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State-funded RSSE does not reduce the ITC basis

How the 2025 SGIP Rebate and 30% Federal Tax Credit Work Together for Solar + Battery in California

California homeowners can now qualify for over $30,000 in incentives when they install solar and battery systems — but understanding how the SGIP rebate and the 30% Federal Solar Tax Credit (ITC) work together is crucial for maximizing savings.

✅ SGIP RSSE Rebate (2025 Overview)

The Residential Solar and Storage Equity (RSSE) budget under SGIP provides massive rebates to income-qualified households.

Rebate Rates:

  • Battery: $1,100 per kWh

  • Solar (when paired with battery): $3.10 per watt

  • Panel/wiring upgrades: Up to $3,500

✅ Most customers receive $25,000–$35,000 in total rebates.

💸 30% Federal Tax Credit Explained

The Residential Clean Energy Credit is a federal incentive that lets you deduct 30% of the solar/battery system cost on your taxes. You claim it using IRS Form 5695.

⚖️ How Do SGIP and ITC Work Together?

📘 Ratepayer-Funded SGIP (older budget)

  • You must reduce your tax credit basis by the SGIP rebate.

  • Example:
    Project cost = $30,000
    SGIP = $27,000
    ITC = 30% of $3,000 → $900 credit

📗 State-Funded RSSE (2025)

  • IRS does not require basis reduction

  • BUT SGIP assumes you will claim ITC and reduces your rebate by 30% (unless you prove otherwise)

  • Example:
    Project cost = $30,000
    SGIP pays $21,000
    ITC = 30% of full cost = $9,000
    Combined savings = $30,000

🧾 What If You Can’t Use the ITC?

If you don’t have enough tax liability, SGIP will let you keep the full rebate — but you must provide proof (e.g. low income, no third-party ownership).

💡 Bottom Line:

If you qualify for the RSSE rebate, you may pay little to nothing out of pocket and still receive a federal tax credit — but only if the project is structured correctly.

📞 Apply Before the Deadline

Ally Electric & Solar is a local, SGIP-approved contractor with 24+ years of experience helping Bay Area families electrify their homes affordably.

🟢 Program Opens: May 20, 2025
🔴 Submission Deadline: June 2, 2025
🕒 First-Come, First-Served — Don’t Wait!

📲 Call us at 510-559-7700
📧 Email nsaglam@allyelectricandsolar.com
📋 We'll reserve your spot and handle the paperwork.

📞 Schedule Your Free Eligibility Review

Ally Electric & Solar is a local, SGIP-approved contractor with 24+ years of experience helping Bay Area families electrify their homes affordably.

📲 Call us at 510-559-7700
📧 Email nsaglam@allyelectricandsolar.com

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Get the most from California's 2025 SGIP RSSE rebate and 30% federal solar tax credit. Learn how these powerful incentives interact and how to qualify for both.

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