2024 Solar Incentives Guide for San Luis Obispo, CA - Tax Credits & Rebates
In this guide, we'll cover the latest solar incentives and rebates available in San Luis Obispo.
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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What Solar Tax Credits, Incentives, and Rebates are Available in San Luis Obispo?
Property Tax Exclusion for Solar Energy Systems and Solar Plus Storage System
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/
Solar incentives are intended to make renewable energy usage more affordable through financial incentives for those who install solar panels on their homes. You might be eligible for various kinds of incentives, such as cash back, discounts or monthly utility bill credits, depending on your situation. Certain incentives come from your specific utility company, county or municipality, some from the state of California and others from the federal government. Types of solar incentives might include:
- Rebates: Rebates, or partial refunds after a purchase, are normally given prior to any solar tax credits being calculated. Solar rebates may be given by your local utility company, by your county or by your state.
- Tax Exemptions: Tax exemptions may come in one of two forms. The first is sales tax exemption, which is applied when you purchase solar panels. The second is property tax exemption. This allows you to ignore the added value of your solar system when calculating property tax for your house.
- Tax Credits: Tax credits are dollar-for-dollar reductions in the amount of income tax that you owe the federal government. (A tax credit is different from a tax deduction.)
- Net Metering: Net metering becomes relevant after your solar system is up and running. If you have a net metering agreement with your San Luis Obispo utility company, they will subtract the value of the excess energy your solar system produces from your monthly utility bill. In some areas, this is a dollar-for-dollar credit, while in other areas you might make back a percentage of the value.
- Solar Renewable Energy Certificate (SREC): Typically, solar systems that produce more than a specified (generally small) amount of electricity will qualify for SRECs or other similar performance-based incentives. SRECs and similar incentives are typically given at the state level. When you receive an SREC, you can sell it to your utility company or another buyer, and this is usually considered part of your taxable income.
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 incentives are the kind of incentives that you are most likely to have some knowledge of. You've likely heard of the Federal Solar Investment Tax Credit, or ITC. This incentive is a tax credit that reduces your taxes by a predetermined percentage of the money you spend on your solar system.
The ITC can be applied to solar systems installed after January 1, 2006, on a primary or secondary residence that you own in the United States. The credit initially covered 30% of the total cost – for panels, accessories, labor and equipment – although that amount may range from 26-30%, depending on the installation date of your solar system. There is no cap on the amount you can claim.
Wondering how the ITC applies to your specific situation? Contact your local San Luis Obispo 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). For solar systems installed between January 1, 2022, and December 31, 2032, homeowners can apply for a credit equal to 30% of the total cost. The percentage will then decrease annually until the Clean Energy Credit ends in 2035. The expansion also makes it easier to get credit for energy storage systems, starting in 2023.
Click here to learn more about the new Inflation Reduction Act. The easiest way to understand how the new Clean Energy Credit will apply to you is to speak with your local San Luis Obispo solar panel installers directly.
State & Local Solar Incentives
Some solar incentives are often also provided at the state and local level. Similar to federal incentives, these can include rebates, tax credits and more. These incentives — which may be provided by your county or municipality, or by the state of California — may be offered for only a limited time, or on an ongoing basis.
Next Steps for Installing Solar in San Luis Obispo
Nationwide solar energy use has gone up significantly in the last 15 years, in part thanks to the proliferation of solar incentives. You can obtain these incentives from your local utility company, the federal government or the California government. We recommend talking to your local San Luis Obispo solar installation expert to learn more about these incentives and to be sure that you're getting all the money you can for your solar system.
EcoWatch's San Luis Obispo, CA Solar Incentives FAQs
How do I learn if I qualify for specific solar incentives?
It's a good idea to talk to your local San Luis Obispo solar installer for a better understanding of which incentives your project may qualify for. In most cases, solar incentives apply to new solar panel systems installed on property you own (in the U.S.) between the dates specified by the incentive. Some incentives, such as those provided at the level of the California government, may have additional requirements.
If I already have solar panels, can I still claim incentives?
You should plan to talk to a representative from the company that installed your solar system – or speak to a local San Luis Obispo solar installer — to clarify which incentives you might qualify for. If your solar panels were installed after January 1, 2022, you likely qualify for the recently increased 30% tax credit under the Inflation Reduction Act. Solar systems installed between 2006 and 2021 may qualify for a tax credit of 26-30%.
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 top solar companies in San Luis Obispo.
Can I receive any incentives when I add solar panels to a rental property, vacation home or commercial property?
Many solar incentives apply to a property you own that is located within the United States; most secondary residences will fall under this distinction. Other solar incentives may be available for commercial properties, depending on the details. We recommend speaking with your local solar installer and/or tax professional to fully understand what incentives will apply to your specific situation.
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.