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
Solar installers are experts in maximizing your solar tax credits and rebates.
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Updated February 03, 2024
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What Solar Tax Credits, Incentives, and Rebates are Available in Santa Monica?
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.
LADWP - Feed-in Tariff (FiT) Program
Base price will step down over time as certain MW goals are met
Property Tax Exclusion for Solar Energy Systems and Solar Plus Storage System
Local Option - Municipal Energy Districts
Renewable Market Adjusting Tariff (ReMAT)
Federal Residential Renewable Energy Tax Credit
Source: https://www.dsireusa.org/
Solar incentives are intended to make renewable energy usage more affordable via financial incentives to help people install solar panels on their homes. Different kinds of incentives, such as cash back, discounts or monthly utility bill credits, might be available to you. Some incentives may be handled by the California government, by your utility company or by county or municipality, while others are federal. Some solar incentives you might qualify for are:
- Tax Credits: Tax credits are dollar-for-dollar reductions (not deductions) in the amount of tax that you owe the federal government.
- Rebates: Solar rebates might be offered by your local utility company, or by your state or county. These rebates are essentially partial refunds that are applied after you purchase solar panels and before tax credits are calculated.
- Tax Exemptions: These could come in the form of property tax exemptions, which would allow you to exclude the value of your solar system when calculating the taxes you pay on your home. You could also look for exemptions on sales tax at the time of purchase.
- Net Metering: Net metering becomes relevant after your solar panels are up and running. If you have a net metering agreement in place with your Santa Monica utility company, they 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 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 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. From its original value of 30% of the total cost, the credit has fluctuated slightly between 26-30%, and you may qualify for varying percentages 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 renaming it to the Clean Energy Credit). Homeowners can now qualify for a credit equal to 30% of the total costs of solar system installation for projects started after January 1, 2022, and completed before the end of 2032. The credit percentage will then begin to decrease on a yearly basis until the Clean Energy Credit expires in 2035. Starting in 2023, the expansion to the program will also make credits for energy storage systems even easier to claim.
Click here to learn more about the new Inflation Reduction Act. Your local Santa Monica solar panel installation experts can answer your questions and explain how the new Clean Energy Credit may apply to you.
State & Local Solar Incentives
Tax credits, rebates and more might be provided at multiple levels. Along with federal solar incentives, there are often state and local ones, too. Some incentives are offered for only a limited time, while others are ongoing. These local incentives may come from your county or municipality, or from the California government.
Next Steps for Installing Solar in Santa Monica
You can apply for and receive 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 in the past 15 years has helped increase nationwide solar energy use enormously. Reaching out to your local Santa Monica solar panel installer is an excellent first step towards getting all the incentives you qualify for when you switch to solar energy.
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?
You should plan to talk to a representative from the company that installed your system – or speak to a local Santa Monica solar installer — to learn about which incentives you may qualify for. If your solar panels were installed after January 1, 2022, you likely qualify for the newly increased 30% tax credit under the Inflation Reduction Act. Solar panels installed between 2006 and 2021 may qualify for a tax credit of 26-30%.
How much can I save on my electric bill annually if I install solar panels on my Santa Monica home?
After adding solar panels to your house in Santa Monica, you can expect to save about $1,710.64 per year, or about $32,502.14 over 20 years.
I want to change out my appliances for ones that are more energy-efficient. Are there any incentives I can apply for?
The new Inflation Reduction Act includes provisions for multiple incentives that 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.
Can I use both solar and another type 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. Be sure to talk through your ideas with your local Santa Monica solar installation expert. They can help you plan your project and educate you on the various incentives that you may or may not qualify for.
What if I add solar panels to a vacation home, rental property or commercial property? Do 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 incentives can be claimed on a second home, provided that it is in the United States and owned by you. There may be other 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.