2023 Solar Incentives Guide for Monterey, CA - Tax Credits & Rebates

In this guide, we'll cover the latest solar incentives and rebates available in Monterey.

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.
Get a free quote from one of our trusted Monterey solar installers to see how much you can save.

By EcoWatch Local Advisors

Data Analysis: James Savino

Ranking Methodology: Karsten Neumeister

Updated September 15, 2023

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We work with a panel of solar experts to create unbiased reviews that empower you to make the right choice for your home. No other site has covered renewables as long as us, which means we have more data and insider information than other sites. Our rankings are never affected by revenue or partnerships.

What Solar Tax Credits, Incentives, and Rebates are Available in Monterey?

Property Tax Exclusion for Solar Energy Systems and Solar Plus Storage System

Incentive Type:
Property Tax Incentive
100% of system value; 75% of system value exemption for dual-use equipment

Western Riverside Council of Governments - Home Energy Renovation Opportunity (HERO) Financing Program

Incentive Type:
PACE Financing
Eligible products can be financed for up to 25 years, depending on the useful life of the eligible product.
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

Incentive Type:
PACE Financing
Locally determined

Self-Generation Incentive Program

Incentive Type:
Rebate Program
For projects 30 kW or larger, 50% of incentive will be received up-front; 50% will be received based on actual kWh production over the first 5 years. For projects under 30kW, 100% of the incentive will be paid up front.
Incentives will step down over time. See below for incentive amounts.

Renewable Market Adjusting Tariff (ReMAT)

Incentive Type:
Feed-in Tariff

LADWP - Feed-in Tariff (FiT) Program

Incentive Type:
Feed-in Tariff
$0.17/kWh adjusted by a time of delivery multiplier
Base price will step down over time as certain MW goals are met

California Solar Initiative - Solar Thermal Program

Incentive Type:
Rebate Program
Step 1 Incentive Rates (contact utility to determine current incentive levels):
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

Incentive Type:
Personal Tax Credit
30% federal tax credit for systems placed in service after 12/31/2021 and before 01/01/2033. Good for: solar water heat, solar photovoltaics, biomass, geothermal heat pumps, wind (small), fuel cells using renewable fuels.

Source: https://www.dsireusa.org/


Solar incentives help mitigate the cost of installing solar panels on your home. This category of financial incentives is in place to encourage more homeowners to switch to renewable energy. You may qualify for several types of incentives, including cash back, discounts or monthly utility bill credits, depending on your situation. Some incentives come from your specific utility company, county or municipality, some from the state of California and others from the federal government. Some solar incentives you might qualify for are:

  • Tax Exemptions: Your solar system may qualify for both sales tax and property tax exemptions. Sales tax exemptions are applied at the time of purchase. Property tax exemptions let you exclude the value that solar panels add when you are calculating property taxes on your home.
  • Solar Renewable Energy Certificate (SREC): SRECs and similar performance-based incentives are usually handled by your state government. Once your solar panel system meets a certain threshold (usually a small amount of energy production), you can receive SRECs that can be sold to your utility company or other buyers. The money you receive is usually considered part of your taxable income.
  • Net Metering: Don't forget to speak with your Monterey utility company about signing a net metering contract. This will allow you to receive 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.
  • 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 rebates are usually applied before tax credits are calculated.
  • Tax Credits: Tax credits are dollar-for-dollar reductions that lower the amount of income tax you owe the government. (This is different from a tax deduction.)

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Federal Solar Incentives

When you hear the term "solar incentives," federal incentives are likely the first thing that comes to mind. One of the incentives many people are likely familiar with is the Federal Solar Investment Tax Credit (ITC). The ITC is a tax credit for a predetermined percentage of your solar system's cost.

The ITC applies to the value of solar panels 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 costs (panels, accessories, equipment and labor), although this amount has fluctuated over the last few years between 26-30%. The installation date of your solar system will determine what percentage you are eligible for. There is no cap on the claim amount.

To understand exactly how much the ITC could save you, talk to your local Monterey solar panel installation expert.

The Inflation Reduction Act, passed in August 2022, added more provisions to the ITC (as well as retitling it the Clean Energy Credit). For solar systems installed between January 1, 2022 and December 31, 2032, homeowners can apply for a credit equal to 30% of the total cost. The percentage will then decrease annually until the Clean Energy Credit ends in 2035. Beginning in 2023, it will also be easier to obtain credits for energy storage systems under the new laws.

More information about the new Inflation Reduction Act can be found here. The best way to fully understand how the new Clean Energy Credit will apply to you is to get in touch with your local Monterey solar panel installers.

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. Incentives may be handled by the state of California, or by your county or municipality. Some incentives might only be available for a limited time, while others are ongoing.

Next Steps for Installing Solar in Monterey

You can apply for and receive solar incentives from the federal government and the California government, as well as from your local utility company. Growing availability of solar initiatives over the last 15 years has helped greatly increase nationwide adoption of solar energy. When you're prepared to make the switch to solar energy, getting in touch with your local Monterey solar panel installation expert is a great first step.

EcoWatch's Monterey, CA Solar Incentives FAQs

What if I add solar panels to a vacation home, rental property or commercial property? Will I still qualify for incentives?

Many solar incentives apply to a property you own that is located within the United States; most secondary residences will fall under this distinction. There may be other solar incentives available for commercial properties, depending on the specifics. We recommend speaking with your local solar installer and/or tax professional to fully understand what incentives may apply to your specific situation.

How can I find out if I qualify for different solar incentives?

It's a smart idea to get in touch with your local Monterey solar installer for a better understanding of which incentives your project will qualify for. Generally, solar incentives apply to new solar systems installed on property you own (in the U.S.) within a specified date range. Some incentives, such as those offered by the government of California, might have additional requirements.

What are the best solar panel installation companies near me?

To find the best solar panel installation companies near you, take a look at our article on the best solar companies in Monterey.

I want to trade in my old appliances for ones that are more energy-efficient. Are there any credits I can get?

The new Inflation Reduction Act introduces several incentives meant to reward homeowners for making eco-friendly upgrades. Some of these incentives include tax credits and rebates for installing new electric appliances. You can find more details about these incentives here.

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 — for example, a combination of solar and wind power. You can also use both renewable energy sources and a non-renewable backup source of energy. You should discuss the details of your plan with your local Monterey solar panel installer, so that you understand what you'll need and what incentives you may or may 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.

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.

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