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California is, by most accounts, the country’s leader in pro-solar legislation. Under the leadership of Governor Schwarzenegger, the state has pushed to get utilities to commit to producing 20% of their power from renewable sources by 2010. Tellingly, California accounts for about 85% of all solar installations nationwide.

The hallmark of the state's efforts is the California Solar Initiative (CSI), which aims to add 3,000 megawatts of new solar power by 2017. As a resident, you can expect to get a rebate of $2.50 per watt of installed power, though this amount decreases as more and more individuals participate in the program. Plus, there are a number of tax breaks and interesting grant options. Read below for more details.

California Tax Incentives

 
Tax deduction for interest on loans for energy efficiency

Eligible:
Solar water heat and photovoltaics for residential applications (plus wide spectrum of energy-saving improvements, including caulking/weather-stripping, lighting, insulation and advanced metering)

Amount:        
100% of the interest from eligible loans 

 
Solar Energy Property Tax Exemption

Eligible:  
All types of solar for applications in commercial, residential and industrial sectors

Amount:        
100% of system value (no maximum)

Overview: 
Under Section 73 of California’s tax code, certain types of solar  energy systems are eligible for a property tax exemption (i.e., the installation of a solar system does not increase the owner’s tax liability).

Other info:
To be eligible system must be installed before December 31, 2009. Solar systems for pool heating are not eligible. System owners should contact their County Assessor's office for further information.

Tax incentives   Rebates   Grants and Loans