2025 Solar Incentives Guide for Alhambra, CA - Tax Credits & Rebates
In this guide, we'll cover the latest solar incentives and rebates available in Alhambra.
You'll learn about:
- Local & State Solar Incentives
- Federal Tax Credits (Updated for 2024 and beyond)
- Ways to optimize your solar investment
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What Solar Tax Credits, Incentives, and Rebates are Available in Alhambra?
Property Tax Exclusion for Solar Energy Systems and Solar Plus Storage System
Western Riverside Council of Governments - Home Energy Renovation Opportunity (HERO) Financing Program
Minimum financing: $5,000
The financing may not exceed fifteen percent (15%) of the market value of the property, up to the first seven hundred thousand dollars ($700,000) of the property’s market value, and ten percent (10%) of the remaining value of the Property above seven hundred thousand dollars ($700,000) minus any PACE assessment on the propertyThe total amount of any annual property taxes and assessments shall not exceed five percent (5%) of the property's fair market value, determined at the time program financing is approved.
Local Option - Municipal Energy Districts
Self-Generation Incentive Program
Incentives will step down over time. See below for incentive amounts.
Renewable Market Adjusting Tariff (ReMAT)
LADWP - Feed-in Tariff (FiT) Program
Base price will step down over time as certain MW goals are met
California Solar Initiative - Solar Thermal Program
Single Family Residential Incentives:
Systems that displace natural gas: $29.85 per estimated therm displaced
Systems that displace electricity or propane: Funding has been exhausted
Commercial/Multifamily Incentives:
Systems that displace natural gas: $20.19 per estimated therm displaced
Systems that displace electricity or propane: $0.42 per estimated kWh displaced *** Note, funding has been exhausted in this category for SCE and PG&E
Solar Pool heating: $5.00 per estimated therm displaced
Federal Residential Renewable Energy Tax Credit
Source: https://www.dsireusa.org/
The phrase "solar incentives" broadly refers to financial incentives that are in place to encourage people to use renewable energy by making solar panels more affordable. These incentives could include upfront discounts, cash back or monthly credits towards your utility bill. Some incentives are provided by the federal government, some by the state of California and some by your specific utility company, county or municipality. Categories of solar incentives include:
- Tax Credits: Tax credits are dollar-for-dollar reductions (not deductions) in how much in taxes you owe the federal government.
- Tax Exemptions: Your solar panel system may qualify for both sales tax and property tax exemptions. Sales tax exemptions come into effect at the time of purchase. Property tax exemptions allow you to ignore the added value of the solar panels when calculating property taxes on your house.
- Solar Renewable Energy Certificate (SREC): Typically, solar systems that produce over a specific (normally small) amount of electricity qualify for SRECs or other performance-based incentives. SRECs and performance-based incentives in general are typically provided at the state level. When you receive an SREC, you can sell it to your utility company or another buyer, and this is usually considered part of your taxable income.
- Net Metering: Net metering becomes relevant after your solar system is up and running. If you have a net metering agreement in place with your Alhambra utility company, the company will subtract the value of the excess energy produced by your solar system from your monthly utility bill. In some places, this is a dollar-for-dollar credit, while in others you might be refunded a percentage of the value.
- Rebates: A rebate is a partial refund credited to your account after you've paid for your solar panels. Rebates may be offered by your local utility company, your state or your county. The cash back that you get from the rebates is normally applied before calculating tax credits.
Federal Solar Incentives
Federal incentives are the kind of incentives that you are most likely to have some familiarity with. A federal incentive that most people are probably familiar with is the Federal Solar Investment Tax Credit (ITC). The ITC is a tax credit for a specified percentage of the cost of your solar system.
The ITC originally covered 30% of the cost of installing solar panels, although that number has fluctuated slightly over the last few years between 26-30%. The percentage you qualify for will depend on when your solar system was installed. The total cost of installation includes the panels themselves as well as the cost of labor, equipment and accessories. There is no maximum amount you can claim. The ITC can be applied to solar panels installed after January 1, 2006, on your primary or secondary residence. The residence must be in the United States and owned by you.
To more fully understand how the ITC will apply to you, contact your local Alhambra solar panel installation expert and request more information.
The Inflation Reduction Act, passed in August 2022, added more provisions to the ITC (as well as retitling it the Clean Energy Credit). Homeowners are now eligible for a credit of 30% of the total solar system installation costs for projects that began after January 1, 2022, and will be finished by the end of 2032. The credit percentage will then begin to decrease annually until the Clean Energy Credit ends in 2035. Starting in 2023, it will also be easier to get credits for energy storage systems with the new act.
Click here to learn more about the new Inflation Reduction Act. Your local Alhambra solar panel installation expert is the best person to answer your questions about the new Clean Energy Credit and how it applies to you.
State & Local Solar Incentives
Some solar incentives are often also provided by state and local governments. Similar to federal incentives, these can include rebates, tax credits and more. These incentives might be handled by the California government, or by your county or municipality. Certain incentives are available for a limited time, while others are ongoing.
Next Steps for Installing Solar in Alhambra
There are a number of different solar incentives: those offered by local utility companies, those provided by the California government and those offered by the federal government, to name a few. Solar energy utilization has increased enormously in the last 15 years, partially thanks to these incentives. Your local Alhambra solar panel installation company can provide you with more details about which incentives you might qualify for, and get you on track to switch to renewable energy today.
EcoWatch's Alhambra, CA Solar Incentives FAQs
If my house already has solar panels, can I still claim incentives?
If your solar system was installed after January 1, 2022, you may qualify for the newly increased 30% tax credit under the Inflation Reduction Act. If you had your system installed between 2006 and 2021, you might qualify for a tax credit between 26% and 30%, depending on the year it was installed. Speaking with a representative from the company that installed your solar system, or any local Alhambra solar installer, can help you understand what incentives you qualify for.
How much can I save on my electric bill annually if I install solar panels on my house in Alhambra?
Generally, homeowners in Alhambra who install solar panels save about $1,448.59 per year, or approximately $27,523.28 over 20 years after making the switch.
What are some environmental benefits of adding solar panels to my house?
Solar energy is renewable — by switching where you get your energy, you help reduce the strain on our planet's resources. Solar panels can also reduce your home's CO2 emissions by 250 pounds a year, or roughly 5,000 pounds in 20 years.
Can I receive incentives both towards the up-front cost of solar panels, and later as reimbursement?
The order in which incentives are applied may vary depending on which incentives you are eligible for but usually yes, you can claim multiple types of incentives for your solar project. Talk with your solar installer or a local tax professional to verify you are claiming all possible incentives and applying them in the correct order.
Can I use a combination of multiple types of renewable energy to power my home?
Yes, you can use multiple types of renewable energy to power your home, such as a combination of solar and wind power. You can also use both renewable energy sources and a backup source of non-renewable energy. You should discuss the details of your plan with your local Alhambra solar installation expert, so that you understand what you'll need and what types of incentives you might or might not qualify for.
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