2025 Solar Incentives Guide for Napa, CA - Tax Credits & Rebates
In this guide, we'll cover the latest solar incentives and rebates available in Napa.
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 Napa?
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
Federal Residential Renewable Energy Tax Credit
Source: https://www.dsireusa.org/
Solar incentives are designed to mitigate the cost of installing a solar panel system on your home. These financial incentives are designed to encourage more people to make the switch to renewable energy. Different kinds of incentives, such as discounts, cash back or monthly utility bill credits, might be available to you. Certain incentives may be offered by the California government, by your utility company or by county or municipality, while other incentives are federal. Types of solar incentives might include:
- Net Metering: Be sure to talk with your Napa utility company about signing a net metering contract. This will allow you to get a credit towards your utility bill every month for the value of excess energy your solar panels generate. You might receive either a dollar-for-dollar credit or a percentage of the value.
- Tax Credits: Tax credits are dollar-for-dollar reductions that lower the amount of income tax you owe the government. (A tax credit is different from a tax deduction.)
- Solar Renewable Energy Certificate (SREC): Generally, solar systems that produce more than a predetermined (usually small) amount of electricity will qualify for SRECs or other similar performance-based incentives. SRECs and similar incentives are typically provided by your state government. When you receive an SREC, you can sell it to your utility company or another buyer, and this is usually considered part of your taxable income.
- Rebates: Solar rebates might be offered by your county or state, or by your local utility company. These rebates work as partial refunds that are applied after you pay for a solar system and before tax credits are calculated.
- Tax Exemptions: These could come in the form of property tax exemptions, which can let you ignore 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.
Federal Solar Incentives
When thinking about solar incentives, you probably think of federal incentives first. 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 given 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 system must have been installed after January 1, 2006, on a property you own for you to claim the credit. The ITC originally paid out 30% of all system costs (panels, labor, accessories and equipment), although the covered amount has fluctuated over time between 26-30%. The amount you qualify for will depend on when your solar system was installed. There is no cap on the amount you can claim.
To best understand how the ITC could apply to you, contact your local Napa solar panel installer and ask for more information.
The Inflation Reduction Act, passed in August 2022, added more provisions to the ITC (as well as renaming it to the Clean Energy Credit). Homeowners can now receive a credit of 30% of the total costs of solar system installation for projects started after January 1, 2022, and completed before the end of 2032. The percentage will then decrease yearly until the Clean Energy Credit expires in 2035. The program expansion also makes credits for energy storage systems even easier to claim, starting in 2023.
Click here to learn more about the new Inflation Reduction Act. Your local Napa solar panel installation expert is the best person to answer your questions about the new Clean Energy Credit and how it will apply to you.
State & Local Solar Incentives
Not all solar incentives are federal; rebates, tax credits and more are often offered at the state and local level. These solar incentives — which might be given by the state of California, or by your county or municipality — could be offered on an ongoing basis, or for only a limited time.
Next Steps for Installing Solar in Napa
The nationwide use of solar energy has gone up tremendously in the last 15 years, in part due to the proliferation of solar incentives. You can obtain these incentives from the California government, the federal government or your local utility company. Your local Napa solar panel installer can provide you with more details about which incentives you should apply for, and get you started on the path to switching to renewable energy today.
EcoWatch's Napa, CA Solar Incentives FAQs
I already have solar panels installed. Are there any incentives that I qualify for?
If your solar panels were installed after January 1, 2022, you may qualify for the newly increased 30% tax credit under the Inflation Reduction Act. If you had your system installed between 2006 and 2021, you may qualify for a tax credit between 26% and 30%, depending on the date of installation. Speaking with a representative from the company that installed your solar system, or any local Napa solar installer, can help you learn more about what incentives you qualify for.
How much will solar panels save me on my electric bill in Napa annually?
Once you add solar panels to your Napa home, you can expect to save approximately $1,723.39 per year, or approximately $32,744.48 over the next 20 years.
What are some environmental benefits of adding solar panels to my house?
You can reduce your carbon footprint by 250 pounds of CO2 a year when you switch to solar panels. This adds up to roughly 5,000 pounds over 20 years. In addition, solar power is a renewable energy source, which means that switching your home over reduces the drain on our planet's resources.
How long until the federal solar tax credit ends?
The Clean Energy Credit (previously referred to as the federal solar tax credit, or the 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.
I want to trade in my old appliances for ones that are more energy-efficient. Are there any credits I can apply for?
The new Inflation Reduction Act includes provisions for several incentives that reward homeowners for making 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.
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