2025 Solar Incentives Guide for Fairfield, CA - Tax Credits & Rebates
In this guide, we'll cover the latest solar incentives and rebates available in Fairfield.
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 Fairfield?
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" includes a range of financial incentives designed to make installing and using solar panels more affordable. This is done to encourage people to switch to renewable energy. Incentives may include things like discounts, cash back or credit on your utility bill each month. Some incentives are offered federally, while others are offered by the California government or your specific utility company, county or municipality. Categories of solar incentives include:
- Tax Credits: Tax credits are dollar-for-dollar reductions that lower the amount of income tax you owe the government. (This is different from a tax deduction.)
- Net Metering: Net metering is an incentive you can get once your solar panels are up and running. If you have a net metering agreement with your Fairfield utility company, the company will subtract the value of the excess energy your solar system produces from your utility bill each month. In some locations, this credit is dollar-for-dollar, while in others you may make back a percentage of the value.
- Tax Exemptions: Sales tax exemptions go into effect at the point of sale for your solar panels. Property tax exemptions allow you to ignore the value added by your solar system when you calculate the amount of property tax you need to pay.
- Rebates: Rebates, or cash back after a purchase, are typically applied prior to any solar tax credits being calculated. These rebates can be offered by your local utility company, by your state or by your county.
- Solar Renewable Energy Certificate (SREC): SRECs and other performance-based incentives are usually handled at the state level. Once your solar panel system meets the threshold (generally a small amount of energy production), you can receive SRECs that can be sold to your utility company or other buyers. The money you make from the sale is usually considered part of your taxable income.
Federal Solar Incentives
When thinking about solar incentives, you likely think of federal incentives first. The solar incentive that you're most likely to have heard of is the Federal Solar Investment Tax Credit (ITC), which provides a credit on your taxes equal to a predetermined percentage of the cost of your solar system.
The ITC is applied to the total cost of installing solar panels, including the panels themselves as well as equipment, labor and accessories. 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. The tax credit ranges from 26-30% of total costs depending on when your project was completed. There is no maximum amount you can claim.
To best understand how the ITC might apply to your situation, reach out to your local Fairfield solar panel installer and ask for more information.
In August 2022, the Inflation Reduction Act made revisions to the ITC, now titled the Clean Energy Credit. The Clean Energy Credit runs until 2035. Solar installation projects started after January 1, 2022, and completed by the end of 2032 may qualify for a 30% tax credit; the amount will decrease slightly each year until the end of the current program. Starting in 2023, the program expansion will also make claiming credit for energy storage systems easier than ever before.
More information about the new Inflation Reduction Act can be found here. Your local Fairfield solar panel installation experts can answer any questions you have and explain how the new Clean Energy Credit applies to you.
State & Local Solar Incentives
Federal solar incentives are not your only option; rebates, tax credits and more might also be offered at the state and local level. Some incentives are offered for only a limited time, while others are ongoing. Your local solar incentives could come from your county or municipality, or from the California government.
Next Steps for Installing Solar in Fairfield
There are a variety of solar incentives: those provided by local utility companies, those provided by the federal government and those provided by the California government, to name a few. The use of solar energy has increased enormously in the last 15 years, partially due to these incentives. Talking to your local Fairfield solar panel installer is the best first step towards getting all the incentives you qualify for when you switch to solar energy.
EcoWatch's Fairfield, CA Solar Incentives FAQs
How do I learn if I qualify for different solar incentives?
It's a smart idea to get in touch with your local Fairfield solar installer for a better understanding of which incentives your project may qualify for. Typically, solar incentives apply to new solar panel systems installed on a property you own (in the U.S.) between the dates specified by the incentive. Some incentives, like those offered by the government of California, may have other requirements.
What are the best solar panel installation companies near me?
To find a top-rated solar panel installer, check out our guide to the top solar companies in Fairfield.
How long until the federal solar tax credit ends?
The Clean Energy Credit (previously referred to as the federal solar tax credit, or ITC), is slated to end on January 1, 2035. Currently set at 30%, the credit will drop to 26% in 2033 and to 22% in 2034.
What if I am planning to add a solar system to a vacation home, rental property or commercial property? Do I still qualify for incentives?
Many solar incentives apply to a property located within the United States that you own, and most secondary residences will fall into this category. Other solar incentives may be available for commercial properties, depending on the details. We recommend talking to your local solar installer and/or tax professional to best understand what incentives may apply to your specific situation.
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