2025 Solar Incentives Guide for Novato, CA - Tax Credits & Rebates
In this guide, we'll cover the latest solar incentives and rebates available in Novato.
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 Novato?
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 intended to make renewable energy usage more affordable through financial incentives to help people install solar panels on their homes. Various types of incentives, such as cash back, discounts or credit towards your monthly utility bill, might be available to you. Certain incentives may be handled by the state of California, by your utility company or by county or municipality, while others are federal. Some solar incentives you might qualify for are:
- Rebates: Solar rebates can be offered by your local utility company, or by your state or county. These rebates work as cash back that is applied after your purchase of solar panels and before tax credits are calculated.
- Solar Renewable Energy Certificate (SREC): SRECs and similar performance-based incentives are typically handled at the state level. Once your solar system meets the qualification threshold (typically a small amount of energy production), you are eligible to receive SRECs that can then be sold to your utility company or other buyers. The money you make is generally considered part of your taxable income.
- 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. They may also include exemptions on sales tax at the time of purchase.
- Tax Credits: Tax credits decrease, dollar-for-dollar, the amount of income tax you owe the federal government. Tax credits differ from tax deductions.
- Net Metering: Net metering factors in once your solar panels are up and running. If you have a net metering agreement with your Novato utility company, the company will subtract the value of the excess energy your solar system produces from your monthly utility bill. In some places, this is a dollar-for-dollar credit, while in other areas you may receive a refund equivalent to a percentage of the value.
Federal Solar Incentives
When thinking about solar incentives, you likely think of federal incentives first. 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 applies towards solar systems installed after January 1, 2006, and lets you deduct from your taxes a percentage of the total cost of solar panels, equipment, labor and accessories. You can receive this credit for solar panels installed on a primary or secondary residence that you own in the United States. Originally, you could claim 30% of the total cost, although certain projects may qualify for only 26%, depending on the details. There is no maximum claim amount.
To more fully understand how the ITC will apply to you, contact your local Novato solar panel installer and request more information.
In August 2022, the ITC (now titled the Clean Energy Credit) was expanded and extended by the passage of the Inflation Reduction Act. The Clean Energy Credit runs until 2035. Any solar installation project that is completed between January 1, 2022, and December 31, 2032, may qualify for a 30% tax credit. This amount will be decreased slightly each year until the current program ends. Starting in 2023, it will also be easier to obtain credits for energy storage systems with the new act.
More information about the new Inflation Reduction Act can be found here. Your local Novato solar panel company is the best resource for answering your questions about the new Clean Energy Credit and how it applies to you.
State & Local Solar Incentives
Some solar incentives may be provided at the state and local level. As with federal incentives, these can include tax credits, rebates and more. Incentives may be given by the state of California, or by your county or municipality. Certain incentives are available for only a limited time, while others are ongoing.
Next Steps for Installing Solar in Novato
There are many kinds of solar incentives: those given by the federal government, those provided by the California government and those offered by local utility companies, to name a few. The use of solar energy has grown enormously in the last 15 years, partially due to these incentives. Call your local solar panel installation company today to find out more information and to save the most money possible on a solar system for your Novato home.
EcoWatch's Novato, CA Solar Incentives FAQs
If I already have a solar system installed on my house, can I still claim incentives?
Your best bet is to talk to a representative from the company that installed your solar panels – or speak to a local Novato solar installer — to better understand which incentives you might qualify for. If your system was installed after January 1, 2022, you likely qualify for the newly increased 30% tax credit under the Inflation Reduction Act. Systems installed between 2006 and 2021 may qualify for a tax credit of 26-30%.
How much will a solar system save me on my electric bill in Novato annually?
After adding solar panels to your house in Novato, you can expect to save about $1,671.49 per year, or around $31,758.34 over the next 20 years.
How long until the federal solar tax credit ends?
The federal solar tax credit, previously called the ITC and now named the Clean Energy Credit, is slated to end January 1, 2035. The current 30% credit will end in 2032, replaced by a 26% credit in 2033 and a 22% credit 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 solar and geothermal. You can also combine renewable energy generation with a backup source of non-renewable energy. Make sure that you discuss your plan with your local Novato solar installation expert, to make sure you know what you'll need and what kinds of incentives you will or won't qualify for.
What if I am planning to add solar panels to a rental property, vacation home or commercial property? Will I still qualify for incentives?
While we recommend talking to your local solar installer and/or tax professional to better 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 other incentives available specifically for commercial properties, depending on the specifics.
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