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

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

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 Morgan Hill solar installers to see how much you can save.

By EcoWatch Local Advisors

Data Analysis: James Savino

Ranking Methodology: Karsten Neumeister

Updated January 20, 2023

Why you can trust EcoWatch

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 Morgan Hill?

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 are meant to encourage homeowners to switch to renewable energy by providing financial incentives that lower the burden of solar panel installation and use. Incentives might include things like discounts, cash back or credit towards your monthly utility bill. Some incentives are offered federally, while others are handled by the state of California or your specific utility company, county or municipality. Some broad categories of solar incentives include:

  • Rebates: Solar companies may help you claim a rebate, or partial refund after purchase, for your solar panels. States or counties will also offer limited-time rebates at various times. If you receive a rebate, that amount will usually be deducted from the total price before tax credits are calculated.
  • Tax Exemptions: Your solar panel system may qualify for both sales tax and property tax exemptions. Sales tax exemptions are effective at the time of purchase. Property tax exemptions allow you to exclude the value that solar panels add when calculating property taxes on your house.
  • Solar Renewable Energy Certificate (SREC): In most cases, solar systems that produce more than a specified (normally small) amount of electricity will qualify for SRECs or other performance-based incentives. SRECs and the like are typically offered by your state government. You can sell SRECs to your utility company or another buyer, and generally the money you make is normally considered part of your taxable income.
  • Net Metering: You may be able to sign a net metering agreement with your Morgan Hill utility company, that may apply to all or a percentage of the excess electricity that is generated by your solar panels. They will then deduct this value from your utility bill each month.
  • Tax Credits: Tax credits are dollar-for-dollar reductions that lower the amount of income tax you owe the federal government. (A tax credit is different from a tax deduction.)

Federal Solar Incentives

Federal incentives are the type of incentives that you are most likely to have some familiarity with. A federal incentive many people are likely familiar with is the Federal Solar Investment Tax Credit (ITC). The ITC is a tax credit for a given percentage of the cost of your solar system.

The ITC applies to the value of solar panels installed on your primary or secondary residence in the United States. The solar system must have been installed on a property you own after January 1, 2006 for you to be eligible for the credit. Originally, the ITC covered 30% of all system installation costs (panels, labor, accessories and equipment), 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.

To best understand how the ITC could apply to your situation, speak to your local Morgan Hill solar panel installer and request more information.

In August 2022, the ITC (now called the Clean Energy Credit) was bolstered by the passage of the Inflation Reduction Act. With the new provisions, solar installation projects that are completed between 2022 and 2032 might qualify for a 30% tax credit. The amount of the credit will then decrease slightly each year until the current Clean Energy Credit expires in 2035. Starting in 2023, the expansion to the program will also make claiming credit for energy storage systems easier than ever before.

Click here to learn more about the new Inflation Reduction Act. To better understand how the new Clean Energy Credit applies to you, get in touch with your local Morgan Hill solar installation company.

State & Local Solar Incentives

There are more than just federal solar incentives; tax credits, rebates and more are often offered at the local or state level. Some incentives are ongoing, while others may only be available for a limited time. These incentives might be provided by your county or municipality, or by the California government.

Next Steps for Installing Solar in Morgan Hill

Nationwide solar energy use has significantly increased in the past 15 years, in part thanks to the growth in the number of solar incentives. You may get these incentives from your local utility company, the federal government or the California government. Call your local solar panel installer today to learn more and to save as much money as possible on solar panels for your Morgan Hill home.

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EcoWatch's Morgan Hill, CA Solar Incentives FAQs

Can I claim incentives for adding solar panels to a rental property, vacation home or commercial property?

Many solar incentives are intended to apply to a property located within the United States that you own, and most secondary residences fall into this category. Other solar incentives may be available for commercial properties, depending on the details. We recommend speaking with your local solar installer and/or tax professional to better understand what incentives apply to your specific situation.

How much will solar panels save me annually on my electric bill in Morgan Hill?

Generally, Morgan Hill homeowners who install solar panels save about $1,764.67 per year, or about $33,528.72 over 20 years after they make the switch.

What are the highest-rated solar panel installation companies near me?

To find the top solar panel installation companies near you, take a look at our article on Morgan Hill's top solar panel companies.

If I change out my appliances for ones that utilize solar energy, are there any incentives that I can claim?

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

Can I use a combination of solar and another type of renewable energy to power my home?

You can use multiple types of renewable energy, or a combination of renewable and non-renewable energy, to power your home. Make sure you talk through your ideas with your local Morgan Hill solar installation expert. They can help you plan your project and educate you on the various incentives that you might or might 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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