2023 Solar Incentives Guide for Sonoma, CA - Tax Credits & Rebates

In this guide, we'll cover the latest solar incentives and rebates available in Sonoma.

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 Sonoma 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 Sonoma?

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

Sonoma County Energy Independence Program (SCEIP)

Incentive Type:
PACE Financing
Minimum financing amount is $2,500. Financing is repaid through a special assessment on property tax bills. Financing between $2,500 and $5,000 will be set for repayment in 10 years. Projects over $5,000 may be repaid over 10 or 20 years, at the property owner's discretion. Projects of $60,000 up to $500,000 will require approval by the Program Administrator. Projects valued at $500,000 and above will require specific approval by the Board of Supervisors.

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/


The phrase "solar incentives" includes a wide range of financial incentives put in place to make installing and using solar panels more affordable. This is done to encourage people to switch to renewable energy. Various types of incentives, such as cash back, discounts or monthly utility bill credits, might be available to you. Some incentives may be provided via the California government, by your utility company or by county or municipality, while other incentives are federal. You might qualify for any of the following types of solar incentives:

  • Net Metering: Net metering becomes relevant once your solar system is up and running. If you've signed a net metering agreement with your Sonoma utility company, they 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 others you might make back a percentage of the value.
  • Tax Credits: Tax credits decrease, dollar-for-dollar, the amount of income tax you owe the government. Tax credits are different from tax deductions.
  • Rebates: Rebates, or partial refunds after a purchase, are usually given before any solar tax credits are calculated. Solar rebates might be given by your local utility company, by your state or by your county.
  • Tax Exemptions: Your solar panel system may qualify for exemptions on both sales and property tax. Sales tax exemptions are applied at the time of purchase. Property tax exemptions allow you to exclude the added value of the solar panels when calculating property taxes on your home.
  • Solar Renewable Energy Certificate (SREC): SRECs can be sold to your utility company (or other buyers) for money that is generally considered part of your taxable income. Typically, you must meet a certain (small) threshold of energy production before your solar system is eligible for SRECs or other performance-based incentives. SRECs and similar incentives are normally handled by your state government.

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Federal Solar Incentives

Federal solar incentives are likely to be the first thing that comes to mind when you think about solar incentives. The solar incentive that you're most likely to have heard of is the Federal Solar Investment Tax Credit (ITC), which provides a credit on your taxes equal to a specified percentage of the cost of your solar system.

The ITC applies to 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. Initially, the ITC applied to 30% of all costs (panels, equipment, accessories and labor), although the amount has fluctuated over the years between 26-30%. The amount you qualify for will depend on when your solar system was installed. There is no cap on the claim amount.

Your local Sonoma solar panel installation expert can provide more information about the ITC and how it may apply to your situation.

In August 2022, the ITC (now called the Clean Energy Credit) was expanded and extended by the passage of the Inflation Reduction Act. The new Clean Energy Credit extends until 2035. You are now eligible for a 30% credit for solar systems installed between 2022 and 2032. The total credit will then be decreased by a few percentage points every year until it expires. Starting in 2023, it will also be easier to qualify for credits for energy storage systems under this new program.

More information about the new Inflation Reduction Act can be found here. To better understand how the new Clean Energy Credit will apply to you, reach out to your local Sonoma solar installation company.

State & Local Solar Incentives

Some solar incentives may be provided by state and local governments. As with federal incentives, these may include rebates, tax credits and more. The incentives — which may be provided by your county or municipality, or by the state of California — might be offered for only a limited time, or on an ongoing basis.

Next Steps for Installing Solar in Sonoma

There are a variety of solar incentives: those offered by the federal government, those offered by the California government and those offered by local utility companies, to name a few. Solar energy use has increased tremendously in the last 15 years, partially thanks to these incentives. If you're ready to switch over to solar energy, reaching out to your local Sonoma solar panel installation expert is a great first step.

EcoWatch's Sonoma, CA Solar Incentives FAQs

How can I learn if I qualify for certain solar incentives?

In most cases, solar incentives apply to:

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

Specific incentives, including those given out by the California government or by your county/municipality, sometimes have additional qualifications. Speak with your local Sonoma solar installer to discover what incentives your project may qualify for.

How much will solar panels save me annually on my electric bill in Sonoma?

Once you add solar panels to your home in Sonoma, you can anticipate savings of approximately $1,706.46 per year, or approximately $32,422.65 over the next 20 years.

Who installs solar panel systems near me?

To find the top solar panel installers near you, read our article on the top solar companies in Sonoma.

How long until the federal solar tax credit ends?

The federal solar tax credit, previously called the ITC and now named the Clean Energy Credit, is scheduled to end on January 1, 2035. The current 30% credit will end in 2032, replaced by a 26% credit in 2033 and a 22% credit in 2034.

Can I claim incentives both towards the up-front cost of solar panels, and later as reimbursement?

Yes, you can claim both rebates and tax credits towards the cost of your solar panels. Depending on precisely which incentives you are receiving, they may apply in a different order. Make sure that you talk to your solar installer or a local tax professional to confirm that you are claiming the correct incentives and that you're getting the most money you can.

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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