2024 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 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 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 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
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
Source: https://www.dsireusa.org/
The term "solar incentives" broadly refers to financial incentives designed to encourage increased use of renewable energy by making solar panels more affordable. You may qualify for several types of incentives, including cash back, discounts or credit towards your monthly utility bill, depending on your situation. Certain incentives come from your specific utility company, county or municipality, some from the California government and others from the federal government. Types of solar incentives might include:
- Rebates: Solar companies may help you claim a rebate, or partial refund after purchase, for your solar system. Counties or states will also sometimes offer limited-time rebates. If you receive a rebate, that amount will usually be deducted from the total price before any tax credits are calculated.
- Net Metering: Net metering becomes relevant once your solar system is up and running. If you have a net metering agreement with your Los Gatos 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 areas you might get refunded a percentage of the value.
- Solar Renewable Energy Certificate (SREC): In general, solar systems that produce more than a specified (usually small) amount of electricity qualify for SRECs or similar performance-based incentives. SRECs and the like are typically provided at the state level. When you receive an SREC, you can sell it to your utility company or another buyer, and generally the money you make is normally considered part of your taxable income.
- Tax Exemptions: These might come in the form of property tax exemptions, which can let you ignore the value added by your solar panels when paying property tax on your house. You may also qualify for an exemption on sales tax at the time of purchase.
- Tax Credits: Tax credits are dollar-for-dollar reductions in the amount of income tax that you owe the government. (This is different from a tax deduction.)
Best National Provider
SunPower
- Most efficient panels on the market
- National coverage
- Cradle to Cradle sustainability certification
- Great warranty coverage
- Expensive
- Customer service varies by local dealer
Best Regional Coverage
Momentum Solar
- Great warranty coverage
- Representatives are experts on local policies
- Concierge service ensures steady communication
- Slightly limited service offerings
Best for Leasing
Sunrun
- Expansive service area
- Many financing options
- Some reported issues with customer service
- Some reported issues with door-to-door sales
Federal Solar Incentives
Federal incentives are the kind of incentives that you are most likely to have some knowledge of. The Federal Solar Investment Tax Credit, or ITC, is likely the most commonly known federal solar incentive. The ITC provides you with a tax credit for a set percentage of the cost of your solar system.
The ITC can be applied to solar systems installed after January 1, 2006, and lets you deduct from your taxes a percentage of the total cost of solar panels, equipment, accessories and labor. You can claim this credit for a solar panel system installed on a primary or secondary residence that you own in the United States. Originally, you could claim 30% of the total cost, although the amount you can claim may range between 26-30%. There is no maximum claim amount.
Speaking with your local Los Gatos solar panel installer is the best way to learn more about how the ITC may apply to you.
The ITC has been renewed and expanded following the passage of the Inflation Reduction Act in August 2022. It's also now called the Clean Energy Credit. The new Clean Energy Credit extends until 2035. You are now eligible for a 30% credit for solar systems installed between January 1, 2022, and December 31, 2032. The credit will then be decreased by a few percentage points every year until it expires. Starting 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 Gatos solar panel company can answer your questions and explain how the new Clean Energy Credit will apply to you.
State & Local Solar Incentives
Some solar incentives are often also provided at the state and local level. As with federal incentives, these can include rebates, tax credits and more. Some incentives are offered for only a limited time, while others are ongoing. Local solar incentives might come from the California government, or from your specific county or municipality.
Next Steps for Installing Solar in Los Gatos
Solar energy use nationwide has increased enormously in the last 15 years, in part due 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. If you're prepared to switch over to solar energy, talking to your local Los Gatos solar panel installation expert is a great first step.
EcoWatch's Los Gatos, CA Solar Incentives FAQs
How much can I save annually on my electric bill if I add solar panels to my house in Los Gatos?
When you add solar panels to your home in Los Gatos, you can expect to save around $1,712.61 per year, or about $32,539.54 over 20 years.
What are the environmental benefits of switching to solar?
You can lower your carbon footprint by 250 pounds of CO2 a year when you install solar panels. This adds up to roughly 5,000 pounds in 20 years. In addition, solar power is a renewable energy source, meaning that switching your home over lessens the drain on our planet's resources.
How long until the federal solar tax credit ends?
The Clean Energy Credit (previously called the federal solar tax credit, or the ITC), currently ends on January 1, 2035. Currently set at 30%, the credit will drop to 26% in 2033 and to 22% in 2034.
Can I use a combination of multiple types of renewable energy to power my home?
Yes, you can use multiple types of renewable energy to power your home, such as a combination of geothermal and solar. You can also use both renewable energy sources and a backup source of non-renewable energy. Make sure that you discuss the details of your plan with your local Los Gatos solar installation expert, to make sure you know what you'll need and what types of incentives you will or won't qualify for.
Can I receive any incentives when I add solar panels to a vacation home, rental property or commercial property?
Many solar incentives apply to a property located within the United States that you own, and most secondary residences fall under this distinction. Other solar incentives may be available for commercial properties, depending on the details. We recommend getting in touch with your local solar installer and/or tax professional to best understand what incentives apply to your specific situation.
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.