2023 Solar Incentives Guide for Santa Clara, CA - Tax Credits & Rebates
In this guide, we'll cover the latest solar incentives and rebates available in Santa Clara.
You'll learn about:
- Local & State Solar Incentives
- Federal Tax Credits (Updated for 2023 and beyond)
- Ways to optimize your solar investment
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By EcoWatch Local Advisors
Data Analysis: James Savino
Ranking Methodology: Karsten Neumeister
Updated March 14, 2023
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What Solar Tax Credits, Incentives, and Rebates are Available in Santa Clara?
Property Tax Exclusion for Solar Energy Systems and Solar Plus Storage System
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.
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
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
Santa Clara Water & Sewer - Solar Water Heating Program
Federal Residential Renewable Energy Tax Credit
Solar incentives are designed to make renewable energy usage more affordable via financial incentives for individuals who install solar panels on their homes. Different kinds of incentives, such as cash back, discounts or monthly utility bill credits, may be available to you. Certain incentives may be offered by the California government, by your utility company or by county or municipality, while other incentives are federal. Some broad categories of solar incentives include:
- Solar Renewable Energy Certificate (SREC): In general, solar systems that produce more than a specified (usually small) amount of electricity can qualify for SRECs or similar performance-based incentives. SRECs and similar incentives are typically given at the state level. You can sell SRECs to your utility company or another buyer, and generally the money you make is normally considered part of your taxable income.
- Tax Credits: These credits are dollar-for-dollar reductions (not deductions) in how much income tax you owe the government.
- Tax Exemptions: These might come in the form of property tax exemptions, which let you ignore the value added by your solar panels when calculating the taxes you pay on your house. You could also look for exemptions on sales tax at the time of purchase.
- Net Metering: You may be able to sign a net metering contract with your Santa Clara utility company, that may apply to all or a percentage of the excess electricity that is generated by your solar panels. They will then subtract this value from your utility bill each month.
- Rebates: Rebates, or cash back after a purchase, are usually applied before any solar tax credits are calculated. Rebates might be offered by your local utility company, by your state or by your county.
Federal Solar Incentives
Federal solar incentives are probably the first thing that you think of when thinking about solar incentives. The solar incentive that you're most familiar with is probably the Federal Solar Investment Tax Credit (ITC), which provides a credit on your taxes equal to 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 system must have been installed on a property you own after January 1, 2006 for you to be eligible for the credit. Originally, the ITC covered 30% of all system installation costs (panels, equipment, labor and accessories), although this amount has fluctuated over the last few years 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.
Curious how the ITC might apply to your specific situation? Contact your local Santa Clara solar panel installer to get more information.
The ITC has been renewed and expanded following the passage of the Inflation Reduction Act in August 2022. It's also now called the Clean Energy Credit. For solar system installations that begin after January 1, 2022 and are completed by the end of 2032, homeowners may be eligible for a credit equal to 30% of the total cost. After 2033, the percentage will decrease annually until the Clean Energy Credit ends in 2035. Starting in 2023, the program expansion will also make credits for energy storage systems even easier to claim.
More information about the new Inflation Reduction Act can be found here. To fully understand how the new Clean Energy Credit applies to you, reach out to your local Santa Clara solar installation expert.
State & Local Solar Incentives
There are often state solar incentives available in addition to federal ones. Tax credits, rebates and more may be available at a more local level. Some incentives are ongoing, while others are only available for a limited time. They may be offered by your county or municipality, or by the California government.
Next Steps for Installing Solar in Santa Clara
You can apply for and receive solar incentives from the California government and the federal government, as well as from your local utility company. The growing availability of solar initiatives in the past 15 years has helped greatly increase nationwide adoption of solar energy. Your local Santa Clara solar panel installer can give you more information about which incentives you can apply for, and get you on track to switch to renewable energy today.
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EcoWatch's Santa Clara, CA Solar Incentives FAQs
If my house already has solar panels, can I still claim incentives?
An excellent idea would be to talk to the company that installed your system — or call a local Santa Clara solar installer — to better understand which incentives you might qualify for. If your system was installed after January 1, 2022, you likely qualify for the newly 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%.
How much will a solar system save me on my electric bill in Santa Clara annually?
On average, homeowners in Santa Clara who install solar panels save about $1,577.52 per year, or about $29,972.80 over 20 years after they make the switch.
Who installs solar panels near me?
To find a top-rated solar panel installer, check out our guide to Santa Clara's best solar panel companies.
When does the federal solar tax credit end?
The federal solar tax credit, previously called the ITC and now named the Clean Energy Credit, is scheduled to end January 1, 2035. The current 30% credit will end in 2032, replaced by a 26% credit in 2033 and a 22% credit in 2034.
If I change out my appliances for ones that can utilize solar energy, are there incentives I can claim?
The recently passed Inflation Reduction Act provides multiple incentives meant to reward homeowners who make eco-friendly upgrades. Some of these incentives include rebates and tax credits for installing new electric appliances. You can find more details about these incentives 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.