Switching to solar energy in San Diego has never been more rewarding. With a combination of federal tax credits, state rebate programs, and utility-driven incentives, residents and businesses can dramatically reduce the cost of solar installation in 2025. This comprehensive San Diego solar incentives and rebates guide outlines the most up-to-date opportunities to make solar more affordable and accessible.
Whether you're a homeowner, a small business, or a property developer, these programs can significantly reduce your out-of-pocket investment and increase your long-term savings.
Why Incentives Matter for Solar Energy
Although solar panel prices have dropped in recent years, the total cost of equipment, labor, permitting, and grid connection can still be substantial. Incentives help offset these costs, making it easier for property owners to make the transition to clean energy. In San Diego, incentives encourage solar adoption while supporting the region’s long-term environmental goals.
With energy costs on the rise, utilizing every available rebate or credit can greatly improve the return on your solar investment.
Federal Solar Investment Tax Credit (ITC)
The cornerstone of solar savings in 2025 is the Federal Investment Tax Credit (ITC). This program allows eligible taxpayers to claim a percentage of the total system cost as a deduction on their federal income taxes.
- 2025 ITC Rate: 30% of total system cost
- Eligible expenses: Panels, inverters, racking, wiring, labor, permitting, and energy storage
- Applies to: Residential and commercial systems
To qualify, your system must be installed and operational during the 2025 tax year. The ITC is a dollar-for-dollar tax credit and can be carried forward if not fully used in one year.
Self-Generation Incentive Program (SGIP)
California’s Self-Generation Incentive Program provides rebates for solar battery storage systems, making solar energy even more resilient and reliable. This is especially beneficial in San Diego, where energy storage helps offset time-of-use rates and protects against grid outages.
- Eligible systems: Battery storage paired with solar PV
- Rebate value: Based on system size and customer category
- Priority applicants: Low-income households and medically vulnerable residents
In 2025, SGIP funding continues to support grid stability and emergency preparedness throughout the state.
Net Energy Metering (NEM 3.0)
San Diego continues to participate in the Net Energy Metering (NEM) program, allowing solar users to earn credits for the excess electricity they send back to the grid. While NEM 3.0 has introduced new compensation rates, it still offers valuable financial benefits.
- How it works: Excess power exported to the grid is credited at a variable rate
- Applies to: Homes and businesses connected to the utility grid
- Best practices: Pair solar with battery storage to maximize savings
With strategic system design and usage timing, NEM 3.0 can still provide consistent monthly savings for solar owners in San Diego.
California Solar Property Tax Exclusion
Adding solar panels typically increases a property’s value—but under California law, solar installations are exempt from property tax reassessment. This means you can enjoy the benefits of a more valuable home without an increase in your property tax bill.
- Eligibility: Residential, commercial, and industrial solar installations
- Exclusion applies to: Active solar energy systems
- Duration: Through the end of 2026 (subject to renewal)
This incentive allows San Diego property owners to maximize resale value without added tax burden.
Local Utility Rebate Programs
Some San Diego area utilities offer limited-time rebates to support clean energy adoption. While these programs may vary year to year, certain providers periodically release funds for solar, battery storage, and energy efficiency upgrades.
Incentives may include:
- Solar installation credits for specific neighborhoods or income levels
- Battery rebates for time-of-use optimization
- Efficiency-based bonus incentives for bundling solar with HVAC or lighting upgrades
Check with your utility provider to see what may be active in your region. Our solar advisors can also assist in identifying all eligible local programs for your address.
Commercial Solar Incentives in San Diego
Businesses across San Diego benefit from multiple programs that encourage solar adoption in commercial and industrial spaces. In addition to the federal tax credit, businesses may qualify for:
- Accelerated depreciation under the Modified Accelerated Cost Recovery System (MACRS)
- Energy storage rebates and performance-based incentives
- Grants and clean energy funding through city or regional economic development initiatives
These incentives significantly reduce project payback time and enhance long-term profitability for commercial solar projects.
Stacking Incentives for Maximum Savings
Many San Diego property owners can combine multiple incentives to reduce total project costs. For example, a homeowner may:
- Claim the 30% federal tax credit
- Receive SGIP battery storage rebates
- Avoid increased property taxes through the solar exclusion
- Participate in NEM to offset ongoing electricity costs
Stacking incentives requires careful planning and timing, which is why many clients choose to work with knowledgeable consultants to maximize their savings opportunities.
Is Now a Good Time to Go Solar in San Diego?
Yes—2025 is a prime year for going solar in San Diego. With generous federal tax credits still in place and energy costs continuing to rise, solar offers immediate and long-term financial benefits. The combination of sunshine, state incentives, and new technologies means more control over your energy future and faster return on investment.
Plus, as more incentive programs shift toward battery storage and time-based rates, acting now ensures you secure the most favorable benefits available today.
Get Help Navigating San Diego Solar Incentives
Understanding which incentives apply to your property, income level, and system type can be complex. Working with local solar professionals ensures you won’t miss out on valuable rebates, credits, or savings opportunities. From paperwork to eligibility checks, a guided approach helps you take full advantage of everything 2025 has to offer.
Whether you're installing a new system or upgrading an existing one, now is the time to explore how San Diego solar incentives and rebates can help you reduce your energy bills, shrink your carbon footprint, and invest in long-term energy independence.
