2025 Solar Incentives Guide for Folsom, CA - Tax Credits & Rebates
In this guide, we'll cover the latest solar incentives and rebates available in Folsom.
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 Folsom?
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
SMUD - PV Residential Retrofit Buy-Down
Federal Residential Renewable Energy Tax Credit
Source: https://www.dsireusa.org/
The phrase "solar incentives" broadly refers to financial incentives implemented by the government and by solar companies to encourage increased use of renewable energy by making installing and using solar panels more affordable. Solar incentives can include upfront discounts, cash back 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 utility company, county or municipality. Some solar incentives you might qualify for are:
- Tax Credits: Tax credits are dollar-for-dollar reductions that lower the amount of income tax you owe the federal government. (This is different from a tax deduction.)
- Rebates: Rebates, or cash back after a purchase, are typically applied prior to any solar tax credits being calculated. These rebates may be given by your local utility company, by your state or by your county.
- Net Metering: You may be able to sign a net metering agreement with your Folsom utility company that will 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.
- Solar Renewable Energy Certificate (SREC): SRECs and other performance-based incentives are typically handled by your state government. Once your solar system meets the threshold (generally a small amount of energy production), you are eligible to 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.
- Tax Exemptions: These can come in the form of property tax exemptions, which can let you ignore the value added by your solar panels when paying taxes 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 probably think of federal incentives first. The Federal Solar Investment Tax Credit, or ITC, is probably the best-known federal solar incentive. The ITC offers a tax credit for a predetermined percentage of the cost of your solar system.
The ITC covers solar systems installed after January 1, 2006, and allows you to deduct from your taxes a percentage of the total cost of solar panels, accessories, labor and equipment. You can receive this credit for solar panels installed on a primary or secondary residence in the United States that you own. The original amount you could claim was 30% of the total cost, although certain projects may qualify for only 26%, depending on the details. There is no maximum amount you can claim.
Your local Folsom solar panel installer can provide more information about the ITC and how it might apply to your situation.
In August 2022, the ITC (now titled the Clean Energy Credit) was bolstered by the passage of the Inflation Reduction Act. The Clean Energy Credit re-raises the credit up to 30% for solar systems installed between 2022 and 2032. After this, the percentage will see a slight decrease annually until the end of the program in 2035. Starting in 2023, the program expansion will also make credits for energy storage systems even easier to claim.
More information about the new Inflation Reduction Act can be found here. The easiest way to fully understand how the new Clean Energy Credit will apply to you is to get in touch with your local Folsom solar panel installation expert.
State & Local Solar Incentives
Not all solar incentives are federal; rebates, tax credits and more are often offered at the local or state level. Some incentives are ongoing, while others might only be available for a limited time. These incentives might be offered by the California government, or by your county or municipality.
Next Steps for Installing Solar in Folsom
You can apply for solar incentives from the federal government and the California government, as well as from your local utility company. Growing availability of solar initiatives over the last 15 years has helped increase nationwide solar energy use enormously. We suggest talking to your local Folsom solar installer to learn more about these incentives and to make sure that you're getting all the money you can for your solar panels.
EcoWatch's Folsom, CA Solar Incentives FAQs
If I installed solar panels on my house a few years ago, can I still claim incentives?
If your solar panels were installed after January 1, 2022, you may qualify for the newly increased 30% tax credit under the Inflation Reduction Act. If you installed your system between 2006 and 2021, you might qualify for a tax credit between 26% and 30%, depending on the exact installation date. Speaking with the company that installed your system, or any local Folsom solar installer, can help you learn what incentives you qualify for.
What are the highest-rated solar panel installation companies near me?
To find the best solar panel installer in your area, check out our guide to the top solar companies in Folsom.
When does the federal solar tax credit end?
The Clean Energy Credit (previously referred to as 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.
Can I apply for incentives both towards the up-front 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 claiming, they may apply in a different order. Make sure that you speak with your solar installer or a local tax professional to ensure that you are claiming incentives correctly and that you're getting the most money possible.
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