The California Solar Initiative offers $1.10/watt for installing solar panels. If the system you plan to install is less than 50 kilowatts in size, California will give you the $1.10/W incentive once the system is installed. If it's larger, your rebate will be based on how well your system performs.

The federal government offers a tax credit equal to 30 percent of the cost of a solar energy system through the Residential Renewable Energy Tax Credit. However, if you're looking to finance your system upfront, you may also want to look into Energy Efficient Mortgages, which allow you to borrow money for solar panels through a second mortgage.

Solar panels are also excluded from California property taxes, and if you're considered low income, you may be eligible for additional rebates of up to $7/watt through the Single-Family Affordable Solar Housing Program.

Anytime someone is considering installing solar, it's a good idea to get an energy audit to point out any areas in a home that are in need of an energy efficiency upgrade. By making more cost-effective improvements, such as air sealing or replacing an outdated refrigerator, you will use less energy and therefore need a smaller solar energy system to power your home. Even if you don't purchase solar panels, upgrading your home's efficiency will save you a lot of money on your utility bills for years to come.