2025 Solar Incentives Guide for Hillsborough, CA - Tax Credits & Rebates
In this guide, we'll cover the latest solar incentives and rebates available in Hillsborough.
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 Hillsborough?
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 designed to mitigate the cost of installing solar panels on your home. These financial incentives are intended to encourage more people to make the switch to renewable energy. Various kinds of incentives, such as discounts, cash back or monthly utility bill credits, may be available to you. Certain incentives may be provided via the California government, by your utility company or by county or municipality, while others are federal. Types of solar incentives might include:
- Rebates: A solar rebate is a partial refund given after you've purchased your solar system. These could 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.
- Solar Renewable Energy Certificate (SREC): In most cases, solar systems that produce over a threshold (normally small) amount of electricity will qualify for SRECs or other performance-based incentives. SRECs and similar incentives are typically offered by your state government. When you receive an SREC, you can sell it to your utility company or another buyer, and this is usually considered part of your taxable income.
- Net Metering: Net metering factors in once your solar system is up and running. If you have a net metering agreement with your Hillsborough utility company, the company will subtract the value of the excess energy your solar system produces from your utility bill each month. In some areas, this credit is dollar-for-dollar, while in other places you might receive a refund equivalent to a percentage of the value.
- Tax Exemptions: Your solar system might qualify for both sales tax and property tax exemptions. Sales tax exemptions come into effect at the time of purchase. Property tax exemptions allow you to exclude the value added by your solar panels when calculating property taxes on your home.
- Tax Credits: Tax credits are dollar-for-dollar reductions (not deductions) in how much in taxes you owe the government.
Federal Solar Incentives
When you hear the term "solar incentives," federal incentives may be the first thing that comes to mind. The Federal Solar Investment Tax Credit, or ITC, is the best-known federal solar incentive. The ITC provides a tax credit for a specific percentage of your solar system's cost.
The ITC applies towards solar systems installed after January 1, 2006, and under this program you can deduct from your taxes a percentage of the total cost of solar panels, labor, accessories and equipment. This credit can apply towards a solar panel system installed on a primary or secondary residence that you own in the United States. The original amount you could claim was 30% of the total cost, although the amount you can claim may range between 26-30%. There is no maximum amount you can claim.
Curious how the ITC might apply to your specific situation? Reach out to your local Hillsborough solar panel installation expert to get more information.
In August 2022, the Inflation Reduction Act laid out new provisions for the ITC, now referred to as 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 equal to 30% of the total cost. The percentage will then decrease annually until the Clean Energy Credit ends in 2035. The expansion to the program also makes it easier to get credit for energy storage systems, beginning in 2023.
Click here to learn more about the new Inflation Reduction Act. The easiest way to learn more about how the new Clean Energy Credit applies to you is to get in touch with your local Hillsborough solar panel company.
State & Local Solar Incentives
Rebates, tax credits and more might be claimed at multiple levels. In addition to federal solar incentives, there are often state and local ones, too. Some incentives are ongoing, while others may only be available for a limited time. Incentives may be offered by the California government, or by your county or municipality.
Next Steps for Installing Solar in Hillsborough
Solar energy use nationwide has significantly increased in the last 15 years, in part thanks to the proliferation of solar incentives. You can obtain these incentives from the California government, the federal government or your local utility company. Speak with your local solar panel installation company today to discover more about the various programs and to save as much money as possible on solar panels for your Hillsborough home.
EcoWatch's Hillsborough, CA Solar Incentives FAQs
If I already have a solar system installed on my house, can I still claim incentives?
If your solar system was installed after January 1, 2022, you may qualify for the recently increased 30% tax credit under the Inflation Reduction Act. If you installed your system between 2006 and 2021, you may qualify for a tax credit between 26% and 30%, depending on the year it was installed. Speaking with the company that installed your system, or any local Hillsborough solar installer, can help you learn more about what incentives you qualify for.
How much will solar panels save me annually on my electric bill in Hillsborough?
Typically, Hillsborough homeowners who install solar panels save approximately $1,716.16 per year, or approximately $32,606.96 over 20 years after they make the switch.
Who installs solar panel systems near me?
To find the top solar panel installers near you, take a look at our article on Hillsborough's best solar panel companies.
Can I use solar and another type of renewable energy in combination to power my home?
Yes, you can employ multiple types of renewable energy to power your home, such as a combination of solar and geothermal. You can also combine renewable energy generation with a backup source of non-renewable energy. You should discuss the details of your plan with your local Hillsborough solar panel installer, to make sure you know what you'll need and what types of incentives you might or might not 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.