2025 Solar Incentives Guide for Palos Verdes Estates, CA - Tax Credits & Rebates
In this guide, we'll cover the latest solar incentives and rebates available in Palos Verdes Estates.
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 Palos Verdes Estates?
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" generally refers to financial incentives that are in place to encourage the use of renewable energy by making solar panels more affordable. You may qualify for several kinds of incentives, such as cash back, discounts or credit towards your monthly utility bill, 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 broad categories of solar incentives include:
- Rebates: Your solar installer might help you claim a rebate, or partial refund after purchase, for your solar system. States or counties will also sometimes offer limited-time rebates. Any rebates you receive will usually come off your total price before any tax credits are calculated.
- Net Metering: Net metering becomes relevant once your solar panels are up and running. If you have a net metering agreement with your Palos Verdes Estates utility company, they will subtract the value of the excess energy produced by your solar system from your utility bill each month. In some areas, this is a dollar-for-dollar credit, while in other areas you might make back a percentage of the value.
- Tax Exemptions: Sales tax exemptions go into effect at the point of sale for your solar panels. Property tax exemptions allow you to exclude the added value of your solar system when you calculate how much property tax you need to pay.
- Solar Renewable Energy Certificate (SREC): SRECs are credits that can be sold to your utility company (or other buyers) for money that typically becomes part of your taxable income. Generally, you must meet a certain (small) threshold of energy production before your solar system qualifies for SRECs or similar performance-based incentives. Incentives like these are normally handled at the state level.
- Tax Credits: Tax credits reduce, dollar-for-dollar, how much income tax you owe the federal government. Tax credits differ from tax deductions.
Federal Solar Incentives
Federal incentives are the kind of incentives that you are most likely to have some familiarity with. The solar incentive that you may be most familiar with is the Federal Solar Investment Tax Credit (ITC), which gives you a credit on your taxes equal to a predetermined percentage of the cost of your solar system.
The ITC initially applied to 30% of the total cost of installing solar panels, although that number 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 cost of installation includes the panels themselves as well as the cost of accessories, labor and equipment. There is no maximum claim amount. The ITC can be applied 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.
To best understand how the ITC may apply to your situation, speak to your local Palos Verdes Estates solar panel installation expert and request more information.
The Inflation Reduction Act, passed in August 2022, expanded and extended the ITC (as well as retitling it the Clean Energy Credit). The Clean Energy Credit is valid until 2035. Your solar installation project undertaken between 2022 and 2032 may qualify for a 30% tax credit. The amount will decrease slightly each year until the current program ends. The expansion also makes credits for energy storage systems even easier to claim, starting in 2023.
More information about the new Inflation Reduction Act can be found here. To understand how the new Clean Energy Credit applies to you, get in touch with your local Palos Verdes Estates solar installation company.
State & Local Solar Incentives
Some solar incentives may be offered at the local or state level. Similar to federal incentives, these could include rebates, tax credits and more. Some incentives are ongoing, while others may only be available for a limited time. Solar incentives may be offered by your county or municipality, or by the California government.
Next Steps for Installing Solar in Palos Verdes Estates
The expanding number of solar incentives available has contributed greatly to the increase in the use of solar power nationwide over the past 15 years. You may receive solar incentives from the federal government, the California government or from your local utility company. Talking to your local Palos Verdes Estates solar panel installation expert is an excellent first step towards getting the most money possible when you switch to solar energy.
EcoWatch's Palos Verdes Estates, CA Solar Incentives FAQs
How much will solar panels save me on my electric bill in Palos Verdes Estates annually?
Once you add solar panels to your house in Palos Verdes Estates, you can anticipate savings of around $1,317.57 per year, or about $25,033.85 over 20 years.
What are some of the environmental benefits of switching to solar energy?
Solar energy is renewable — by switching where you get your energy, you can help lessen the strain on our planet's resources. A solar system can also lower your home's CO2 emissions by 250 pounds annually, or around 5,000 pounds over 20 years.
When does the federal solar tax credit end?
The Clean Energy Credit (formerly named the federal solar tax credit, or the ITC), currently ends on January 1, 2035. Currently set at 30%, the credit will drop to 26% in 2033 and to 22% in 2034.
Can I use 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 wind power. You can also combine renewable energy generation with a non-renewable backup source of energy. You should discuss your proposed plan with your local Palos Verdes Estates solar panel installer, to make sure you know what you'll need and what kinds of incentives you might or might not qualify for.
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