2025 Solar Incentives Guide for Chico, CA - Tax Credits & Rebates
In this guide, we'll cover the latest solar incentives and rebates available in Chico.
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 Chico?
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
LADWP - Feed-in Tariff (FiT) Program
Base price will step down over time as certain MW goals are met
Self-Generation Incentive Program
Incentives will step down over time. See below for incentive amounts.
Property Tax Exclusion for Solar Energy Systems and Solar Plus Storage System
Local Option - Municipal Energy Districts
Renewable Market Adjusting Tariff (ReMAT)
Federal Residential Renewable Energy Tax Credit
Source: https://www.dsireusa.org/
Solar incentives encourage people to switch their home over to renewable energy by offering financial incentives that lower the burden of solar panel installation and use. The incentives can include cash back, upfront discounts or credit towards your monthly 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. Types of solar incentives might include:
- Net Metering: You can sign a net metering contract with your Chico utility company. This agreement may apply to all or a percentage of the excess electricity your solar panels generate. Your utility company will then deduct this value from your monthly utility bill.
- Tax Credits: Unlike tax deductions, tax credits reduce, dollar-for-dollar, the amount of income tax that you owe the federal government.
- Tax Exemptions: Tax exemptions can come in two forms. The first is sales tax exemption, which is applied when you purchase solar panels. The second is property tax exemption, which allows you to exclude the added value of your solar system when calculating property tax for your house.
- Solar Renewable Energy Certificate (SREC): SRECs and similar performance-based incentives are usually handled by your state government. Once your solar panel system meets the qualification threshold (typically a small amount of energy production), you are eligible to receive SRECs that can be sold to your utility company or other buyers. The money you receive from the sale is usually considered part of your taxable income.
- Rebates: Rebates, or cash back after a purchase, are typically given prior to any solar tax credits being calculated. Rebates may be provided by your local utility company, by your state or by your county.
Federal Solar Incentives
When you think about solar incentives, you likely think of federal incentives first. The solar incentive that you're most familiar with is probably the Federal Solar Investment Tax Credit (ITC), which provides a credit on your taxes equal to a percentage of the cost of your solar system.
The ITC can be applied to the total cost of solar system installation, including the panels themselves as well as accessories, labor and equipment. You can claim this credit for panels installed after January 1, 2006, on a primary or secondary residence that you own and that is located in the United States. From its original value of 30% of the total cost, the credit has fluctuated slightly between 26-30%, and you may qualify for varying percentages depending on when your project was completed. There is no maximum claim amount.
Reaching out to your local Chico solar panel installation expert is the best way to understand how the ITC may apply to your situation.
The ITC has been renewed and expanded following the passage of the Inflation Reduction Act in August 2022. It's also now called the Clean Energy Credit. The Clean Energy Credit lasts until 2035. Solar installation projects started after January 1, 2022, and completed by the end of 2032 may qualify for a 30% tax credit; this amount will then decrease slightly on a yearly basis until the end of the current program. The program expansion also makes it easier to get credit for energy storage systems, starting in 2023.
More information about the new Inflation Reduction Act can be found here. Your local Chico solar panel installation expert is the best person to answer your questions regarding the new Clean Energy Credit and how it may apply to you.
State & Local Solar Incentives
Tax credits, rebates and more can be provided at multiple levels. Along with federal solar incentives, there are often state and local ones as well. Certain incentives are ongoing, while others are only available for a limited time. Solar incentives may be provided by the California government, or by your county or municipality.
Next Steps for Installing Solar in Chico
Solar incentives might be provided by the California government, the federal government or your local utility company. The large number of available incentives has helped nationwide use of solar energy increase greatly in the last 15 years. Contact your local solar panel installation company today to learn more and to save the most money possible on solar panels for your Chico home.
EcoWatch's Chico, CA Solar Incentives FAQs
My home already has solar panels. Does my system qualify for any 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 your system was installed between 2006 and 2021, you may qualify for a tax credit between 26% and 30%, depending on the date of installation. Reaching out to the company that installed your solar system, or any local Chico solar installer, can help you learn more about what incentives you qualify for.
What are the environmental benefits of switching to solar energy?
Solar energy is a renewable energy source — by changing where you get your energy, you help lessen the strain on our planet's resources. A solar system can also reduce your home's CO2 emissions by 250 pounds a year, or around 5,000 pounds over 20 years.
How long until the federal solar tax credit ends?
The Clean Energy Credit (formerly named the federal solar tax credit, or ITC), currently ends on January 1, 2035. Currently set at 30%, the credit will drop to 26% in 2033 and to 22% in 2034.
I want to change out my appliances for ones that are more energy-efficient. Are there any incentives I can get?
The new Inflation Reduction Act introduces multiple incentives designed to reward homeowners for making eco-friendly upgrades. Some of these incentives include tax credits and rebates for installing new electric appliances. You can find more details about these incentives here.
Can I claim incentives both towards the up-front cost of solar panels, and later as reimbursement?
The order your incentives will be applied in may vary depending on which incentives you receive but usually yes, you can receive multiple types of incentives for your solar project. Check with your solar installer or a local tax professional to verify you are claiming all the incentives you're eligible for and applying them in the correct order.
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