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

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

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 Sacramento solar installers to see how much you can save.

By EcoWatch Local Advisors

Data Analysis: James Savino

Ranking Methodology: Karsten Neumeister

Updated January 20, 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 Sacramento?

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

SMUD - PV Residential Retrofit Buy-Down

Incentive Type:
Rebate Program

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/


Solar incentives are meant to help mitigate the cost of installing solar panels on your home. These financial incentives are intended to encourage more people to make the switch to renewable energy. You might be eligible for various kinds of incentives, such as discounts, cash back 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. Some broad categories of solar incentives include:

  • Rebates: Solar rebates might be provided by your local utility company, or by your county or state. These rebates work as partial refunds that are applied after you purchase solar panels and before tax credits are calculated.
  • Tax Credits: Tax credits lower, dollar-for-dollar, how much income tax you owe the federal government. Tax credits differ from tax deductions.
  • Solar Renewable Energy Certificate (SREC): SRECs and other performance-based incentives are generally handled by your state government. Once your solar system meets the qualification 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.
  • Tax Exemptions: These can come in the form of property tax exemptions, which let you exclude the value added by your solar panels when paying property tax on your house. They may also include exemptions on sales tax at the time of purchase.
  • Net Metering: Net metering factors in once your solar system is up and running. If you have a net metering agreement with your Sacramento utility company, the company 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 areas you might receive a refund equivalent to a percentage of the value.

Federal Solar Incentives

When thinking about solar incentives, you probably think of federal incentives first. One of the incentives that most people are probably familiar with is the Federal Solar Investment Tax Credit (ITC). The ITC is a tax credit for a specific 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, accessories, labor and equipment. You can receive this credit for solar panels installed on a primary or secondary residence that you own in the United States. 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 amount you can claim.

To know exactly how much money the ITC could save you, get in touch with your local Sacramento solar panel installer.

In August 2022, the Inflation Reduction Act laid out new provisions for the ITC, now dubbed the Clean Energy Credit. The Clean Energy Credit is valid until 2035. Any solar installation project that is completed between January 1, 2022 and December 31, 2032 may qualify for a 30% tax credit. The amount will be decreased slightly each year until the current program ends. Beginning in 2023, it will also be easier to claim credits for energy storage systems under this new program.

Click here to learn more about the new Inflation Reduction Act. Your local Sacramento solar panel company can answer your questions and explain how the new Clean Energy Credit may apply to you.

State & Local Solar Incentives

Tax credits, rebates and more can be provided at multiple levels. Along with federal solar incentives, there are often state and local ones, too. Some incentives are ongoing, while others are available for a limited time. Solar incentives may be provided by your county or municipality, or by the California government.

Next Steps for Installing Solar in Sacramento

The nationwide use of solar energy has increased enormously in the last 15 years, in part due to the increase in availability of solar incentives. You can obtain these incentives from your local utility company, the California government or the federal government. Reaching out to your local Sacramento solar panel installation expert is a great first step towards making sure you get all the incentives you qualify for when you switch to solar energy.

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EcoWatch's Sacramento, CA Solar Incentives FAQs

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

Generally, homeowners in Sacramento who install solar panels save approximately $1,470.21 per year, or approximately $27,933.92 over 20 years after making the switch.

What are the best solar panel installation companies near me?

To find the best solar panel installation companies near you, take a look at our article on Sacramento's best solar panel companies.

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

With the passage of the new Inflation Reduction Act, there are a number of new financial incentives for making eco-friendly improvements to your home. More details on these incentives, including information about incentives for purchasing new appliances, can be found here.

Can I claim incentives both towards the up-front cost of solar panels, and later as reimbursement?

The order your incentives will be applied in may vary depending on which incentives you are claiming but in most cases yes, you can claim multiple types of incentives for your solar project. Talk with your solar installer or a local tax professional to verify you are claiming all the incentives you are eligible for and applying them in the correct order.

Can I use multiple types of renewable energy to power my home?

Yes, you can utilize multiple types of renewable energy to power your home — for example, a combination of geothermal and solar. You can also use both renewable energy sources and a backup source of non-renewable energy. Be sure to discuss the details of your plan with your local Sacramento solar panel installer, to make sure you know what you'll need and what incentives you might or might 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.

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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