2023 Solar Incentives Guide for Los Gatos, CA - Tax Credits & Rebates
In this guide, we'll cover the latest solar incentives and rebates available in Los Gatos.
You'll learn about:
- Local & State Solar Incentives
- Federal Tax Credits (Updated for 2023 and beyond)
- Ways to optimize your solar investment
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What Solar Tax Credits, Incentives, and Rebates are Available in Los Gatos?
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 designed to mitigate the cost of installing solar panels on your home. These financial incentives are intended to encourage more Americans to convert their home partially or fully to renewable energy. Different kinds of incentives, such as cash back, discounts or monthly utility bill credits, might be available to you. Certain incentives may be handled by the California government, by your utility company or by county or municipality, while others are federal. You might qualify for any of the following types of solar incentives:
- Solar Renewable Energy Certificate (SREC): SRECs and other similar performance-based incentives are usually handled at the state level. Once your solar panel system meets the threshold (typically 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 receive from the sale is usually considered part of your taxable income.
- Rebates: Your solar installer might help you claim a rebate, or partial refund of your purchase, for your solar system. States or counties will also offer limited-time rebates at various times. The value of a rebate will usually be deducted from the total price before any tax credits are calculated.
- Tax Credits: Tax credits decrease, dollar-for-dollar, how much income tax you owe the federal government. These are different from tax deductions.
- Tax Exemptions: These might come in the form of property tax exemptions, which let you exclude the value of your solar system when calculating the taxes you pay on your home. You may also qualify for an exemption on sales tax at the time of purchase.
- Net Metering: Be sure to speak to your Los Gatos utility company about signing a net metering agreement. This allows you to receive credit towards your monthly utility bill 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
When thinking about solar incentives, federal incentives may be the first thing that comes to mind. The Federal Solar Investment Tax Credit, or ITC, is probably the most well-known federal solar incentive. The ITC provides a tax credit for a set percentage of the cost of your solar system.
The ITC covers 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, equipment, labor and accessories. You can claim this credit for solar panels 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 certain projects may qualify for only 26%, depending on the details. There is no maximum amount you can claim.
To best understand how the ITC could apply to your situation, reach out to your local Los Gatos solar panel installation expert and ask for more information.
In August 2022, the Inflation Reduction Act made revisions to the ITC, now called the Clean Energy Credit. The Clean Energy Credit bolsters the current credit, increasing it up to 30% for solar installation projects started after January 1, 2022 and completed by the end of 2032. After 2032, the percentage will decrease slightly each year until the end of the program 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. Your local Los Gatos solar panel installation expert is the best person to answer your questions regarding the new Clean Energy Credit and how it may apply to you.
State & Local Solar Incentives
In addition to federal solar incentives, there are often also state ones. Rebates, tax credits and more can be offered at a more local level. These solar incentives — which might be handled by your county or municipality, or by the state of California — may be offered for only a limited time, or on an ongoing basis.
Next Steps for Installing Solar in Los Gatos
Solar energy use nationwide has gone up tremendously in the past 15 years, in part thanks to the proliferation of solar incentives. You can obtain these incentives from your local utility company, the California government or the federal government. Contact your local solar panel installation expert today to find out more information and to save the most money possible on solar panels for your Los Gatos home.
EcoWatch's Los Gatos, CA Solar Incentives FAQs
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