Have you heard of the California Climate Credit? Don’t worry if not; most California residents aren’t aware of this program, what it does, and why it happens, but as utility customers just got their first climate credit of the year applied to their April energy bills, now seems like a good time to break down the program and learn more about it. The main reason for this is simple: while we’re always in favor of energy savings, especially those rooted in clean energy, the climate credit is actually an incredibly valuable resource for those considering a solar installation.

What is the California Climate Credit?

The California Climate Credit is a portion of the benefits provided by California’s Cap-and-Trade Program, distributed to ratepayers through a discount on their energy bills. The money is generated by the purchase of carbon pollution allowances, and is distributed to residential customers and beyond as an energy credit.

Where does the Climate Credit come from?

The California Climate Credit comes from the funds generated by the Greenhouse Gas Cap-and-Trade Program, which is meant to support California’s green energy goals. The basic goal of a Cap-and-Trade program like this is to create an upper limit of carbon emissions for businesses, creating both a market for unused carbon production and an incentive to invest in green energy alternatives.

Businesses who are not going to use their allotted carbon allowance can sell the remainder to companies who know they will go over their prescribed limit, and those funds are then distributed to ratepayers through the utility in the form of a credit. Ultimately, this program will increase the cost of power, but the hope is that this increase will be mitigated by the application of these credits to consumer bills. However, these annual climate credits have an unintended side effect which makes them incredibly valuable as a demonstration tool.

Why is the Climate Credit like a Free Solar Trial?

The pure purpose of the climate credit program is to provide relief to customers facing high energy bills using the funds generated by California’s clean energy efforts. However, this also serves to provide a unique demonstration of the power of a solar installation. Consider this - most small purchases can be tried out before they are completed, like trying on a shirt to check how it fits, or smelling a bottle of shampoo to confirm whether or not it smells nice. Even some larger purchases, like a car, include the all important test drive to ensure the vehicle is up to your standards.

A solar system is a large investment, and their custom nature means that it would be impossible to simply loan out a test unit to any customer looking to observe the savings potential of an installation for themselves. This is where the climate credit comes in. Our solar consultants would be happy to help you access this information, but feel free to visit this link and see for yourself.

You should be able to compare the differences between your bills last year, this year, and in the last few months, where you will see a large spike due to rate increases, and a sudden period of relief in April. If you like the look of the April bill, then you’re in luck - that’s just a taste of the savings you can access with a solar + storage system installed on your home or property.

Climate Credit Distribution

Important to note that two of these climate credits are scheduled to be distributed every year, with one in April and one in October, so you will have another chance to see what a month of solar savings would be like. Just remember to take a look at your bill payment history to see the impact of the credits, and then imagine what it would be like to pay less on your energy bill every month before and after the credit.

Climate Credit, Meet Solar Savings

The Climate Credit is a great program in general, and specifically as a tool for visualizing the impact of solar. Our goal is to make solar as accessible as possible so that everyone can enjoy the benefits of an installation, but the one thing we can’t do is reduce your monthly bill pre-installation. The climate credit is the perfect way to see what that would be like before we make it happen for real. If you’re ready to enjoy the power of a permanent climate credit, schedule a free consultation today.