2024 Solar Incentives Guide for Santa Monica, CA - Tax Credits & Rebates
In this guide, we'll cover the latest solar incentives and rebates available in Santa Monica.
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 Monica?
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
Renewable Market Adjusting Tariff (ReMAT)
LADWP - Feed-in Tariff (FiT) Program
Base price will step down over time as certain MW goals are met
Federal Residential Renewable Energy Tax Credit
Source: https://www.dsireusa.org/
The term "solar incentives" broadly refers to financial incentives implemented by the government and by solar companies to encourage people to use renewable energy by making solar panels more affordable. Different kinds of incentives, such as discounts, cash back or monthly utility bill credits, might be available to you. Some incentives may be handled by the state of California, by your utility company or by county or municipality, while other incentives are federal. Categories of solar incentives include:
- Tax Credits: Tax credits decrease, dollar-for-dollar, the amount of income tax you owe the federal government. These differ from tax deductions.
- Rebates: Some solar companies will help you claim a rebate, or partial refund after purchase, for your solar panels. States or counties will also offer limited-time rebates at various times. The value of a rebate will usually come off the total price before tax credits are calculated.
- Tax Exemptions: Your solar system could qualify for exemptions on both sales and property tax. Sales tax exemptions are effective at the time of purchase. Property tax exemptions let you exclude the value that solar panels add when you are 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 a net metering agreement with your Santa Monica utility company, it will subtract the value of the excess energy your solar system produces from your monthly utility bill. In some areas, this is a dollar-for-dollar credit, while in other areas you may make back a percentage of the value.
- Solar Renewable Energy Certificate (SREC): Typically, solar systems that produce more than a specified (normally small) amount of electricity qualify for SRECs or similar performance-based incentives. SRECs and similar incentives are typically offered by your state government. SRECs can be sold to your utility company or another buyer, and generally the money you make is normally 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. The solar incentive that you may be most familiar with is the Federal Solar Investment Tax Credit (ITC), which gives you a credit on your taxes equal to a percentage of the cost of your solar system.
The ITC is applied to the total cost of solar system installation, including the panels themselves as well as equipment, accessories 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.
Wondering how the ITC applies to your specific situation? Get in touch with your local Santa Monica solar panel installer to get more information.
The Inflation Reduction Act, passed in August 2022, made some changes to the ITC (as well as retitling it the Clean Energy Credit). The Clean Energy Credit lasts until 2035. Solar installation projects started after January 1, 2022, and completed by the end of 2032 may qualify for a 30% tax credit; the amount will decrease slightly on a yearly basis until the end of the current program. Starting in 2023, the expansion to the program will also make claiming credit for energy storage systems easier than ever before.
More information about the new Inflation Reduction Act can be found here. Your local Santa Monica solar panel company can answer any questions you have and explain how the new Clean Energy Credit will apply to you.
State & Local Solar Incentives
Some solar incentives are often also provided at the state and local level. As with federal incentives, these could include tax credits, rebates and more. Some incentives are ongoing, while others are available for a limited time. Solar incentives might be given by the California government, or by your county or municipality.
Next Steps for Installing Solar in Santa Monica
You can qualify for 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. It is a good idea to talk to your local Santa Monica solar installer to learn more about these incentives and to ensure that you're getting all the money you can for your solar panels.
EcoWatch's Santa Monica, CA Solar Incentives FAQs
If I installed solar panels on my house a few years ago, can I still claim incentives?
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 may qualify for a tax credit between 26% and 30%, depending on the date of installation. Speaking with a representative from the company that installed your solar system, or any local Santa Monica solar installer, can help you learn what incentives you qualify for.
How much can I save annually on my electric bill if I install solar panels on my Santa Monica home?
On average, homeowners in Santa Monica who install solar panels save about $1,710.64 per year, or about $32,502.14 over 20 years after they make the switch.
If I change out my appliances for ones that can utilize solar energy, are there incentives that I can claim?
With the passage of the new Inflation Reduction Act, there are a number of new financial incentives for making eco-friendly improvements to your home. More details about these incentives, including information about incentives for purchasing new appliances, can be found here.
Can I use multiple types of renewable energy to power my home?
You can power your home with multiple types of renewable energy, or a combination of renewable and non-renewable energy. Make sure you discuss your plan with your local Santa Monica solar installation expert. They can help you with the plan for your project and educate you on the various incentives that you might or might not 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.