2025 Solar Incentives Guide for Palmdale, CA - Tax Credits & Rebates
In this guide, we'll cover the latest solar incentives and rebates available in Palmdale.
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 Palmdale?
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/
The term "solar incentives" refers broadly to financial incentives implemented by the government and by solar companies to encourage the adoption and use renewable energy by making the installation and use of solar panels more affordable. The incentives could include cash back, upfront discounts or monthly credits towards your utility bill. Some incentives are offered by the federal government, some by the California government and some by your specific utility company, county or municipality. Categories of solar incentives include:
- Tax Exemptions: Tax exemptions can come in one of two forms. The first is sales tax exemption, applied when you purchase solar panels. The second is property tax exemption. This allows you to ignore the value added by your solar system when paying property tax on your house.
- Rebates: Solar rebates can be provided by your local utility company, or by your county or state. These rebates work as cash back that is applied after you pay for solar panels and before tax credits are calculated.
- Net Metering: You can sign a net metering contract with your Palmdale utility company. This agreement may apply to all or a percentage of the excess electricity your solar panels generate. Your utility company will then subtract this value from your monthly utility bill.
- Tax Credits: Tax credits are dollar-for-dollar reductions (not deductions) in how much income tax you owe the federal government.
- Solar Renewable Energy Certificate (SREC): SRECs and other performance-based incentives are typically handled at the state level. Once your solar panel system meets a predetermined threshold (normally 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 receive from the sale is generally considered part of your taxable income.
Federal Solar Incentives
When someone says "solar incentives," you likely think of federal incentives first. The Federal Solar Investment Tax Credit, or ITC, is the best-known federal solar incentive. The ITC provides you with a tax credit for a set percentage of your solar system's cost.
The ITC initially applied to 30% of the cost of solar system installation, although it has fluctuated slightly over the last few years between 26-30%. The percentage you qualify for will depend on when your solar system was installed. The total installation cost includes the panels themselves as well as the cost of accessories, equipment and labor. There is no maximum amount you can claim. The ITC applies to solar systems installed after January 1, 2006, on your primary or secondary residence. The residence must be owned by you and in the United States.
Your local Palmdale solar panel installation expert can provide you with more information about the ITC and how it may apply to your situation.
The ITC was both renewed and expanded by the passage of the Inflation Reduction Act in August 2022. It's also now called the Clean Energy Credit. Homeowners are now eligible for a credit of 30% of the total solar system installation costs for projects started after January 1, 2022, and completed before the end of 2032. The credit percentage will then decrease on a yearly basis until the Clean Energy Credit expires in 2035. Starting in 2023, the expansion will also make claiming credit for energy storage systems easier than ever before.
Click here to learn more about the new Inflation Reduction Act. Your local Palmdale solar panel company can answer any questions you have and explain how the new Clean Energy Credit will apply to you.
State & Local Solar Incentives
Some solar incentives may be offered at the local or state level. Similar to federal incentives, these could include tax credits, rebates and more. Certain incentives are ongoing, while others may only be available for a limited time. Solar incentives might be given by the California government, or by your county or municipality.
Next Steps for Installing Solar in Palmdale
Solar incentives can come from the federal government, the California government or your local utility company. The growing number of available solar incentives has contributed to a large increase in solar energy use in the last 15 years. Getting in touch with your local Palmdale solar panel installation expert is the right first step towards getting all the incentives you qualify for when you switch to solar energy.
EcoWatch's Palmdale, CA Solar Incentives FAQs
How can I learn if I qualify for certain solar incentives?
It's a smart idea to get in touch with your local Palmdale solar installer for a better understanding of which incentives your project will qualify for. In most cases, solar incentives apply to new solar panel systems installed on a property you own (in the U.S.) between the dates specified by the incentive. Some incentives, such as those offered by the government of California, might have additional requirements.
I already have solar panels installed. Do I qualify for any incentives?
If your solar panels were installed after January 1, 2022, you may qualify for the recently increased 30% tax credit under the Inflation Reduction Act. If you installed your system between 2006 and 2021, you may qualify for a tax credit between 26% and 30%, depending on the date of installation. Talking to the company that installed your system, or any local Palmdale solar installer, can help you learn what incentives you can apply for.
What are the highest-rated solar panel installation companies near me?
To find a top-rated solar panel installer, check out our guide to the best solar companies in Palmdale.
If I switch my appliances out for ones that can utilize solar energy, are there any credits that I can claim?
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 multiple types 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. Be sure to discuss your ideas with your local Palmdale solar installation expert. They can help you with the plan for your project and give you an understanding of various incentives that 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.