2023 Solar Incentives Guide for Los Altos, CA - Tax Credits & Rebates
In this guide, we'll cover the latest solar incentives and rebates available in Los Altos.
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 May 04, 2023
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What Solar Tax Credits, Incentives, and Rebates are Available in Los Altos?
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
City of Palo Alto Utilities - Solar Water Heating Program
Single-family residential electricity or propane-displacing systems: $0.54 per kWh displaced
Multifamily and Commercial gas-displacing systems: $14.53 per therm displaced
Multifamily and Commercial electricity or propane-displacing systems: $0.42 per kWh displaced
Low-Income Multifamily gas-displacing systems: $19.23/therm displaced
Low-Income Multifamily Electric or Propane Displacing systems: $0.56/kWh displaced
Federal Residential Renewable Energy Tax Credit
Solar incentives are meant to encourage people to switch to renewable energy by offering financial incentives meant to lower the burden of solar panel installation and use. Various kinds of incentives, such as cash back, discounts or monthly utility bill credits, may be available to you. Certain incentives may be offered by the state of California, by your utility company or by county or municipality, while other incentives are federal. Categories of solar incentives include:
- Rebates: Some solar companies will help you claim a rebate, or partial refund of your purchase, for your solar panels. States or counties will also sometimes offer limited-time rebates. The value of a rebate will usually be deducted from your total price before any tax credits are calculated.
- Tax Credits: Tax credits are dollar-for-dollar reductions in the amount of income tax that you owe the federal government. (A tax credit is different from a tax deduction.)
- Solar Renewable Energy Certificate (SREC): SRECs and similar performance-based incentives might be available to you if the solar system on your home produces over a specified (generally small) amount of electricity. These types of incentives are usually handled by the state government. You can sell the SRECs you receive to your utility company or other buyers, and the money you make is generally considered part of your taxable income.
- Tax Exemptions: Sales tax exemptions are applied at the point of sale for your solar system. Property tax exemptions allow you to ignore the value that your solar panels add when you're calculating how much property tax you need to pay on your house.
- Net Metering: Be sure to talk to your Los Altos utility company about signing a net metering contract. This allows you to get a credit towards your utility bill every month for the value of excess energy generated by your solar panels. You might receive either a dollar-for-dollar credit or a percentage of the value.
Federal Solar Incentives
Federal incentives are the type of incentives that you are most likely to have some knowledge of. You might have heard of the Federal Solar Investment Tax Credit, or ITC. This incentive is a tax credit that reduces your taxes by a specified percentage of the money you spend installing solar panels.
The ITC applies to solar systems installed after January 1, 2006 on a primary or secondary residence that you own in the United States. The credit initially covered 30% of the total cost — for panels, equipment, accessories and labor — although it may range from 26-30%, depending on when your solar project was undertaken. There is no cap on the claim amount.
To best understand how the ITC might apply to you, speak to your local Los Altos solar panel installer and ask for more information.
In August 2022, the ITC (now titled the Clean Energy Credit) was bolstered by the passing of the Inflation Reduction Act. The Clean Energy Credit lasts until 2035. Any solar installation project that is completed between January 1, 2022 and December 31, 2032 may qualify for a 30% tax credit; this amount will then decrease slightly each year until the end of the current program. Beginning in 2023, it will also be easier to get credits for energy storage systems under the new laws.
More information about the new Inflation Reduction Act can be found here. Your local Los Altos solar panel installer can answer any questions you have and explain how the new Clean Energy Credit applies to you.
State & Local Solar Incentives
Some solar incentives are often also provided by state and local governments. As with federal incentives, these might include tax credits, rebates and more. These incentives may be given out by your county or municipality, or by the California government. Certain incentives are available for a limited time, while others are ongoing.
Next Steps for Installing Solar in Los Altos
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 increase solar adoption nationwide. Reaching out to your local Los Altos solar panel installation expert is the best first step towards getting all the incentives you qualify for when you switch to solar energy.
Best Regional Coverage
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- Representatives are experts on local policies
- Concierge service ensures steady communication
- Slightly limited service offerings
Best Warranty Coverage
- Industry-leading warranty coverage
- Expansive service area
- Some reported communication issues
- No leases or PPAs
EcoWatch's Los Altos, CA Solar Incentives FAQs
How can I find out if I qualify for different solar incentives?
It's a good idea to talk to your local Los Altos solar installer to get an understanding of which incentives your project may qualify for. Generally, solar incentives apply to new solar systems installed on 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 additional requirements.
If I already have solar panels, 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 your system was installed between 2006 and 2021, you might qualify for a tax credit between 26% and 30%, depending on the date of installation. Talking to the company that installed your system, or any local Los Altos solar installer, can help you understand what incentives you might want to apply for.
How much will a solar system save me annually on my electric bill in Los Altos?
After adding solar panels to your home in Los Altos, you can anticipate savings of approximately $1,691.78 per year, or approximately $32,143.87 over 20 years.
What are the best solar panel installation companies near me?
To learn about the best solar panel installation companies near you, take a look at our article on the top solar companies in Los Altos.
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 your solar panels. Depending on which incentives you are applying for, they may apply in a different order. Be sure to 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.
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.