2024 Solar Incentives Guide for Los Altos, CA - Tax Credits & Rebates
In this guide, we'll cover the latest solar incentives and rebates available in Los Altos.
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 Los Altos?
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
City of Palo Alto Utilities - Solar Water Heating Program
Single-family residential electricity or propane-displacing systems: $0.54 per kWh displaced
Multifamily and Commercial gas-displacing systems: $14.53 per therm displaced
Multifamily and Commercial electricity or propane-displacing systems: $0.42 per kWh displaced
Low-Income Multifamily gas-displacing systems: $19.23/therm displaced
Low-Income Multifamily Electric or Propane Displacing systems: $0.56/kWh displaced
Federal Residential Renewable Energy Tax Credit
Source: https://www.dsireusa.org/
Solar incentives encourage homeowners to switch their home over to renewable energy by offering incentives that lower the financial burden of solar panel installation and use. Incentives may include things like discounts, cash back or credit towards your monthly utility bill. Some incentives are offered federally, while others are offered by the California government or your utility company, county or municipality. Categories of solar incentives include:
- Tax Credits: Tax credits reduce, dollar-for-dollar, how much income tax you owe the government. Tax credits differ from tax deductions.
- Solar Renewable Energy Certificate (SREC): Typically, solar systems that produce over a specific (normally small) amount of electricity will qualify for SRECs or other similar performance-based incentives. SRECs and the like are typically offered at the state level. SRECs can be sold to your utility company or another buyer, and the money you receive is normally considered part of your taxable income.
- Tax Exemptions: Tax exemptions can come in one of two forms. The first is sales tax exemption, applied at the time you purchase your solar panels. The second is property tax exemption. This allows you to ignore the value added by your solar system when paying property tax on your home.
- Rebates: Solar rebates can be offered by your local utility company, or by your state or county. These rebates are essentially cash back that is applied after you pay for solar panels and before tax credits are calculated.
- Net Metering: Net metering becomes relevant once your solar system is up and running. If you've signed a net metering agreement with your Los Altos utility company, the company will subtract the value of the excess energy your solar system produces from your utility bill each month. In some locations, this credit is dollar-for-dollar, while in others you may make back a percentage of the value.
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
Federal solar incentives are likely the first thing that you think of when you think about solar incentives. The solar incentive that you're most familiar with is probably the Federal Solar Investment Tax Credit (ITC), which provides a credit on your taxes equal to a percentage of the cost of your solar system.
The ITC initially applied to 30% of the cost of installing solar panels, although that number has fluctuated slightly over the years between 26-30%. The percentage you qualify for will depend on when your solar system was installed. The cost of installation includes the panels themselves as well as the cost of accessories, equipment and labor. There is no maximum claim amount. The ITC applies to solar panels installed after January 1, 2006, on your primary or secondary residence. The residence must be in the United States and owned by you.
To better understand exactly how much money the ITC could save you, speak with your local Los Altos solar panel installer.
The ITC has been renewed and expanded following the passage of the Inflation Reduction Act in August 2022. It's also now called the Clean Energy Credit. Homeowners can now receive a credit of 30% of the total solar system installation costs for projects started after January 1, 2022, and completed before the end of 2032. This percentage will then decrease on a yearly basis until the Clean Energy Credit expires in 2035. Starting in 2023, it will also be easier to claim credits for energy storage systems under this new program.
More information about the new Inflation Reduction Act can be found here. To understand how the new Clean Energy Credit might apply to you, get in touch with your local Los Altos solar installers.
State & Local Solar Incentives
In addition to federal solar incentives, there are often also state ones. Rebates, tax credits and more can be offered at a more local level. Incentives might be given by your county or municipality, or by the state of California. Some incentives are available for only a limited time, while others are ongoing.
Next Steps for Installing Solar in Los Altos
There are many kinds of solar incentives: those provided by local utility companies, those provided by the federal government and those provided by the California government, to name a few. Solar energy use has grown tremendously in the last 15 years, partially thanks to these incentives. It is a good idea to talk to your local Los Altos solar installer to learn more about these incentives and to ensure that you're getting all the money you can for your solar panels.
EcoWatch's Los Altos, CA Solar Incentives FAQs
What are some of the environmental benefits of switching to solar?
You can reduce your carbon footprint by 250 pounds of CO2 annually by switching to solar panels. This adds up to approximately 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.
When does the federal solar tax credit end?
The Clean Energy Credit (previously called the federal solar tax credit, or 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.
Can I use multiple types of renewable energy to power my home?
Yes, you can use multiple types of renewable energy to power your home — for example, a combination of solar and wind power. You can also use both renewable energy sources and a backup source of non-renewable energy. Be sure to discuss your proposed plan with your local Los Altos solar installation expert, so that you understand what you'll need and what kinds of incentives you may or may not qualify for.
What if I am planning to add solar panels to a vacation home, rental property or commercial property? Can I still qualify for incentives?
Many solar incentives apply to a property located within the United States that you own; most secondary residences will fall into this category. 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 fully understand what incentives apply to your specific situation.
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.