watts. The application form (PDF) must be snail mailed back to the electric company.
Pasadena solar attic fan rebate: If you’re a Pasadena Water Power customer, you can get 80 back on a rebate for solar attic fans, plus another 20 if you purchased the fan in Pasadena. You’ll need to sign into your online account to apply for the rebate.
Riverside solar attic fan rebate: The electric company of Riverside provides a number of rebates for energy-efficient appliances, including solar attic fans. To claim the 100 rebate for a solar attic fan, complete and mail or email this form (PDF).
Ukiah solar attic fan rebate: Ukiah also provides a rebate for solar attic fans based on the capacity of the appliance. The city utility pays
California power purchasing agreements
If you don’t want to install solar panels yourself, a solar power purchasing agreement lets another company install solar on your property then charge you a predetermined amount for that solar energy.
Solar power purchasing agreements are an easy way to get solar power at no cost upfront, but you won’t get any of the tax incentives related to solar panels, and you’ll need to watch out for potential rate hikes over time.
Here are a few of the local public solar power purchasing programs available in California.
Santa Barbara Home Power Program
All Santa Barbara County residents can now get solar power installed in their homes at no cost upfront and without a lien on their property. Instead of paying for solar installations, participants in the Santa Barbara Home Power Program have solar panels installed for free and then pay for the energy generated by them.
The program is only available to residents without existing solar systems. Customers currently pay 24 cents per kWh for the first year of service, with rates increasing 2.9% annually.
Santa Clara Solar Water Heating Program
For homeowners who don’t want to install their own solar water heaters, the city of Santa Clara leases and maintains solar water heating equipment for its residents. Homeowners pay an installation fee and a monthly utility fee for the equipment, and the city takes care of the rest.
.20 per cubic feet per minute. Residential customers can apply for the solar attic fan rebate with this form (PDF).
Community solar programs in California
California has allowed community solar programs by law since 2013. Community solar projects let people use solar energy without installing solar panels on their property. The electricity comes from a large shared solar installation.
California recently passed the Community Renewable Energy Act, a law that aims to make community solar projects more accessible for renters and homeowners who cannot afford solar panels.
The Community Solar Green Tariff program provides a 20% discount on community solar energy for people living in disadvantaged communities. Also, some municipal power companies in California, such as the city of Anaheim, provide community solar discount programs for residential customers.
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Adding Solar Panels To an Existing Building
Before installing a solar system for your home or business, both Southern California Edison and the California Energy Commission (CEC) recommend undergoing an Energy Efficiency Audit, which can be done for free. Replacing inefficient appliances and changing incandescent lights to fluorescent ones along with a solar system will provide the greatest benefit.
Self-performed installations are permitted. If you need help choosing a qualified solar panel installer, the CEC maintains a database of solar installers, contractors, and retailers.
Incentives are available from Southern California Edison to solar customers, but an application is required prior to installation. Which application will be used depends on the type of building and the amount of energy solar will provide.
Adding Solar Panels To a New Building
The New Solar Homes Partnership (NSHP) offers support and incentives for those wishing to construct new residential buildings with solar capability.

Eligibility in the NSHP depends on which utility the home will use for its electrical service. Publicly owned, or municipal, utilities are not eligible.
Southern California Edison also offers information on eligibility, incentives, and information on how to apply.

Those not eligible for participation in the NSHP can participate in the overall California Solar Initiative, which offers rebates and incentives for all installation types. The federal government’s EnergyStar Program also offers tax rebates.
Permits
Prior to any installation, a plan check and permit is required. Please visit our Permit page for more details.
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