Frequently Asked Questions about Solar

How does solar work?

Solar systems produce electricity when sunlight hits the cells inside of solar panels. This causes the cells to release electrons that are captured in the form of current. The type of current produced is direct current (DC), which must be converted into alternating current (AC) by a device called an inverter so that you can use it to operate lighting, air conditioning and other electric-powered equipment.


How will I benefit from solar?

You’ll receive several direct and indirect benefits by installing solar, as will your community:

Financial: You’ll save money on your energy costs by replacing electricity that you’re now buying from your utility with lower-cost electricity that you’re generating yourself.

Environmental: Solar energy produces no emissions, greenhouse gases or waste. You’re helping to preserve our environment by using a free and endless source of power – the sun!

Employment: More than 86,000 people are employed in California’s solar industry, primarily in community-based jobs that can’t be exported. Installing solar supports the local economy by keeping these workers employed and creating new job opportunities.


What tax credits and incentives are available for solar energy?

The Solar Investment Tax Credit, or ITC, allows residential and commercial owners of solar systems to claim a 30% credit against their federal income tax liability. For example, a business owner who spends $100,000 on a solar installation can take $30,000 off their federal income taxes. However, the ITC will begin stepping down for commercial customers in 2020 until it reaches 10% in 2024. The ITC will end completely for residential customers in 2021. Commercial customers may also qualify for accelerated depreciation on their solar systems.

On the state level, California’s three major investor-owned utilities (PG&E, SCE and SDG&E) no longer offer rebates for solar. However, a number of the state’s municipally-owned utilities and co-ops still offer their own rebate programs. If you’re a customer of a muni or co-op, check their website for details. If you’re installing solar in a state other than California, you can look up your state’s solar incentives in the Database of State Incentives for Renewables & Efficiency (DSIRE)


What is a solar lease and/or power-purchase agreement (PPA)?

A lease or PPA is a way for a homeowner or business owner to enjoy the benefits of solar energy without having to buy, own and maintain a solar system themselves. Under this scenario, a solar developer installs a system on a home or business’ roof in return for a monthly payment (lease) or a fixed price for each kilowatt hour generated (PPA). The developer owns and maintains the system, and generally collects any tax credits or incentives the system may be eligible for. Leases and PPAs are also popular with schools, religious institutions and non-profits that can’t take advantage of the tax credits.


If my roof isn’t big enough to hold a solar system, do I have any other options?

Yes. California is among a small but growing number of states that have adopted a concept called Community Shared Solar. California calls its program GTSR, an acronym for Green Tariff/Shared Renewables. GTSR allows a home or business owner to buy or lease a share of a large-scale solar system that is owned by a utility company or private developer and is installed at a remote location. The home or business owner’s monthly electric bill is then credited for the amount of electricity produced by their share of that system.


What companies use solar panels to power their businesses?

Thanks to its scalability, solar can be used by virtually every type of business in California. From retail stores to office parks; from small warehouses to large manufacturing plants; from local schools to large universities, solar is everywhere – saving money on energy costs, improving the environment and stimulating the local economy.


If my business is closed on weekends, what happens to the power my solar system produces?

You’ll receive credit for every kilowatt-hour your solar system produces, regardless of whether your business is able to use it at the time it’s produced. California is among a number of states that allows net metering. Under net metering, any electricity produced by your system in excess of what your business needs at that time is sent back into the grid. Your electric meter literally spins backwards and your account is credited for that excess power. Your utility will bill you only for the net amount of electricity you used, i.e., the difference between the kilowatt-hours you drew from the grid and the kilowatt-hours you sent back.


What happens to solar panels when it’s cloudy or raining?

Solar systems will still produce some electricity when it’s cloudy – or even raining – during the day, but nowhere near the amount they can produce when the sun is shining brightly.


Will a solar system keep my lights on in the event of a power outage?

Generally, no. The system’s inverter – the device that converts DC power to AC – also connects it to the power grid so that any excess power the system produces can be sold into the grid. The inverter can sense a power outage and will automatically shut down so that utility workers trying to restore service won’t be injured by electricity running through the lines. Solar systems can be configured to cut themselves off from the grid during an outage and continue to provide power to the building where they’re located – a practice known as “islanding”. However, setting up an islanding system may come at a significant additional cost. Solar systems can also be integrated with energy storage – large batteries that can store the excess power the system generates and discharge it during an outage.