2024 Solar Incentives Guide for Watsonville, CA - Tax Credits & Rebates
In this guide, we'll cover the latest solar incentives and rebates available in Watsonville.
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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What Solar Tax Credits, Incentives, and Rebates are Available in Watsonville?
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
Federal Residential Renewable Energy Tax Credit
Source: https://www.dsireusa.org/
The term "solar incentives" covers 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. Different types of incentives, including 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 other incentives are federal. Some solar incentives you might qualify for are:
- Tax Exemptions: These may come in the form of property tax exemptions, which allow you to exclude the value added by your solar panels when paying property tax on your home. You may also qualify for an exemption on sales tax at the time of purchase.
- 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 prior to any solar tax credits being calculated. These rebates may be offered by your local utility company, by your county or by your state.
- Net Metering: Net metering factors in after your solar panels are up and running. If you have in place a net metering agreement with your Watsonville utility company, the company will subtract the value of the excess energy your solar system produces from your monthly utility bill. In some areas, this credit is dollar-for-dollar, while in other areas you might receive a refund equivalent to a percentage of the value.
- Solar Renewable Energy Certificate (SREC): SRECs can be sold to your utility company (or other buyers) for money that normally counts as part of your taxable income. Generally, there is a small threshold of energy production to meet before your solar system qualifies for SRECs or other performance-based incentives. SRECs and similar incentives are typically handled by your state government.
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
When you hear the term "solar incentives," federal incentives may be the first thing that comes to mind. It's likely that you've heard of the Federal Solar Investment Tax Credit, or ITC. This incentive is a tax credit that reduces your taxes by a predetermined percentage of the money you spend on solar panels for your home.
The ITC can be applied to solar panels installed on your primary or secondary residence in the United States. The solar system has to have been installed on a property you own after January 1, 2006, for you to claim the credit. The ITC originally paid out 30% of all system costs (panels, labor, equipment and accessories), although the total amount has fluctuated over time between 26-30%. The amount you qualify for will depend on when your solar system was installed. There is no cap on the amount you can claim.
To find out exactly how much the ITC could save you, get in touch with your local Watsonville solar panel installation expert.
The Inflation Reduction Act, passed in August 2022, added more provisions to the ITC (as well as retitling it the Clean Energy Credit). The new Clean Energy Credit extends until 2035. You can now receive a 30% credit for solar systems installed between January 1, 2022, and December 31, 2032. This new credit will then be decreased by a few percentage points every year until the date of expiration. 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 best understand how the new Clean Energy Credit might apply to you, talk to your local Watsonville solar installers.
State & Local Solar Incentives
Some solar incentives are often also provided by state and local governments. Similar to federal incentives, these might include rebates, tax credits and more. Certain 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 Watsonville
The nationwide use of solar energy has gone up significantly in the past 15 years, in part thanks to the proliferation of solar incentives. You can obtain these incentives from your local utility company, the federal government or the California government. When you're prepared to make the change to solar energy, getting in touch with your local Watsonville solar panel installation expert is an excellent place to start.
EcoWatch's Watsonville, CA Solar Incentives FAQs
If I already have a solar system installed on my house, can I still claim incentives?
Your best bet is to talk to a representative from the company that installed your solar panels – or speak to a local Watsonville solar installer — to clarify which incentives you might 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. Systems installed between 2006 and 2021 may qualify for a tax credit of 26-30%.
What are the highest-rated solar panel installation companies near me?
To find the right solar panel installer for you, check out our guide to the top solar companies in Watsonville.
If I change out my appliances for ones that can use solar energy, are there incentives that I can claim?
With the passage of the new Inflation Reduction Act, there are several new financial incentives that are available when you make 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 qualify for incentives both towards the up-front cost of solar panels, and later as reimbursement?
Yes, you can claim both tax credits and rebates towards the cost of solar panels. Depending on precisely which incentives you are receiving, they may apply in a different order. Be sure to speak with your solar installer or a local tax professional to verify that you are claiming the correct incentives and that you're getting the most money possible.
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.