San Diego Solar Incentives
San Diego homeowners have access to some of the strongest solar savings in the country. The 30% federal tax credit applies to both panels and battery storage with no dollar cap. Local programs through SDG&E and San Diego Community Power can reduce or even eliminate out-of-pocket costs for qualifying households. Knowing which incentives to stack can cut years off your payback period.
Key Incentives Available in 2025
30%
Federal Investment Tax Credit on solar plus battery, through 2032.
$6k–$8.4k
Typical ITC value on a $20k–$28k San Diego installation.
$350/kWh
SDCP battery storage rebate, capped at $10,000.
100%
Coverage for qualifying low-income households via SDG&E Solar Equity Program.
Federal Solar Tax Credit (ITC)
The Federal Investment Tax Credit gives you a 30% reduction on your total system cost - panels, battery storage, wiring, and installation - credited directly against your federal income tax. There is no income limit and no maximum dollar cap. A $20,000 system saves you $6,000 in federal taxes; a $28,000 system saves you $8,400. The credit rolls over to future tax years if you cannot use it all in year one. You must own the system outright through a purchase or loan. Leases and power purchase agreements do not qualify. The 30% rate holds through 2032, then steps down to 26% in 2033 and 22% in 2034.
See how the credit affects your upfront cost in our guide to the full cost of solar in San Diego.
SDG&E Solar Equity Program
The Solar Equity Program is a $10 million fund administered through the Center for Sustainable Energy, using SDG&E shareholder money to help low-income San Diego homeowners go solar at little or no cost. It covers installations up to 6.5 kW at $4 per watt, plus up to $3,500 for electrical panel upgrades and $1,000 for contractor training. Households must earn 80% or less of the area median income and live in an area designated for very low, low, or moderate socioeconomic opportunity. Applications opened in September 2024 on a first-come, first-served basis.
SDCP Battery Storage Rebate
San Diego Community Power offers two battery storage incentives for SDCP customers. The upfront incentive is $350 per kWh of usable capacity, with a ceiling of $10,000. There is also a performance-based incentive for energy discharged during two-hour peak event windows in 2024 and 2025. To qualify, your battery must be new, charged exclusively by solar power, installed by an approved contractor, and connected under the proper permit. The program runs on a first-come, first-served basis. Under NEM 3.0, battery storage is the single biggest lever for maximizing the value of a San Diego solar system - instead of exporting cheap midday energy to the grid, you store it and use it during expensive evening hours.
California Property Tax Exclusion
Installing solar panels adds market value to your home, but California's Active Solar Energy System Exclusion keeps your property taxes from rising because of it. The installation's added value is excluded from your assessed property value for as long as the system remains in place. This applies to space conditioning, electricity production, and water heating systems, but not solar pool heaters or passive systems. The exclusion covers systems installed before January 1, 2027. Within San Diego's unincorporated areas, the Green Building Incentive program also waives building permit fees for solar installations.
Net Metering Under NEM 3.0
California moved from NEM 2.0 to NEM 3.0 in 2023. Export credits under NEM 3.0 are set at a lower avoided-cost rate rather than the full retail rate. Solar energy costs roughly 7 cents per kWh when you factor in tax credits, compared to SDG&E's grid rate of around 40.9 cents per kWh. The math still strongly favors going solar - especially when you add battery storage to shift your solar energy use to peak-rate hours. Customers who locked in NEM 2.0 rates before April 14, 2023, keep those rates for 20 years.
Want to understand exactly what a system costs before incentives? See the average cost of solar in San Diego.
Frequently Asked Questions About San Diego Solar Incentives
How much is the federal solar tax credit in 2025?
It is 30% of your total system cost, including battery storage, and stays at 30% through 2032. On a typical San Diego system costing $20,000 to $28,000, that comes to roughly $6,000 to $8,400 credited against your federal taxes when you own the system outright.
Who qualifies for the SDG&E Solar Equity Program?
Homeowners who earn 80% or less of the San Diego County area median income and own a single-family home, duplex, or manufactured home. The program covers nearly 100% of installation costs plus up to $3,500 for electrical panel upgrades.
What is the SDCP battery storage rebate?
San Diego Community Power offers $350 per kWh of usable battery capacity, capped at $10,000, for customers who install a new battery system charged exclusively by solar power. You must be an active SDCP customer and use an approved contractor.
Does California's property tax exclusion still apply?
Yes. Solar installations in California are exempt from property tax reassessment under the Active Solar Energy System Exclusion. Your home's assessed value will not increase because of the solar addition. This exclusion applies to systems installed before January 1, 2027.
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