In Focus: Los Angeles Solar Rebates and Tax Credits
Solar power in Los Angeles makes perfect sense: on average, the city is blessed with over 3,000 hours of sunshine every year. LA also offers solar rebates and other incentives to help encourage homeowners and businesses to invest in solar panels. The program is a little complicated, and LA rolled out revised solar rebates last fall. Here’s all the latest info.
The Current LA Solar Rebate
Solar rebates became so popular in Los Angeles last year that the Department of Water & Power (LADWP) had to temporarily suspend the program in the spring. LADWP has a goal of installing 93 megawatts of solar for its customers. With an average home system about 5 kW, that’s enough solar power for almost 19,000 homes.
LA’s solar incentive program (SIP) was designed to help customers on a first-come, first-served basis. While it’s great to encourage people to adopt solar quickly, the program went to an extreme: early adopters got $4540 back on every kilowatt installed (nearly covering the full cost), but the amount went down quickly for those who were later.
The solar rebate program is set up in ten stages, each with a certain goal for total solar installations. The rebate amount goes down with each stage. As of this month, the LADWP is up to Step 6, and rebates are $1.62/watt (or $1620 per kilowatt). If you live in LA, it’s definitely worth getting your solar system as soon as you can. This stage of the program allows for 10kW total, and already 7.7 kW have been reserved or installed. Here’s more detail on how to apply for the LA solar rebates.
California State Solar Incentives in LA
California exempts solar installations from property tax, so you won’t pay more in taxes, even though the value of your home will go up with solar power. The state also has solar rebates, though they’re replaced in LA by the LADWP program. Unlike some other states, unfortunately, California doesn’t exempt solar panels from sales tax or offer tax credits.
Net Metering in Los Angeles
LADWP offers net metering, which is a great incentive. A special electric meter will keep track when your solar panels are pumping out more power than you’re using (this is common during the day when you’re gone at work). The excess power will be credited towards future electric bills, helping you save more money. The program’s limited to solar systems that are 1 megawatt or smaller, but since home systems are usually around 5 kilowatts, you’ll definitely qualify.
Federal Solar Tax Credit
Like elsewhere in the U.S., homeowners in Los Angeles can add to their solar savings through the federal solar tax credit. The credit is valued at 30% of the total system cost—for example, on a system that starts at $32,500, you can save $8,175 through the tax credit alone.
Solar ROI in LA
For a full breakdown of how much you can expect to save on solar panels in LA, and our calculation of the time to get a return on your investment, check out our Los Angeles solar rebates page.
Solar leasing and solar PPA in LA
Homeowners interested in going solar without the upfront cost have another option— “pay as you go” solar. Through a solar lease or solar power purchase agreement in LA, a company will install solar panels on your house. They’ll keep ownership of the panels, but you’ll get the benefits of lower electricity bills. Sign up to learn more and get a free evaluation of solar power for your home.
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