2025 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 2024 and beyond)
- Ways to optimize your solar investment
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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 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
Sonoma County Energy Independence Program (SCEIP)
Federal Residential Renewable Energy Tax Credit
Source: https://www.dsireusa.org/
The phrase "solar incentives" refers to a range of financial incentives implemented to make installing and using solar panels more affordable. This is done to encourage people to switch to renewable energy. Solar incentives may include upfront discounts, cash back or monthly credits towards your utility bill. Some incentives are offered by the federal government, some by the state of California and some by your utility company, county or municipality. You might qualify for any of the following types of solar incentives:
- Tax Credits: Tax credits are dollar-for-dollar reductions that lower the amount of income tax you owe the government. (A tax credit is different from a tax deduction.)
- 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. In most cases, there is a small threshold of energy production to meet before your solar system can earn SRECs or similar performance-based incentives. These kinds of incentives are normally handled by your state government.
- Net Metering: Net metering is an incentive you can get after your solar system is up and running. If you've signed a net metering agreement with your Sonoma utility company, it will subtract the value of the excess energy produced by your solar system from your monthly utility bill. In some areas, this credit is dollar-for-dollar, while in others you might get refunded a percentage of the value.
- Tax Exemptions: Tax exemptions may come in one of two forms. First, there is sales tax exemption, applied when you purchase solar panels. The second is property tax exemption, which allows you to ignore the added value of your solar system when calculating property tax for your house.
- Rebates: A rebate is a partial refund after the purchase of your solar system. Rebates could be offered by your local utility company, your state or your county. The cash back that you get from the rebates is normally applied before tax credits are calculated.
Federal Solar Incentives
When people think of solar incentives, federal incentives may be the first thing that comes to mind. The Federal Solar Investment Tax Credit, or ITC, is the most well-known federal solar incentive. The ITC offers a tax credit for a specific percentage of the cost of your solar system.
The ITC applies towards solar systems installed after January 1, 2006, and lets you deduct from your taxes a percentage of the total cost of solar panels, labor, accessories and equipment. This credit can apply towards a solar panel system installed on a primary or secondary residence in the United States that you own. The original amount you could claim was 30% of the total cost, although the amount you can claim may range between 26-30%. There is no maximum claim amount.
Have questions about how the ITC applies to your specific situation? Reach out to your local Sonoma solar panel installer to get more information.
The ITC was both renewed and expanded by the passage of the Inflation Reduction Act in August 2022. It's also now called the Clean Energy Credit. Now, solar installation projects begun after January 1, 2022, and finished by December 31, 2032, may be eligible for a 30% tax credit. This credit amount will then see a slight annual decrease until the end of the current Clean Energy Credit in 2035. Starting in 2023, the expansion will also make claiming credit for energy storage systems easier than ever before.
Click here to learn more about the new Inflation Reduction Act. The best way to fully understand how the new Clean Energy Credit will apply to you is to get in touch with your local Sonoma solar panel installers.
State & Local Solar Incentives
There are more than just federal solar incentives; rebates, tax credits and more might also be offered at the state and local level. Some incentives are offered for only a limited time, while others are ongoing. Local solar incentives could come from your county or municipality, or from the California government.
Next Steps for Installing Solar in Sonoma
The expanding number of available solar incentives has contributed greatly to the increase in the nationwide adoption of solar energy over the last 15 years. You may receive solar incentives from your local utility company, the federal government or the California government. If you're prepared to make the switch 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 do I learn if I qualify for different solar incentives?
It's a good idea to talk to your local Sonoma solar installer for a better understanding of which incentives your project will qualify for. Usually, solar incentives apply to new solar systems installed on property you own (in the U.S.) between the dates specified by the incentive. Some incentives, such as those provided at the level of the California government, might have other requirements.
How much can I save annually on my electric bill if I install solar panels on my house in Sonoma?
Generally, Sonoma homeowners who install solar panels save around $1,706.46 per year, or approximately $32,422.65 over 20 years after making the switch.
What are some of the environmental benefits of switching to solar energy?
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, which means that switching your home over lessens the drain on our planet's resources.
How long until the federal solar tax credit ends?
The Clean Energy Credit (previously referred to as the federal solar tax credit, or the ITC), is scheduled to end on January 1, 2035. Currently set at 30%, the credit will drop to 26% in 2033 and to 22% in 2034.
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