2023 Solar Incentives Guide for East Palo Alto, CA - Tax Credits & Rebates
In this guide, we'll cover the latest solar incentives and rebates available in East Palo Alto.
You'll learn about:
- Local & State Solar Incentives
- Federal Tax Credits (Updated for 2023 and beyond)
- Ways to optimize your solar investment
Solar installers are experts in maximizing your solar tax credits and rebates.
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By EcoWatch Local Advisors
Data Analysis: James Savino
Ranking Methodology: Karsten Neumeister
Updated March 14, 2023
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What Solar Tax Credits, Incentives, and Rebates are Available in East Palo Alto?
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 property The 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
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
City of Palo Alto Utilities - Solar Water Heating Program
Single-family residential electricity or propane-displacing systems: $0.54 per kWh displaced
Multifamily and Commercial gas-displacing systems: $14.53 per therm displaced
Multifamily and Commercial electricity or propane-displacing systems: $0.42 per kWh displaced
Low-Income Multifamily gas-displacing systems: $19.23/therm displaced
Low-Income Multifamily Electric or Propane Displacing systems: $0.56/kWh displaced
Federal Residential Renewable Energy Tax Credit
Solar incentives are designed to make renewable energy usage more affordable via financial incentives to help people install solar panels on their homes. You might qualify for various types of incentives, such as cash back, discounts or monthly utility bill credits, depending on your situation. Some incentives come from your specific utility company, county or municipality, some from the California government and others from the federal government. Some broad categories of solar incentives include:
- Solar Renewable Energy Certificate (SREC): SRECs and other similar performance-based incentives are typically handled at the state level. Once your solar system meets a certain threshold (normally a small amount of energy production), you can receive SRECs that can then be sold to your utility company or other buyers. The money you receive is generally considered part of your taxable income.
- Net Metering: Make sure you speak with your East Palo Alto utility company about signing a net metering contract. This will allow you to get a credit towards your monthly utility bill for the value of excess energy generated by your solar panels. You might receive either a dollar-for-dollar credit or a percentage of the value.
- Tax Credits: These credits are dollar-for-dollar reductions (not deductions) in how much in taxes you owe the federal government.
- Rebates: Some solar companies will help you claim a rebate, or partial refund of your purchase, for your solar system. Counties or states will also sometimes offer limited-time rebates. If you receive a rebate, that amount will usually be deducted from your total price before any tax credits are calculated.
- Tax Exemptions: These may come in the form of property tax exemptions, which allow you to exclude the value of your solar system when calculating the taxes you pay on your home. You could also look for exemptions on sales tax at the time of purchase.
Federal Solar Incentives
When you think about solar incentives, you likely think of federal incentives first. One of the incentives many people are probably familiar with is the Federal Solar Investment Tax Credit (ITC). This is a tax credit for a predetermined percentage of your solar system's cost.
The ITC can be applied to solar systems installed after January 1, 2006 on a primary or secondary residence that you own in the United States. Originally, the tax credit was for 30% of the total cost — for panels, labor, equipment and accessories — although it may range from 26-30%, depending on when your solar project was undertaken. There is no cap on the amount you can claim.
Your local East Palo Alto solar panel installation expert can offer more information about the ITC and how it applies to your situation.
In August 2022, the ITC (now called the Clean Energy Credit) was bolstered by the passage of the Inflation Reduction Act. The new Clean Energy Credit now runs until 2035. You can now receive a 30% credit for solar systems that began installation on or after January 1, 2022 and will be done by December 31, 2032. This credit will then be decreased by a few percentage points every year until its expiration. Starting in 2023, the expansion will also make claiming credit for energy storage systems easier than ever before.
Click here to learn more about the new Inflation Reduction Act. The best way to understand how the new Clean Energy Credit applies to you is to talk with your local East Palo Alto solar panel installation expert.
State & Local Solar Incentives
Some solar incentives may be offered at the local or state level. Similar to federal incentives, these might include rebates, tax credits and more. These solar incentives — which might be handled by the state of California, or by your county or municipality — may be offered for only a limited time, or on an ongoing basis.
Next Steps for Installing Solar in East Palo Alto
There are many kinds of solar incentives: those offered by the federal government, those offered by the California government and those offered by local utility companies, to name a few. The use of solar energy has increased tremendously in the last 15 years, partially thanks to these incentives. Your local East Palo Alto solar panel installer can give you more information about which incentives you should apply for, and get you feeling good about making the change to renewable energy today.
Best Regional Coverage
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- Concierge service ensures steady communication
- Slightly limited service offerings
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EcoWatch's East Palo Alto, CA Solar Incentives FAQs
My home already has solar panels. Are there any incentives that I qualify for?
You should plan to talk to a representative from the company that installed your solar system — or speak to a local East Palo Alto solar installer — to clarify which incentives you might qualify for. If your solar panels were installed after January 1, 2022, you likely qualify for the recently increased 30% tax credit under the Inflation Reduction Act. Solar panels installed between 2006 and 2021 may qualify for a tax credit of 26-30%.
How much can I save on my electric bill annually if I add solar panels to my house in East Palo Alto?
Generally, East Palo Alto homeowners who install solar panels save around $1,598.02 per year, or around $30,362.33 over 20 years after making the switch.
What are the top solar panel installation companies near me?
To discover the best solar panel installers near you, read our article on the top solar companies in East Palo Alto.
When does the federal solar tax credit end?
The federal solar tax credit, formerly known as the ITC and now named the Clean Energy Credit, is scheduled to end on January 1, 2035. The current 30% credit will end in 2032, replaced by a 26% credit in 2033 and a 22% credit in 2034.
Can I claim incentives both towards the initial cost of solar panels, and later as reimbursement?
Yes, you can receive both tax credits and rebates towards the cost of solar panels. Depending on which incentives you are receiving, they may apply in a different order. Make sure that you talk to your solar installer or a local tax professional to verify that you are claiming incentives correctly and getting the most money possible.
Our goal is to reach as many people as we can with sensible solutions like solar energy. Our team of full-time local researchers collects solar price and installation data for every city in America then compiles it to create these digestible city guides. If you want to read our solar expert's opinion on the top solar companies featured here, follow this link.
Solar incentive research was conducted by Melissa Smith and Karsten Neumeister. Local data analysis was conducted by James Savino. See something we missed or could do better? Email the editor.