2025 Solar Incentives Guide for Foster City, CA - Tax Credits & Rebates
In this guide, we'll cover the latest solar incentives and rebates available in Foster City.
You'll learn about:
- Local & State Solar Incentives
- Federal Tax Credits (Updated for 2024 and beyond)
- Ways to optimize your solar investment
Solar installers are experts in maximizing your solar tax credits and rebates.
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What Solar Tax Credits, Incentives, and Rebates are Available in Foster City?
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" covers a range of financial incentives implemented to make installing and using solar panels more affordable. This is done to encourage people to switch to renewable energy. Incentives could include things like discounts, cash back or credit on your utility bill each month. Some incentives are provided by the federal government, while others are provided by the California government or your specific utility company, county or municipality. Categories of solar incentives include:
- Tax Exemptions: Tax exemptions may come in one of two forms. The first is sales tax exemption, which is applied at the time you purchase your solar panels. The second is property tax exemption. This allows you to ignore the added value of your solar system when calculating property tax for your home.
- Solar Renewable Energy Certificate (SREC): SRECs and other performance-based incentives are typically handled by your state government. Once your solar system meets a certain threshold (normally a small amount of energy production), you can receive SRECs that you can then sell to your utility company or other buyers. The money you make is generally considered part of your taxable income.
- Tax Credits: Tax credits reduce, dollar-for-dollar, how much income tax you owe the federal government. Tax credits differ from tax deductions.
- Rebates: Your solar installer might help you claim a rebate, or partial refund after purchase, for your solar panels. States or counties will also offer limited-time rebates at various times. If you receive a rebate, that amount will usually be deducted from your total price before any tax credits are calculated.
- Net Metering: Make sure you talk with your Foster City utility company about signing a net metering agreement. This will allow you to receive credit towards your utility bill every month for the value of excess energy your solar panels generate. You might receive either a dollar-for-dollar credit or a percentage of the value.
Federal Solar Incentives
When you hear the term "solar incentives," federal incentives are likely the first thing that comes to mind. The solar incentive that you may be most familiar with is 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 applies 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, accessories, equipment and labor – although it may range from 26-30%, depending on the installation date of your solar system. There is no cap on the amount you can claim.
Reaching out to your local Foster City solar panel installer is the best way to understand how the ITC could apply to you.
The ITC was both renewed and expanded by the passage of the Inflation Reduction Act in August 2022. It's also now called the Clean Energy Credit. For solar system installations that begin after January 1, 2022, and are completed by the end of 2032, homeowners can receive a credit for 30% of the total cost. After 2033, the percentage will decrease annually until the Clean Energy Credit ends in 2035. Beginning in 2023, it will also be easier to obtain credits for energy storage systems under this new program.
More information about the new Inflation Reduction Act can be found here. Your local Foster City solar panel company is the best resource for answering your questions regarding the new Clean Energy Credit and how it applies to you.
State & Local Solar Incentives
Some solar incentives may be provided by state and local governments. As with federal incentives, these may include rebates, tax credits and more. These incentives might be given out by the California government, or by your county or municipality. Some are ongoing, while others are available for a limited time.
Next Steps for Installing Solar in Foster City
Solar energy use nationwide has gone up significantly in the last 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. We suggest talking to your local Foster City solar installation expert to learn more about these incentives and to ensure that you're getting the most money possible for your solar system.
EcoWatch's Foster City, CA Solar Incentives FAQs
Who installs solar panel systems near me?
To find a top-rated solar panel installer, check out our guide to Foster City's top solar panel companies.
What are some environmental benefits of adding solar panels to my home?
Solar energy is renewable — by switching where you get your energy, you help reduce the strain on our planet's resources. A solar system can also reduce your home's CO2 emissions by 250 pounds annually, or around 5,000 pounds over 20 years.
Can I claim incentives both towards the up-front cost of solar panels, and later as reimbursement?
Yes, you can claim both tax credits and rebates towards the cost of your solar panels. Depending on which incentives you are claiming, they may apply in a different order. Be sure to talk to your solar installer or a local tax professional to confirm that you are claiming the correct incentives and getting the most money you can.
What if I want to add a solar system to a rental property, vacation home or commercial property? Can I still qualify for incentives?
Many solar incentives apply to a property you own that is located within the United States, and most secondary residences will fall under this distinction. There may be other solar incentives available for commercial properties, depending on the specifics. We recommend getting in touch with your local solar installer and/or tax professional to better understand what incentives apply to your specific situation.
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