2024 Solar Incentives Guide for Lafayette, CA - Tax Credits & Rebates
In this guide, we'll cover the latest solar incentives and rebates available in Lafayette.
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 Lafayette?
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/
Solar incentives are meant to encourage homeowners to switch their home over to renewable energy by providing financial incentives that lower the burden of solar panel installation and use. Various types of incentives, such as discounts, cash back or credit towards your monthly utility bill, might be available to you. Some incentives may be offered 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 Exemptions: Your solar panels could 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 you are calculating property taxes on your home.
- Tax Credits: Tax credits decrease, dollar-for-dollar, how much income tax you owe the government. These are different from tax deductions.
- Solar Renewable Energy Certificate (SREC): SRECs and other performance-based incentives may be available to you if you have a solar system that produces more than a specified (generally small) amount of electricity. These types of incentives are typically handled at the state level. You can sell your SRECs to your utility company or other buyers, and the money you receive in return is generally considered part of your taxable income.
- Net Metering: Net metering factors in after your solar system is up and running. If you have a net metering agreement with your Lafayette utility company, it will subtract the value of the excess energy your solar system produces from your monthly utility bill. In some places, this is a dollar-for-dollar credit, while in other areas you may make back a percentage of the value.
- Rebates: Your solar installer might help you claim a rebate, or partial refund of your purchase, for your solar system. Counties or states will also sometimes offer limited-time rebates. If you receive a rebate, that amount will usually come off your total price before any tax credits are calculated.
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
Best Social Impact
Palmetto Solar
- Expansive service area
- Makes charitable contributions
- Certified B Corp
- No leases or PPAs
- Quality of installation may vary by location
Federal Solar Incentives
When thinking about solar incentives, federal incentives are likely the first thing that comes to mind. It's likely that you've heard of the Federal Solar Investment Tax Credit, or ITC. The ITC is a tax credit that reduces your taxes by a specified percentage of the money you spend on solar panels for your home.
The ITC covers 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 be claimed on solar panels installed on a primary or secondary residence that you own in the United States. The original claim amount was 30% of the total cost, although depending on when the project was completed, your credit may range from 26-30%. There is no maximum claim amount.
Contacting your local Lafayette solar panel installation expert is the best way to learn more about how the ITC could apply to your situation.
The Inflation Reduction Act, passed in August 2022, expanded and extended the ITC (as well as retitling it the Clean Energy Credit). The Clean Energy Credit has increased the current credit up to 30% for solar installations undertaken between January 1, 2022, and December 31, 2032. After this, the credit percentage will be reduced slightly each year until the end of the program in 2035. Starting in 2023, the expansion to the program will also make claiming credit for energy storage systems easier than ever before.
More information about the new Inflation Reduction Act can be found here. The best way to understand how the new Clean Energy Credit might apply to you is to reach out to your local Lafayette solar panel installers with your questions.
State & Local Solar Incentives
Rebates, tax credits and more can be claimed at multiple levels. In addition to federal solar incentives, there are often state and local ones as well. These incentives may be distributed by your county or municipality, or by the California government. Certain incentives are available for a limited time, while others are ongoing.
Next Steps for Installing Solar in Lafayette
There are a number of different solar incentives: those provided by local utility companies, those offered by the federal government and those offered by the California government, to name a few. The use of solar energy has increased tremendously in the last 15 years, partially thanks to these incentives. It is a good idea to talk to your local Lafayette solar installation expert to learn more about these incentives and to be sure that you're getting the most money possible for your solar panels.
EcoWatch's Lafayette, CA Solar Incentives FAQs
If I already have a solar system installed on my house, can I still claim incentives?
You should plan to talk to someone from the company that installed your solar system – or call a local Lafayette solar installer — to learn about 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. Solar systems installed between 2006 and 2021 may qualify for a tax credit of 26-30%.
How much will a solar system save me on my electric bill in Lafayette annually?
After adding solar panels to your home in Lafayette, you can anticipate savings of approximately $1,729.84 per year, or approximately $32,866.94 over 20 years.
How long until the federal solar tax credit ends?
The Clean Energy Credit (formerly named the federal solar tax credit, or the ITC), currently ends on January 1, 2035. Currently set at 30%, the credit will drop to 26% in 2033 and to 22% in 2034.
Can I qualify for incentives both towards the initial cost of solar panels, and later as reimbursement?
The order that incentives will be applied in could vary depending on which incentives you are claiming but in most cases yes, you can receive multiple types of incentives for your solar project. Speak to your solar installer or a local tax professional to ensure you are claiming all possible incentives and applying them in the correct order.
What if I want to add a solar system to a rental property, vacation home or commercial property? Can I still qualify for incentives?
While we recommend speaking with 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, as long as 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.