Pasadena Water and Power Launches New Solar Guide as Federal Tax Credits Set to Expire

Pasadena Water and Power has released a new residential solar systems brochure to help customers begin their solar journey before federal tax credits expire at year’s end.

PWP announced the 2025 guide on its website, calling it a quick guide “on beginning your solar power journey.” General Manager David M. Reyes invited residents to view the brochure and other solar information at PWPweb.com/Solar.

The timing comes as the federal solar investment tax credit faces elimination. The 30% tax credit allows homeowners to deduct installation costs from federal taxes but ends on Dec. 31 this year.

A typical 5-kilowatt solar system in Pasadena costs $11,121 before incentives. With the federal tax credit, the price drops to $7,784.

PWP does not offer solar rebates but provides net surplus compensation for customers who generate excess energy. The utility pays customers $0.0174 per kilowatt-hour for surplus power while charging $0.2349 per kilowatt-hour for electricity.

“Though PWP does not currently offer solar panel rebates, PWP does offer Net Surplus Compensation for customers who generate excess solar energy on their systems,” PWP said.

All PWP electric customers can install solar systems between 1 kilowatt and 1,000 kilowatts. Systems must produce no more than 100% of a customer’s average annual energy consumption.

The utility has streamlined its application process through the PowerClerk online system. PWP eliminated insurance requirements for systems under 15 kilowatts and now accepts electronic signatures.

“We’ve streamlined the process for customers,” Reyes said during a Municipal Services Committee presentation in April.

PWP serves approximately 3,500 customers with solar systems as of March 2025. The utility wants to double that number within two years.

By 2022, Pasadena had 23.4 megawatts of total solar capacity. Residential installations accounted for 96% of the city’s solar systems.

The California Public Utilities Commission’s recent net energy metering updates do not apply to PWP customers. The municipal utility operates independently from state regulations affecting other California utilities.

PWP ended its solar rebate program in 2017 but maintains net energy metering benefits. The utility’s compensation rate equals its average energy charge over 12 months plus 2.5 cents per kilowatt-hour renewable energy premium.

“Installing solar is a big investment,” PWP says on its website. “It is important to consider the size of the system, the return on your investment, the difference between a leased and owned system and more.”

Customers must obtain initial approval from PWP before applying for city building permits for solar installations. Installers submit applications through the PowerClerk system.