2025 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. Categories of solar incentives include:
- Rebates: Solar rebates might be offered by your local utility company, or by your county or state. These rebates work as partial refunds that are applied after your purchase of solar panels and before tax credits are calculated.
- Tax Exemptions: Sales tax exemptions go into effect at the point of sale for your solar system. Property tax exemptions let you exclude the added value of your solar system when calculating how much property tax you need to pay on your home.
- 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, the company will subtract the value of the excess energy produced by your solar system from your monthly utility bill. In some areas, this credit is dollar-for-dollar, while in other places you may receive a refund equivalent to 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 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 it may range from 26-30%, depending on when your solar system was installed. There is no cap on the claim amount.
Have questions about how the ITC applies to your specific situation? Contact your local San Luis Obispo solar panel installer to get more information.
The ITC was renewed and increased in scope after the passage of the Inflation Reduction Act in August 2022. It's also now called the Clean Energy Credit. The Clean Energy Credit lasts until 2035. Any solar installation project that is completed between January 1, 2022, and December 31, 2032, may qualify for a 30% tax credit. This amount will be decreased slightly each year until the end of the current program. The expansion to the program also makes claiming credit for energy storage systems easier than ever before, beginning in 2023.
More information about the new Inflation Reduction Act can be found here. Your local San Luis Obispo solar panel installation expert is the best person to answer your questions about the new Clean Energy Credit and how it applies to you.
State & Local Solar Incentives
Tax credits, rebates and more can be claimed at multiple levels. On top of federal solar incentives, there are often state and local ones as well. Some incentives are ongoing, while others may only be available for a limited time. Incentives may be provided by the California government, or by your county or municipality.
Next Steps for Installing Solar in San Luis Obispo
The variety of available solar incentives has helped tremendously increase the use of solar power nationwide over the past 15 years. You may receive solar incentives from the California government, the federal government or your local utility company. Contact your local solar panel installation company today to learn more and to save the most money possible on solar panels for your San Luis Obispo home.
EcoWatch's San Luis Obispo, CA Solar Incentives FAQs
How can I find out if I qualify for 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 will qualify for. Generally, solar incentives apply to new solar 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 other requirements.
My home already has solar panels installed. Does my system qualify for any incentives?
Your best bet is to talk to the company that installed your solar panels – or call a local San Luis Obispo solar installer — to better understand which incentives you may qualify for. If your solar panels were installed after January 1, 2022, you likely qualify for the newly increased 30% tax credit under the Inflation Reduction Act. Solar panels installed between 2006 and 2021 may qualify for a tax credit of 26-30%.
Who installs solar panels near me?
To learn about the best solar panel installation companies near you, take a look at our article on the top solar companies in San Luis Obispo.
What if I want to add solar panels to a rental property, vacation home or commercial property? Will I still qualify for incentives?
Many solar incentives apply to a property located within the United States that you own; most secondary residences will fall under this distinction. Other solar incentives may be available for commercial properties, depending on the details. We recommend reaching out to your local solar installer and/or tax professional to best understand what incentives may 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.