2025 Solar Incentives Guide for San Rafael, CA - Tax Credits & Rebates
In this guide, we'll cover the latest solar incentives and rebates available in San Rafael.
You'll learn about:
- Local & State Solar Incentives
- Federal Tax Credits (Updated for 2024 and beyond)
- Ways to optimize your solar investment
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What Solar Tax Credits, Incentives, and Rebates are Available in San Rafael?
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 designed to make renewable energy usage more affordable through financial incentives for individuals who install solar panels on their homes. Incentives may include things like discounts, cash back or credit on your utility bill each month. Some incentives are provided by the federal government, while others are provided by the state of California or your utility company, county or municipality. Categories of solar incentives include:
- Net Metering: Make sure you speak with your San Rafael utility company about signing a net metering contract. This will allow you to get a credit towards your monthly utility bill for the value of excess energy generated by your solar panels. You may receive either a dollar-for-dollar credit or a percentage of the value.
- Solar Renewable Energy Certificate (SREC): SRECs and other performance-based incentives may be available to you if your solar system produces over a specified (usually small) amount of electricity. Performance-based incentives are usually handled by the state government. You can sell SRECs to your utility company or other buyers, and the money you receive in return is usually considered part of your taxable income.
- Tax Exemptions: Tax exemptions can come in two forms. First, there is sales tax exemption, applied when you purchase solar panels. The second is property tax exemption, which allows you to ignore the value added by your solar system when paying property tax on your home.
- Rebates: Rebates, or cash back after a purchase, are normally given before any solar tax credits are calculated. Solar rebates may be given by your local utility company, by your county or by your state.
- Tax Credits: Tax credits are dollar-for-dollar reductions that lower the amount of income tax you owe the government. (This is different from a tax deduction.)
Federal Solar Incentives
When you think about solar incentives, you probably think of federal incentives first. The Federal Solar Investment Tax Credit, or ITC, is the most well-known federal solar incentive. The ITC provides you with a tax credit for a predetermined percentage of your solar system's cost.
The ITC can be credited towards the value of a solar system installed on your primary or secondary residence in the United States. The solar panels have to have been installed on a property you own after January 1, 2006, for you to be eligible for the credit. The ITC originally paid out 30% of all installation costs (panels, accessories, equipment and labor), although the covered amount has fluctuated slightly over the last few years between 26-30%. The amount you qualify for will depend on when your solar system was installed. There is no cap on the claim amount.
Your local San Rafael solar panel installer can provide you with more information about the ITC and how it applies to your situation.
The ITC was both renewed and expanded by the passage of the Inflation Reduction Act in August 2022. It's also now called the Clean Energy Credit. The Clean Energy Credit re-raises the credit up to 30% for solar installation projects started after January 1, 2022, and completed by the end of 2032. After this, the percentage will decrease slightly each year until the program expires in 2035. Beginning in 2023, it will also be easier to qualify for credits for energy storage systems with the new act.
Click here to learn more about the new Inflation Reduction Act. To best understand how the new Clean Energy Credit applies to you, talk to your local San Rafael solar installation company.
State & Local Solar Incentives
Some solar incentives are often also offered at the local or state level. Similar to federal incentives, these can include rebates, tax credits and more. These incentives might be offered by the California government, or by your county or municipality. Certain incentives are available for a limited time, while others are ongoing.
Next Steps for Installing Solar in San Rafael
Solar incentives may be offered by your local utility company, the California government or the federal government. The growing number of available solar incentives has helped nationwide use of solar energy increase greatly in the last 15 years. Talking to your local San Rafael solar panel installation expert is a great first step towards getting the most money possible when you switch to solar energy.
EcoWatch's San Rafael, CA Solar Incentives FAQs
I already have solar panels. Are there any incentives that I qualify for?
If your solar system was installed after January 1, 2022, you may qualify for the recently 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 exact installation date. Talking to the company that installed your system, or any local San Rafael solar installer, can help you learn more about what incentives you qualify for.
Who installs solar panels near me?
To learn about the best solar panel installers near you, read our article on San Rafael's best solar panel companies.
If I trade in my appliances for ones that utilize solar energy, are there benefits I can claim?
The recently passed Inflation Reduction Act provides multiple incentives that reward homeowners for making eco-friendly upgrades. Some incentives include rebates and tax credits for installing new electric appliances. You can find more details about these incentives here.
Can I apply for incentives both towards the initial cost of solar panels, and later as reimbursement?
Yes, you can receive both tax credits and rebates towards the cost of solar panels. Depending on precisely which incentives you are eligible for, they may apply in a different order. Be sure to speak with your solar installer or a local tax professional to confirm that you are claiming the correct incentives and getting the most money possible.
What if I am planning to add solar panels to a rental property, vacation home or commercial property? Will I still qualify for incentives?
While we recommend talking to your local solar installer and/or tax professional to fully understand what solar incentives apply to you, many will apply to a second home, so long as that home is in the United States and owned by you. There may be additional incentives available for commercial properties specifically, depending on the specifics.
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