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.
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By EcoWatch Local Advisors
Data Analysis: James Savino
Ranking Methodology: Karsten Neumeister
Updated March 14, 2023
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What Solar Tax Credits, Incentives, and Rebates are Available in Sonoma?
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 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
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
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)
Federal Residential Renewable Energy Tax Credit
Solar incentives are designed to mitigate the cost of installing a solar panel system on your home. Financial incentives like these are intended to encourage more Americans to switch their home over to renewable energy. Incentives could include things like discounts, cash back or monthly utility bill credits. Some incentives are offered federally, while others are provided by the California government or your specific utility company, county or municipality. Some solar incentives you might qualify for are:
- Net Metering: You may be able to sign a net metering agreement with your Sonoma utility company. This agreement may apply to all or a percentage of the excess electricity that is generated by your solar panels. Your utility company will then deduct this value from your monthly utility bill.
- Solar Renewable Energy Certificate (SREC): SRECs are credits that 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 qualifies for SRECs or similar performance-based incentives. These kinds of incentives are normally handled at the state level.
- Tax Credits: Tax credits are dollar-for-dollar reductions (not deductions) in how much income tax you owe the government.
- Rebates: Rebates, or cash back after a purchase, are normally applied before any solar tax credits are calculated. Solar rebates might be provided by your local utility company, by your state or by your county.
- Tax Exemptions: Tax exemptions may come in two forms. The first is sales tax exemption, which is applied when you purchase solar panels. The second is property tax exemption. This allows you to ignore the added value of your solar system when calculating property tax for your house.
Federal Solar Incentives
When someone says "solar incentives," you probably think of federal incentives first. The solar incentive that you're most likely to have heard of is the Federal Solar Investment Tax Credit (ITC), which gives you a credit on your taxes equal to a specified percentage of your solar system's cost.
The ITC is applied to the total cost of solar panel installation, including the panels themselves as well as labor, equipment and accessories. You can claim this credit for panels installed after January 1, 2006 on a primary or secondary residence that you own and that 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 claim amount.
To better understand exactly how much the ITC could save you, get in touch with your local Sonoma solar panel installation expert.
In August 2022, the Inflation Reduction Act laid out new provisions for the ITC, now referred to as the Clean Energy Credit. For solar systems installed between January 1, 2022 and December 31, 2032, homeowners can apply for a credit for 30% of the total cost. After 2033, the percentage will decrease annually until the Clean Energy Credit expires in 2035. Starting in 2023, it will also be easier to get credits for energy storage systems under the new laws.
Click here to learn more about the new Inflation Reduction Act. Your local Sonoma solar panel company is the best resource for answering your questions about the new Clean Energy Credit and how it may apply to you.
State & Local Solar Incentives
There are often also state solar incentives in addition to those provided by the federal government. Tax credits, rebates and more might be available at a more local level. Some incentives are offered for only a limited time, while others are ongoing. Local solar incentives might come from your county or municipality, or from the California government.
Next Steps for Installing Solar in Sonoma
Solar incentives can be offered by your local utlity company, the California government or the federal government. The large number of incentives available has facilitated the nationwide growth of solar energy use in the last 15 years. Your local Sonoma solar panel installation company can help you learn more about which incentives you can apply for, and get you feeling good about making the change to renewable energy today.
Best Regional Coverage
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EcoWatch's Sonoma, CA Solar Incentives FAQs
Can I receive any incentives when I add solar panels to a rental property, vacation home or commercial property?
Many solar incentives are intended to apply to a property you own that is located within the United States, and most secondary residences will fall under this distinction. Other solar incentives may be available for commercial properties, depending on the details. We recommend reaching out to your local solar installer and/or tax professional to best understand what incentives may apply to your specific situation.
How much will a solar system save me annually on my electric bill in Sonoma?
After adding solar panels to your house in Sonoma, you can anticipate savings of about $1,706.46 per year, or about $32,422.65 over the next 20 years.
What are some of the environmental benefits of switching to solar?
You can reduce your carbon footprint by 250 pounds of CO2 a year when you switch to solar panels. This adds up to around 5,000 pounds in 20 years. Solar is also a renewable energy source, meaning that making the switch lessens the drain on our planet's resources.
How long until the federal solar tax credit ends?
The federal solar tax credit, previously called the ITC and now called the Clean Energy Credit, is set 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 use a combination of 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 Sonoma solar installer. They can help you with the plan for your project and give you an understanding of various incentives that 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.