2025 Solar Incentives Guide for Mill Valley, CA - Tax Credits & Rebates
In this guide, we'll cover the latest solar incentives and rebates available in Mill Valley.
You'll learn about:
- Local & State Solar Incentives
- Federal Tax Credits (Updated for 2024 and beyond)
- Ways to optimize your solar investment
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What Solar Tax Credits, Incentives, and Rebates are Available in Mill Valley?
Property Tax Exclusion for Solar Energy Systems and Solar Plus Storage System
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 make renewable energy usage more affordable via financial incentives to help people install solar panels on their homes. Incentives might include things like discounts, cash back or credit on your utility bill each month. Some incentives are offered federally, while others are offered by the California government or by your utility company, county or municipality. Types of solar incentives might include:
- Rebates: Solar rebates can be provided by your state or county, or by your local utility company. These rebates work as partial refunds that are applied after you purchase a solar system and before tax credits are calculated.
- Tax Credits: Tax credits are dollar-for-dollar reductions (not deductions) in the amount of tax that you owe the federal government.
- Solar Renewable Energy Certificate (SREC): SRECs and similar other performance-based incentives might be available to you if your solar system produces over a specified (usually small) amount of electricity. These types of incentives are usually handled at the state level. You can sell your SRECs to your utility company or other buyers, and the money you receive in return is normally considered part of your taxable income.
- Net Metering: Make sure you speak to your Mill Valley utility company about signing a net metering contract. This allows you to receive credit towards your monthly utility bill for the value of excess energy generated by your solar panels. You may receive either a dollar-for-dollar credit or a percentage of the value.
- Tax Exemptions: Your solar panel system may qualify for both sales tax and property tax exemptions. Sales tax exemptions are applied at the time of purchase. Property tax exemptions allow you to ignore the value that solar panels add when calculating property taxes on your house.
Federal Solar Incentives
Federal incentives are the type of incentives that you are most likely to have heard of. The solar incentive that you may be most familiar with is the Federal Solar Investment Tax Credit (ITC), which gives you a credit on your taxes equal to a predetermined percentage of the cost of your solar system.
The ITC applies to a solar system installed on your primary or secondary residence in the United States. The solar panels have to have been installed on a property you own after January 1, 2006, for you to be eligible for the credit. The ITC originally paid out 30% of all installation costs (panels, equipment, accessories and labor), although the covered amount has fluctuated slightly over the last few years between 26-30%. The amount you qualify for will depend on when your solar system was installed. There is no cap on the claim amount.
Contacting your local Mill Valley solar panel installation expert is the best way to learn more about how the ITC could apply to you.
In August 2022, the ITC (now titled the Clean Energy Credit) was bolstered by the passage of the Inflation Reduction Act. The new Clean Energy Credit is valid until 2035. Homeowners can now receive a 30% credit for solar systems that began installation after January 1, 2022, and are completed by the end of 2032. The total credit will then decrease annually until it expires. Starting in 2023, the expansion will also make it easier to get credit for energy storage systems.
More information about the new Inflation Reduction Act can be found here. Your local Mill Valley solar panel installation experts 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 by state and local governments. Similar to federal incentives, these may include rebates, tax credits and more. Certain incentives are offered for only a limited time, while others are ongoing. These local incentives could come from your county or municipality, or from the California government.
Next Steps for Installing Solar in Mill Valley
There are many kinds of solar incentives: those given by local utility companies, those provided by the federal government and those provided by the California government, to name a few. Solar energy use has increased tremendously in the last 15 years, partially due to these incentives. Speak with your local solar panel installer today to learn more and to save the most money possible on solar panels for your Mill Valley home.
EcoWatch's Mill Valley, CA Solar Incentives FAQs
How can I learn if I qualify for solar incentives?
Typically, solar incentives apply to:
- a new solar system
- installed on property you own
- within the U.S.
- within the date range specified by a particular incentive.
Specific incentives, including those given out by the California government or by your county/municipality, could have additional qualifications. Speak with your local Mill Valley solar installer to learn more about what incentives your project will qualify for.
How long until the federal solar tax credit ends?
The Clean Energy Credit (previously called the federal solar tax credit, or ITC), is scheduled to end on January 1, 2035. Currently set at 30%, the credit will drop to 26% in 2033 and to 22% in 2034.
Can I claim incentives both towards the initial cost of solar panels, and later as reimbursement?
The order that incentives will be applied in might vary depending on which incentives you receive but in most cases yes, you can claim multiple types of incentives for your solar project. Get in touch with your solar installer or a local tax professional to confirm you are claiming all possible incentives and applying them in the correct order.
What if I am planning to add a solar system to a rental property, vacation home or commercial property? Do I still qualify for incentives?
While we recommend speaking with your local solar installer and/or tax professional to best understand what solar incentives apply to you, many apply to a second home, so long as that home is in the United States and owned by you. There may be additional incentives available specifically for commercial properties, depending on the details.
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