2024 Solar Incentives Guide for San Francisco, CA - Tax Credits & Rebates
In this guide, we'll cover the latest solar incentives and rebates available in San Francisco.
You'll learn about:
- Local & State Solar Incentives
- Federal Tax Credits (Updated for 2024 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 February 03, 2024
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What Solar Tax Credits, Incentives, and Rebates are Available in San Francisco?
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.
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
LADWP - Feed-in Tariff (FiT) Program
Base price will step down over time as certain MW goals are met
Self-Generation Incentive Program
Incentives will step down over time. See below for incentive amounts.
Property Tax Exclusion for Solar Energy Systems and Solar Plus Storage System
Local Option - Municipal Energy Districts
Renewable Market Adjusting Tariff (ReMAT)
Federal Residential Renewable Energy Tax Credit
Source: https://www.dsireusa.org/
The term "solar incentives" covers a range of financial incentives put in place to make installing and using solar panels more affordable. This is done to encourage people to switch to renewable energy. Incentives may include things like discounts, cash back or credit towards your monthly utility bill. Some incentives are offered federally, while others are handled by the California government or your specific utility company, county or municipality. Categories of solar incentives include:
- Tax Credits: Tax credits are dollar-for-dollar reductions that lower the amount of income tax you owe the federal government. (This is different from a tax deduction.)
- Net Metering: Net metering is an incentive you can get after your solar panels are up and running. If you have in place a net metering agreement with your San Francisco utility company, the company will subtract the value of the excess energy your solar system produces from your monthly utility bill. In some areas, this credit is dollar-for-dollar, while in other areas you might receive a refund equivalent to a percentage of the value.
- Solar Renewable Energy Certificate (SREC): SRECs and similar performance-based incentives are typically handled by your state government. Once your solar system meets a certain threshold (normally a small amount of energy production), you can receive SRECs that can then be sold to your utility company or other buyers. The money you receive is generally considered part of your taxable income.
- Tax Exemptions: Your solar 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 exclude the value that solar panels add when calculating property taxes on your house.
- Rebates: A solar rebate is a partial refund given after you've purchased your solar system. These may be offered by your local utility company, your state or your county. The cash back that you get from the rebates is normally applied before tax credits are calculated.
Best National Provider
SunPower
- Most efficient panels on the market
- National coverage
- Cradle to Cradle sustainability certification
- Great warranty coverage
- Expensive
- Customer service varies by local dealer
Best Regional Coverage
Momentum Solar
- Great warranty coverage
- Representatives are experts on local policies
- Concierge service ensures steady communication
- Slightly limited service offerings
Best for Leasing
Sunrun
- Expansive service area
- Many financing options
- Some reported issues with customer service
- Some reported issues with door-to-door sales
Federal Solar Incentives
Federal solar incentives are likely to be the first thing that comes to mind when thinking about solar incentives. You've likely heard of the Federal Solar Investment Tax Credit, or ITC. This is a tax credit that reduces your taxes by a certain percentage of the money you spend installing solar panels.
The ITC applies to the value of a solar system installed on your primary or secondary residence in the United States. The solar panels must have been installed after January 1, 2006, on a property owned by you for you to be eligible for the credit. The ITC originally paid out 30% of all system installation costs (panels, labor, accessories and equipment), although the covered amount has fluctuated over time between 26-30%. The installation date of your solar system will determine what percentage you are eligible for. There is no cap on the claim amount.
Have questions about how the ITC applies to your specific situation? Reach out to your local San Francisco solar panel installer to get more information.
The Inflation Reduction Act, passed in August 2022, expanded and extended the ITC (as well as retitling it the Clean Energy Credit). Under the new program, solar installation projects begun after January 1, 2022, and finished by December 31, 2032, might qualify for a 30% tax credit. This percentage will then decrease slightly each year until the current Clean Energy Credit expires in 2035. Starting in 2023, the program expansion will also make it easier to get credit for energy storage systems.
Click here to learn more about the new Inflation Reduction Act. To understand how the new Clean Energy Credit will apply to you, speak with your local San Francisco solar installation company.
State & Local Solar Incentives
Federal solar incentives are not your only option; rebates, tax credits and more are often offered at the local or state level. These incentives might be distributed by your county or municipality, or by the California government. Some incentives may be available for a limited time, while others are ongoing.
Next Steps for Installing Solar in San Francisco
The variety of available solar incentives has helped tremendously increase the adoption of solar energy nationwide over the past 15 years. You may receive solar incentives from your local utility company, the California government or the federal government. It is a good idea to talk to your local San Francisco solar installer to learn more about these incentives and to be sure that you're getting all the money you can for your solar panels.
EcoWatch's San Francisco, CA Solar Incentives FAQs
How do I learn if I qualify for specific solar incentives?
Typically, solar incentives apply to:
- a new solar system
- installed on a property that you own
- within the U.S.
- between the dates specified by a particular incentive.
Specific incentives, including ones handled by the California government or by your county/municipality, sometimes have additional qualifications. Get in touch with your local San Francisco solar installer to discover what incentives your project will qualify for.
If my house already has solar panels, can I still claim incentives?
If your solar system was installed after January 1, 2022, you may qualify for the newly increased 30% tax credit under the Inflation Reduction Act. If you installed your system between 2006 and 2021, you might qualify for a tax credit between 26% and 30%, depending on the date of installation. Speaking with the company that installed your solar system, or any local San Francisco solar installer, can help you learn what incentives you qualify for.
What are the highest-rated solar panel installation companies near me?
To find the top solar panel installation companies near you, read our article on the best solar companies in San Francisco.
I want to change out my appliances for ones that are more energy-efficient. Are there any incentives I can claim?
The new Inflation Reduction Act creates several new financial incentives for making eco-friendly improvements to your home. More details regarding these incentives, including information about incentives for purchasing new appliances, can be found 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.