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

Solar installers are experts in maximizing your solar tax credits and rebates.
Get a free quote from one of our trusted Santa Clara solar installers to see how much you can save.

By EcoWatch Local Advisors

Data Analysis: James Savino

Ranking Methodology: Karsten Neumeister

Updated September 15, 2023

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We work with a panel of solar experts to create unbiased reviews that empower you to make the right choice for your home. No other site has covered renewables as long as us, which means we have more data and insider information than other sites. Our rankings are never affected by revenue or partnerships.

What Solar Tax Credits, Incentives, and Rebates are Available in Santa Clara?

Property Tax Exclusion for Solar Energy Systems and Solar Plus Storage System

Incentive Type:
Property Tax Incentive
100% of system value; 75% of system value exemption for dual-use equipment

Western Riverside Council of Governments - Home Energy Renovation Opportunity (HERO) Financing Program

Incentive Type:
PACE Financing
Eligible products can be financed for up to 25 years, depending on the useful life of the eligible product.
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

Incentive Type:
PACE Financing
Locally determined

Self-Generation Incentive Program

Incentive Type:
Rebate Program
For projects 30 kW or larger, 50% of incentive will be received up-front; 50% will be received based on actual kWh production over the first 5 years. For projects under 30kW, 100% of the incentive will be paid up front.
Incentives will step down over time. See below for incentive amounts.

Renewable Market Adjusting Tariff (ReMAT)

Incentive Type:
Feed-in Tariff

LADWP - Feed-in Tariff (FiT) Program

Incentive Type:
Feed-in Tariff
$0.17/kWh adjusted by a time of delivery multiplier
Base price will step down over time as certain MW goals are met

California Solar Initiative - Solar Thermal Program

Incentive Type:
Rebate Program
Step 1 Incentive Rates (contact utility to determine current incentive levels):
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

Santa Clara Water & Sewer - Solar Water Heating Program

Incentive Type:
Leasing Program

Federal Residential Renewable Energy Tax Credit

Incentive Type:
Personal Tax Credit
30% federal tax credit for systems placed in service after 12/31/2021 and before 01/01/2033. Good for: solar water heat, solar photovoltaics, biomass, geothermal heat pumps, wind (small), fuel cells using renewable fuels.

Source: https://www.dsireusa.org/


Solar incentives mitigate the cost of installing solar panels on your home. This category of financial incentives is designed to encourage more Americans to make the switch to renewable energy. You may qualify for several types of incentives, including cash back, discounts or credit towards your monthly utility bill, depending on your situation. Certain incentives come from your specific utility company, county or municipality, some from the California government and others from the federal government. Categories of solar incentives include:

  • Solar Renewable Energy Certificate (SREC): Typically, solar systems that produce over a specific (usually small) amount of electricity can qualify for SRECs or other similar performance-based incentives. SRECs and performance-based incentives in general are typically provided by your state government. When you receive an SREC, you can sell it to your utility company or another buyer, and the money you receive is normally considered part of your taxable income.
  • Tax Exemptions: Tax exemptions can come in two forms. First, there is sales tax exemption, applied at the time you purchase your solar panels. The second is property tax exemption. This allows you to ignore the value added by your solar system when calculating property tax for your house.
  • Rebates: Rebates, or cash back after a purchase, are typically given before any solar tax credits are calculated. Solar rebates might be provided by your local utility company, by your state or by your county.
  • Net Metering: Net metering factors in once your solar system is up and running. If you've signed a net metering agreement with your Santa Clara utility company, it will subtract the value of the excess energy produced by your solar system from your utility bill each month. In some areas, this is a dollar-for-dollar credit, while in others you may get refunded a percentage of the value.
  • Tax Credits: These credits are dollar-for-dollar reductions (not deductions) in how much in taxes you owe the government.

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Federal Solar Incentives

Federal solar incentives are likely the first thing that you think of when you think about solar incentives. The Federal Solar Investment Tax Credit, or ITC, is the best-known federal solar incentive. The ITC provides you with a tax credit for a set percentage of your solar system's cost.

The ITC applies towards solar systems installed after January 1, 2006 and under this program you can deduct from your taxes a percentage of the total cost of solar panels, labor, equipment and accessories. You can receive this credit for solar panels installed on a primary or secondary residence that you own in the United States. Originally, you could claim 30% of the total cost, although the amount you can claim may range between 26-30%. There is no maximum claim amount.

Reaching out to your local Santa Clara solar panel installer is the best way to learn more about how the ITC may apply to you.

In August 2022, the ITC (now called the Clean Energy Credit) was bolstered by the passing of the Inflation Reduction Act. Under the new program, solar installation projects begun after January 1, 2022 and finished by December 31, 2032 may be eligible for a 30% tax credit. This percentage will then see a slight annual decrease until the current Clean Energy Credit expires in 2035. Starting in 2023, it will also be easier to obtain credits for energy storage systems under the new laws.

Click here to learn more about the new Inflation Reduction Act. Your local Santa Clara 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

There are more than just federal solar incentives; tax credits, rebates and more might also be offered at the state and local level. These incentives may be provided 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 Santa Clara

You can qualify for solar incentives from the federal government and the California government, as well as from your local utility company. This increase in availability of solar initiatives over the last 15 years has helped increase nationwide solar energy use enormously. Your local Santa Clara solar panel installer can help you learn more about which incentives you may qualify for, and get you on track to switch to renewable energy today.

EcoWatch's Santa Clara, CA Solar Incentives FAQs

How can I find out if I qualify for specific solar incentives?

Broadly, solar incentives apply to:

  1. a new solar system
  2. installed on property you own
  3. within the U.S.
  4. within the date range specified by a particular incentive.

Specific incentives, including those run by the California government or by your county/municipality, could have additional qualifications. Get in touch with your local Santa Clara solar installer to discover what incentives your project may qualify for.

What are the best solar panel installation companies near me?

To find the right solar panel installer for you, check out our guide to Santa Clara's top solar panel companies.

How long until the federal solar tax credit ends?

The Clean Energy Credit (formerly named the federal solar tax credit, or ITC), is scheduled to end on January 1, 2035. Currently set at 30%, the credit will drop to 26% in 2033 and to 22% in 2034.

Can I receive incentives both towards the initial cost of solar panels, and later as reimbursement?

The order in which incentives are applied might vary depending on which incentives you receive but generally yes, you can receive multiple types of incentives for your solar project. Get in touch with your solar installer or a local tax professional to verify you are claiming all possible incentives and applying them in the correct order.

Can I use multiple types of renewable energy to power my home?

Yes, you can use multiple types of renewable energy to power your home, such as a combination of geothermal and solar. You can also combine renewable energy generation with a non-renewable backup source of energy. Be sure to discuss your proposed plan with your local Santa Clara solar installation expert, to make sure you know what you'll need and what kinds of incentives you will or won't qualify for.

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.

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