California has long been the country’s leader for solar energy – it’s no surprise that the same is true for energy storage. Thousands of homeowners across California have already added a battery to their solar panel system and saved thousands while doing so thanks in part to the state’s leading energy storage incentive programs
The best way to compare your solar options and save money at the same time is by registering on the EnergySage Marketplace. When you compare quotes for solar panels on EnergySage's competitive solar marketplace, you can expect to see prices up to 20% lower than working with a single solar company. Read our updated article on the cost of solar panels to compare solar costs across states and by panel brand.
What storage incentives are available in California?
The Golden State is home to one of the longest-running storage incentive programs in the country: the Self-Generation Incentive Program (SGIP).
Self Generation Incentive Program (SGIP)
California’s top storage incentive, SGIP, provides businesses and homeowners in CA an upfront rebate for installing an energy storage system.
This incentive is a tiered-block program, meaning that the incentive values decline over time as more battery installations occur throughout the state. In addition to your utility company’s incentive “block,” your rebate value also depends on the size of the battery you install. For most residential customers, SGIP is currently in Step 6, or $200 per kilowatt-hour (kWh) of stored energy capacity. For the popular Tesla Powerwall 2 battery, this comes out to $2,700 in savings.
You can confirm the current SGIP block for your utility company on this dashboard.
Equity Resilience Incentives
As a part of the SGIP program, California offers an extra incentive for “Equity Resiliency” projects, including low-income households, customers living in high-risk fire areas, customers who experienced Public Safety Power Shutoffs (PSPS) events on two or more distinct occasions, and critical facilities that provide services to the affected areas. If you fall into one of these buckets, you’re eligible for an SGIP rebate or either $850 or $1,000 per kWh (more than four times the value of the standard SGIP incentive!) For most home energy storage options, this added incentive can cover the entire cost of installing a system.
For more information on the eligibility criteria for SGIP’s Equity Resiliency incentive, visit the California Public Utilities Commission’s website.
California tax benefits for energy storage
Most homeowners in California choose to pair an energy storage system with a solar battery. Fortunately, by doing so you can claim another advantageous incentive: the federal investment tax credit (ITC).
The federal investment tax credit (ITC)
Using the federal investment tax credit (ITC), you can claim up to 26 percent of the cost of your solar battery as a credit towards your federal taxes. For most homeowners, the ITC can help decrease the cost of a battery by an additional $3,000 to $4,000.
Importantly, standalone storage is not currently eligible for this tax credit: to claim this incentive for a home battery purchase, you need to charge the battery with an on-site renewable energy resource (like rooftop solar). If you have a residential solar panel system and you charge your battery with electricity from the grid, you cannot take advantage of this credit.