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California Feed-in-Tariff

According to State law, Feed-in Tariff (FiT) programs are coming to all of California. Los Angeles is one of the first markets to launch a Solar FIT program. Two of the municipal utilities in LA County, the Los Angeles Department of Water and Power (LADWP) and the Glendale Water and Power Department (GWP) began offering FiT programs in July, 2013. The California FIT program is good news for rental property or apartment building owners. They can install solar panels and get paid for the power, while the tenants will still have their own electric utility bill.

The latest information is that California property owners with solar panels can be paid by their utility for the solar energy they produce. Contracts are typically 10 to 15 years, sometimes even longer. The FIT is available for any customer of an investor-owned utility (like Southern California Edison, Pacific Gas and Electric, or San Diego Gas and Electric) or any publicly-owned utility with 75,000 or more customers. The state has required utilities to get 20% of their power from renewable energy by 2020, and the California FIT program is intended to help reach that goal.

How much can I be paid for the FIT?

The rate of payment is approved by the California Public Utilities Commission, but varies by market and utility. For example, the F-i-T contract rate for Los Angeles (LADWP) starts at $0.17 per kWh in 2013, then declines to $0.13 per kWh for contracts established in 2015. Neighboring Glendale (GWP) has a below market rate of $0.079 per kWh during peak delivery times and $0.066 per kWh during off-peak times.

The amount is also based on the year you sign up and the length of your contract. Contracts typically have a base rate, which can increase or decrease with a time-of-day multiplier. Generally, you’ll earn more during peak electricity periods when the solar panels produce the most power.

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The Time-of-Day factor

Your utility will multiply the amount you earn by a number based on the time of day and season. During the middle of the day in summer, when electricity demand is typically the highest, you’ll earn more money. Conveniently, this is also the time when your solar panels will probably be producing the most power.

Can feed-in-tariffs be used along with other incentives in California?

No, the FIT can’t be used if you’ve received a rebate from your utility for your solar panels, or if you’re participating in other utility solar incentive programs or the California Solar Initiative. It also can’t be used if you’re receiving a net metering tariff. You can use it along with the federal solar tax credit.

Because of the rates on the FIT program, many homeowners are choosing to use other solar incentives instead. Depending on the rates set for the California Solar Surplus Act, that may be a more attractive way to be paid for the energy extra you generate. If you are interested in learning more about the California FIT, check with your utility company.

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