2025 Solar Incentives Guide for Encinitas, CA - Tax Credits & Rebates
In this guide, we'll cover the latest solar incentives and rebates available in Encinitas.
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 Encinitas?
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/
Solar incentives are intended to make renewable energy usage more affordable through financial incentives for those who install solar panels on their homes. Different types of incentives, such as cash back, discounts or monthly utility bill credits, may be available to you. Some incentives may be handled by the California government, by your utility company or by county or municipality, while others are federal. You might qualify for any of the following types of solar incentives:
- Solar Renewable Energy Certificate (SREC): SRECs and similar performance-based incentives are generally handled at the state level. Once your solar system meets a certain threshold (typically a small amount of energy production), you are eligible to receive SRECs that you can then sell to your utility company or other buyers. The money you receive is generally considered part of your taxable income.
- Tax Exemptions: These might come in the form of property tax exemptions, which would allow you to exclude the value of your solar system when paying property tax on your home. You may also qualify for an exemption on sales tax at the time of purchase.
- Rebates: A solar rebate is a partial refund given after you've purchased 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 tax credits are calculated.
- Net Metering: Net metering is an incentive you can get once your solar system is up and running. If you've signed a net metering agreement with your Encinitas utility company, they will subtract the value of the excess energy your solar system produces from your utility bill each month. In some areas, this is a dollar-for-dollar credit, while in others you might make back a percentage of the value.
- Tax Credits: Tax credits are dollar-for-dollar reductions (not deductions) in the amount of tax that you owe the government.
Federal Solar Incentives
Federal solar incentives are probably the first thing that comes to mind when thinking about solar incentives. It's likely that you've heard of the Federal Solar Investment Tax Credit, or ITC. This is a tax credit equal to a certain percentage of the money you spend on your solar system.
The ITC can be applied to the total cost of installing a solar system, including the panels themselves as well as labor, equipment and accessories. This credit can be claimed for panels installed after January 1, 2006, on a primary or secondary residence that you own, as long as it 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 Encinitas solar panel installation expert is the best way to learn more about how the ITC could apply to your situation.
In August 2022, the Inflation Reduction Act expanded and extended the ITC, now referred to as the Clean Energy Credit. The new Clean Energy Credit extends until 2035. You can now receive a 30% credit for solar systems that began installation after January 1, 2022, and are completed by the end of 2032. This new credit will then see a slight annual decrease until its expiration. The expansion also makes claiming credit for energy storage systems easier than ever before, beginning in 2023.
Click here to learn more about the new Inflation Reduction Act. To understand how the new Clean Energy Credit might apply to you, get in touch with your local Encinitas solar installation company.
State & Local Solar Incentives
In addition to federal solar incentives, there are often also state ones. Tax credits, rebates and more might be available at a more local level. Incentives may be provided by the state of California, or by your county or municipality. Some incentives are available for only a limited time, while others are ongoing.
Next Steps for Installing Solar in Encinitas
The nationwide use of solar energy has gone up tremendously in the past 15 years, in part thanks to the increase in availability of solar incentives. You can obtain these incentives from the federal government, the California government or your local utility company. Contact your local solar panel installer today to find out more information and to save the most money possible on solar panels for your Encinitas home.
EcoWatch's Encinitas, CA Solar Incentives FAQs
How can I find out if I qualify for different solar incentives?
Generally, solar incentives apply to:
- a new solar system
- installed on property you own
- within the U.S.
- within the date range specified by a particular incentive.
Specific incentives, including those run by the California government or by your county/municipality, sometimes have additional qualifications. Speak with your local Encinitas solar installer to find out what incentives your project may qualify for.
I already have solar panels. Do I qualify for any incentives?
An excellent idea would be to talk to someone from the company that installed your system – or get in touch with a local Encinitas solar installer — to better understand which incentives you may qualify for. If your solar panels were installed after January 1, 2022, you likely qualify for the newly increased 30% tax credit under the Inflation Reduction Act. Solar systems installed between 2006 and 2021 may qualify for a tax credit of 26-30%.
What are the highest-rated solar panel installation companies near me?
To learn about the top solar panel installation companies near you, read our article on Encinitas' top solar panel companies.
I want to switch my appliances out for ones that are more energy-efficient. Are there any benefits I can claim?
Under the new Inflation Reduction Act, there are a variety of new financial incentives for making eco-friendly improvements to your home. More details regarding these incentives, including information about incentives for purchasing new appliances, can be found here.
Can I claim incentives for adding solar panels to a vacation home, rental property or commercial property?
Many solar incentives apply to a property you own that is located within the United States; most secondary residences will fall under this distinction. There may be other solar incentives available for commercial properties, depending on the details. We recommend reaching out to your local solar installer and/or tax professional to better understand what incentives may apply to your specific situation.
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