2023 Solar Incentives Guide for Gilroy, CA - Tax Credits & Rebates
In this guide, we'll cover the latest solar incentives and rebates available in Gilroy.
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 Gilroy?
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
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 may be eligible for various kinds of incentives, including discounts, cash back or credit towards your monthly utility bill, depending on your situation. Some incentives come from your specific utility company, county or municipality, some from the state of California and others from the federal government. Some broad categories of solar incentives include:
- Net Metering: Net metering factors in once your solar system is up and running. If you've signed a net metering agreement with your Gilroy utility company, they will subtract the value of the excess energy your solar system produces from your monthly utility bill. In some places, this is a dollar-for-dollar credit, while in others you might be refunded a percentage of the value.
- Tax Credits: Tax credits are dollar-for-dollar reductions in the amount of income tax that you owe the federal government. (This is different from a tax deduction.)
- Rebates: A solar rebate is a partial refund after the purchase of your solar panels. Rebates could be offered by your local utility company, your county or your state. The discount that rebates offer is normally applied to the price of solar panels before tax credits are calculated.
- Solar Renewable Energy Certificate (SREC): SRECs and other performance-based incentives are normally handled at the state level. Once your solar panel system meets a predetermined threshold (typically 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 from the sale is usually considered part of your taxable income.
- Tax Exemptions: Your solar panel system may qualify for exemptions on both sales and property tax. Sales tax exemptions come into effect at the time of purchase. Property tax exemptions allow you to ignore the value that solar panels add when you are calculating property taxes on your home.
Federal Solar Incentives
When thinking about solar incentives, federal incentives are likely the first thing that comes to mind. The Federal Solar Investment Tax Credit, or ITC, is the most well-known federal solar incentive. The ITC provides you with a tax credit for a set percentage of your solar system's cost.
The ITC can be applied to the total cost of installing a solar system, including the panels themselves as well as labor, accessories and equipment. You can claim this credit 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. 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.
Talking to your local Gilroy solar panel installation expert is the best way to learn more about how the ITC may apply to you.
In August 2022, the Inflation Reduction Act laid out new provisions for the ITC, now called the Clean Energy Credit. The Clean Energy Credit has increased the current credit up to 30% for solar installation projects started after January 1, 2022 and completed by the end of 2032. After this, the credit percentage will be reduced slightly each year until the end of the program in 2035. Starting in 2023, the 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. Your local Gilroy solar panel installation expert is the best person to answer your questions regarding the new Clean Energy Credit and how it applies to you.
State & Local Solar Incentives
Some solar incentives are often also provided at the state and local level. Similar to federal incentives, these can include rebates, tax credits and more. These incentives may be distributed by your county or municipality, or by the California government. Some are ongoing, while others are available for a limited time.
Next Steps for Installing Solar in Gilroy
You can qualify for solar incentives from the federal government and the California government, as well as from your local utility company. The increased availability of solar initiatives over the last 15 years has helped greatly increase nationwide adoption of solar energy. We recommend talking to your local Gilroy solar installer for more information about these incentives and to make sure that you're getting the largest number possible for your solar system.
Best Regional Coverage
- Great warranty coverage
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- Concierge service ensures steady communication
- Slightly limited service offerings
- Price-match guarantee
- Sleek, efficient, and durable solar panels
- Best solar battery on the market
- Some reported issues with customer service
- Customer service varies by local dealer
EcoWatch's Gilroy, CA Solar Incentives FAQs
How can I learn if I qualify for specific solar incentives?
It's a good idea to talk to your local Gilroy solar installer for a better understanding of which incentives your project may qualify for. In most cases, solar incentives apply to new solar systems installed on a property you own (in the U.S.) within a specified date range. Some incentives, like those provided at the level of the California government, might have additional requirements.
How much will a solar system save me annually on my electric bill in Gilroy?
On average, homeowners in Gilroy who install solar panels save approximately $1,764.67 per year, or approximately $33,528.72 over 20 years after they make the switch.
What are some environmental benefits of installing solar panels on my house?
You can lower your carbon footprint by 250 pounds of CO2 annually when you install solar panels. This adds up to roughly 5,000 pounds over 20 years. Solar is also a renewable energy source, which means that making the switch reduces the drain on our planet's resources.
I want to trade in my old appliances for ones that are more energy-efficient. Are there any credits I can apply for?
Under the new Inflation Reduction Act, there are a variety of new financial incentives for making eco-friendly improvements to your home. More details on these incentives, including information about incentives for purchasing new appliances, can be found here.
Can I use solar and another type of renewable energy in combination to power my home?
Yes, you can use multiple types of renewable energy to power your home — for example, a combination of geothermal and solar. You can also combine renewable energy generation with a non-renewable backup source of energy. Make sure that you discuss your plan with your local Gilroy solar installation expert, to make sure you know what you'll need and what kinds of incentives you will or won't qualify for.
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.