2024 Solar Incentives Guide for Santa Cruz, CA - Tax Credits & Rebates
In this guide, we'll cover the latest solar incentives and rebates available in Santa Cruz.
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 Santa Cruz?
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 propertyThe 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
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 mitigate the cost of installing solar panels on your home. Financial incentives like these are intended to encourage more people to switch their home over to renewable energy. Incentives might include things like discounts, cash back or credit towards your monthly utility bill. Some incentives are offered federally, while others are handled by the California government or by your specific utility company, county or municipality. Types of solar incentives might include:
- Tax Credits: These credits are dollar-for-dollar reductions (not deductions) in how much income tax you owe the federal government.
- Solar Renewable Energy Certificate (SREC): SRECs are credits that can be sold to your utility company (or other buyers) for cash that typically becomes part of your taxable income. Generally, there is a small threshold of energy production to meet before your solar system can earn SRECs or similar performance-based incentives. Incentives like these are typically handled at the state level.
- Tax Exemptions: Your solar system might qualify for exemptions on both sales and property tax. Sales tax exemptions are applied at the time of purchase. Property tax exemptions let you exclude the value added by your solar panels when calculating property taxes on your house.
- Net Metering: Net metering is an incentive you can get once your solar system is up and running. If you have in place a net metering agreement with your Santa Cruz utility company, it will subtract the value of the excess energy produced by your solar system from your monthly utility bill. In some locations, this is a dollar-for-dollar credit, while in other places you may receive a refund equivalent to a percentage of the value.
- Rebates: Your solar installer might help you claim a rebate, or partial refund of your purchase, for your solar panels. Counties or states will also sometimes offer limited-time rebates. Any rebates you receive will usually be deducted from the total price before tax credits are calculated.
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 solar incentives are likely to be the first thing that you think of when you think about solar incentives. A federal incentive many people are likely to be familiar with is the Federal Solar Investment Tax Credit (ITC). The ITC is a tax credit for a specific percentage of your solar system's cost.
The ITC can be applied to the total cost of solar panel installation, including the panels themselves as well as accessories, equipment and labor. You can claim this credit for panels installed after January 1, 2006, on a primary or secondary residence that you own, as long as it is located in the United States. Originally set at 30% of total costs, the credit has fluctuated over time, and you may qualify for different amounts depending on when your project was completed. There is no maximum amount you can claim.
To better understand how the ITC will apply to you, get in touch with your local Santa Cruz solar panel installation expert and ask for more information.
The Inflation Reduction Act, passed in August 2022, expanded and extended the ITC (as well as renaming it to the Clean Energy Credit). The new Clean Energy Credit now runs until 2035. Homeowners can now apply for a 30% credit for solar systems installed between 2022 and 2032. This new credit will then decrease annually until it expires. Starting in 2023, the program expansion will also make it easier to get credit for energy storage systems.
Click here to learn more about the new Inflation Reduction Act. Your local Santa Cruz solar panel installer can answer any questions you have and explain how the new Clean Energy Credit may apply to you.
State & Local Solar Incentives
Some solar incentives may be offered at the local or state level. As with federal incentives, these may include tax credits, rebates and more. The incentives — which might be given by the state of California, or by your county or municipality — could be offered for only a limited time, or on an ongoing basis.
Next Steps for Installing Solar in Santa Cruz
Nationwide solar energy use has gone up significantly in the last 15 years, in part due to the proliferation of solar incentives. You can obtain these incentives from the California government, the federal government or your local utility company. Your local Santa Cruz solar panel installer can provide you with more details about which incentives you can apply for, and get you on track to switch to renewable energy today.
EcoWatch's Santa Cruz, CA Solar Incentives FAQs
I already have solar panels. Does my system qualify for any incentives?
If your solar panels were installed after January 1, 2022, you may qualify for the newly increased 30% tax credit under the Inflation Reduction Act. If you had your system installed between 2006 and 2021, you might qualify for a tax credit between 26% and 30%, depending on the date of installation. Speaking with the company that installed your system, or any local Santa Cruz solar installer, can help you learn more about what incentives you qualify for.
What are the best solar panel installation companies near me?
To find the top solar panel installation companies near you, read our article on Santa Cruz's top solar panel companies.
What are some of the environmental benefits of switching to solar?
Solar energy is renewable — by changing where you get your energy, you can help reduce the strain on our planet's resources. Solar panels can also lower your home's CO2 emissions by 250 pounds a year, or around 5,000 pounds in 20 years.
Can I claim incentives both towards the up-front cost of solar panels, and later as reimbursement?
The order that incentives will be applied in could vary depending on which incentives you receive but usually yes, you can receive multiple types of incentives for your solar project. Talk with your solar installer or a local tax professional to make sure you are claiming all the incentives you're eligible for and applying them in the correct order.
What if I am planning to add solar panels to a vacation home, rental property or commercial property? Can I still qualify for incentives?
While we recommend getting in touch with your local solar installer and/or tax professional to better understand what solar incentives apply to you, many can be claimed on a second home, provided that it is in the United States and owned by you. There may be additional incentives available specifically for commercial properties, depending on the specifics.
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.