2023 Solar Incentives Guide for Redwood City, CA - Tax Credits & Rebates
In this guide, we'll cover the latest solar incentives and rebates available in Redwood City.
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.
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Updated May 04, 2023
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What Solar Tax Credits, Incentives, and Rebates are Available in Redwood City?
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 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
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 phrase "solar incentives" refers broadly to financial incentives implemented by the government and by solar companies to encourage the use of renewable energy by making the installation and use of solar panels more affordable. You may be eligible for various kinds of incentives, such as cash back, discounts or monthly utility bill credits, 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. Categories of solar incentives include:
- Solar Renewable Energy Certificate (SREC): SRECs and similar other performance-based incentives might be available to you if your solar system produces more than a specified (typically small) amount of electricity. Performance-based incentives are generally handled by the state government. You can sell any SRECs you have to your utility company or other buyers, and the money you make is typically considered part of your taxable income.
- Tax Exemptions: Tax exemptions may come in two forms. The first is sales tax exemption, applied at the time you purchase your solar panels. The second is property tax exemption, which allows you to ignore the added value of your solar system when paying property tax on your home.
- Net Metering: Net metering becomes relevant after your solar panels are up and running. If you have in place a net metering agreement with your Redwood City utility company, it will subtract the value of the excess energy your solar system produces from your utility bill each month. In some places, this credit is dollar-for-dollar, while in other places you may make back a percentage of the value.
- Rebates: Rebates, or partial refunds after a purchase, are normally given before any solar tax credits are calculated. Rebates may be provided by your local utility company, by your county or by your state.
- Tax Credits: Tax credits decrease, dollar-for-dollar, how much income tax you owe the federal government. These differ from tax deductions.
Federal Solar Incentives
Federal solar incentives are probably the first thing that you think of when you think about solar incentives. The Federal Solar Investment Tax Credit, or ITC, is the most well-known federal solar incentive. The ITC allows you to claim a tax credit for a set percentage of your solar system's cost.
The ITC covers 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. You can claim this credit for solar panels installed on a primary or secondary residence in the United States that you own. Originally, you could claim 30% of the total cost, although the amount you can claim may range between 26-30%. There is no maximum claim amount.
To know exactly how much the ITC could save you, contact your local Redwood City solar panel installation expert.
In August 2022, the ITC (now called the Clean Energy Credit) was expanded and extended by the passing of the Inflation Reduction Act. The new Clean Energy Credit extends until 2035. You can now receive a 30% credit for solar systems installed between January 1, 2022 and December 31, 2032. This credit will then decrease annually until its expiration. Starting in 2023, the program expansion will also make it easier to get credit for energy storage systems.
More information about the new Inflation Reduction Act can be found here. Your local Redwood City 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
Rebates, tax credits and more might be claimed at multiple levels. In addition to federal solar incentives, there are often state and local ones as well. Incentives might be offered by your county or municipality, or by the state of California. Certain incentives are available for only a limited time, while others are ongoing.
Next Steps for Installing Solar in Redwood City
Solar incentives might come from the California government, the federal government or your local utility company. The large number of available solar incentives has contributed to a large increase in solar energy use in the last 15 years. Your local Redwood City solar panel installation expert can help you learn more about which incentives you may qualify for, and get you on track to switch to renewable energy today.
Best Regional Coverage
Momentum Solar
- Great warranty coverage
- Representatives are experts on local policies
- Concierge service ensures steady communication
- Slightly limited service offerings
Best Warranty Coverage
Sunpro Solar
- Industry-leading warranty coverage
- Expansive service area
- Some reported communication issues
- No leases or PPAs
EcoWatch's Redwood City, CA Solar Incentives FAQs
Can I get any financial incentives when I add solar panels to a vacation home, rental property or commercial property?
Many solar incentives apply to a property located within the United States that you own, and most secondary residences fall into this category. Other solar incentives may be available for commercial properties, depending on the details. We recommend getting in touch with your local solar installer and/or tax professional to fully understand what incentives apply to your specific situation.
How do I know if I qualify for specific solar incentives?
Generally, solar incentives apply to:
- a new solar panel system
- installed on property that you own
- within the U.S.
- within the date range specified by a particular incentive.
Specific incentives, including those given out by the California government or by your county/municipality, may have additional qualifications. Talk to your local Redwood City solar installer to learn more about what incentives your project will qualify for.
How much can I save on my electric bill annually if I add solar panels to my Redwood City home?
On average, Redwood City homeowners who install solar panels save around $1,716.16 per year, or around $32,606.96 over 20 years after making the switch.
What are the best solar panel installation companies near me?
To find the best solar panel installers near you, take a look at our article on the top solar companies in Redwood City.
When does the federal solar tax credit end?
The federal solar tax credit, formerly called the ITC and now called the Clean Energy Credit, is set 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.
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.