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

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

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 Pasadena solar installers to see how much you can save.

By EcoWatch Local Advisors

Data Analysis: James Savino

Ranking Methodology: Karsten Neumeister

Updated September 15, 2023

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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 Pasadena?

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/


The phrase "solar incentives" refers broadly to financial incentives designed to encourage the adoption and use renewable energy by making installing and using solar panels more affordable. The incentives can include upfront discounts, cash back or credit towards your monthly utility bill. Some incentives are offered by the federal government, some by the California government and some by your utility company, county or municipality. Categories of solar incentives include:

  • Net Metering: Make sure you speak to your Pasadena utility company about signing a net metering agreement. This will allow you to receive credit towards your monthly utility bill for the value of excess energy your solar panels generate. You may receive either a dollar-for-dollar credit or a percentage of the value.
  • 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 performance-based incentives. SRECs and similar incentives are typically offered by your state government. SRECs can be sold to your utility company or another buyer, and generally the money you make is normally considered part of your taxable income.
  • Tax Credits: These credits are dollar-for-dollar reductions (not deductions) in the amount of tax that you owe the federal government.
  • Tax Exemptions: Your solar panel system may qualify for both sales tax and property tax exemptions. Sales tax exemptions come into effect at the time of purchase. Property tax exemptions allow you to ignore the added value of the solar panels when you are calculating property taxes on your home.
  • Rebates: Rebates, or partial refunds after a purchase, are normally given prior to any solar tax credits being calculated. These rebates can be offered by your local utility company, by your county or by your state.

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Federal Solar Incentives

Federal solar incentives are probably the first thing that comes to mind when you think about solar incentives. The solar incentive that you may be most familiar with is the Federal Solar Investment Tax Credit (ITC), which provides a credit on your taxes equal to a predetermined percentage of your solar system's cost.

The ITC applies towards solar systems installed after January 1, 2006 and under this program you can deduct from your taxes a percentage of the total cost of solar panels, labor, accessories and equipment. This credit can be claimed on a solar panel system installed on a primary or secondary residence in the United States that you own. The original claim amount was 30% of the total cost, although the amount you can claim may range between 26-30%. There is no maximum claim amount.

Your local Pasadena solar panel installer can give you more information about the ITC and how it may apply to your situation.

In August 2022, the ITC (now referred to as the Clean Energy Credit) was expanded and extended by the passing of the Inflation Reduction Act. The new Clean Energy Credit is valid until 2035. American homeowners can now apply for a 30% credit for solar systems that began installation on or after January 1, 2022 and will be done by December 31, 2032. This credit will then decrease annually until its expiration. Starting in 2023, the expansion will also make it easier to get credit for energy storage systems.

Click here to learn more about the new Inflation Reduction Act. The best way to learn more about how the new Clean Energy Credit might apply to you is to reach out to your local Pasadena solar panel company with your questions.

State & Local Solar Incentives

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

Next Steps for Installing Solar in Pasadena

Solar energy use nationwide has gone up significantly in the past 15 years, in part due to the increase in availability of solar incentives. You can obtain these incentives from the California government, the federal government or your local utility company. We suggest talking to your local Pasadena solar installer to learn more about these incentives and to make sure that you're getting the most money possible for your solar system.

EcoWatch's Pasadena, CA Solar Incentives FAQs

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

When you add solar panels to your Pasadena home, you can anticipate savings of approximately $1,569.47 per year, or approximately $29,819.94 over the next 20 years.

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

To learn about the top solar panel installers near you, read our article on the best solar companies in Pasadena.

When does the federal solar tax credit end?

The federal solar tax credit, formerly known as the ITC and now named the Clean Energy Credit, is scheduled to end on January 1, 2035. The current 30% credit will end in 2032, replaced by a 26% credit in 2033 and a 22% credit in 2034.

I want to switch my appliances out for ones that are more energy-efficient. Are there any benefits I can claim?

The recently passed Inflation Reduction Act provides several incentives that 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.

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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