2023 Solar Incentives Guide for Alhambra, CA - Tax Credits & Rebates
In this guide, we'll cover the latest solar incentives and rebates available in Alhambra.
You'll learn about:
- Local & State Solar Incentives
- Federal Tax Credits (Updated for 2023 and beyond)
- Ways to optimize your solar investment
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What Solar Tax Credits, Incentives, and Rebates are Available in Alhambra?
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 property The 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
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
The phrase "solar incentives" refers to a wide range of financial incentives designed to make installing and using solar panels more affordable. This is done to encourage people to switch to renewable energy. Incentives could include things like discounts, cash back or credit towards your monthly utility bill. Some incentives are handled federally, while others are offered by the California government or your specific utility company, county or municipality. You might qualify for any of the following types of solar incentives:
- Tax Credits: Tax credits are dollar-for-dollar reductions in the amount of income tax that you owe the federal government. (A tax credit is different from a tax deduction.)
- Solar Renewable Energy Certificate (SREC): SRECs can be sold to your utility company (or other buyers) for cash that typically becomes part of your taxable income. Typically, there is a small threshold of energy production to meet before your solar system can earn SRECs or similar performance-based incentives. Incentives like these are generally handled at the state level.
- Rebates: Rebates, or cash back after a purchase, are typically applied prior to any solar tax credits being calculated. These rebates might be offered by your local utility company, by your state or by your county.
- Tax Exemptions: Your solar panels might qualify for both sales tax and property tax exemptions. Sales tax exemptions come into effect at the time of purchase. Property tax exemptions allow you to ignore the added value of the solar panels when you are calculating property taxes on your home.
- Net Metering: You may be able to sign a net metering agreement with your Alhambra utility company. This agreement may apply to all or a percentage of the excess electricity your solar panels generate. Your utility company will then subtract this value from your monthly utility bill.
Federal Solar Incentives
Federal solar incentives are likely to be the first thing that comes to mind 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 gives you a credit on your taxes equal to a certain percentage of the cost of your solar system.
The ITC applies to a solar system 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 be eligible for the credit. The ITC initially covered 30% of all installation costs (panels, equipment, labor and accessories), although the total amount has fluctuated slightly over the last few years between 26-30%. The amount you qualify for will depend on when your solar system was installed. There is no cap on the claim amount.
Your local Alhambra solar panel installation expert can provide you with more information about the ITC and how it applies to your situation.
The Inflation Reduction Act, passed in August 2022, made some changes to the ITC (as well as retitling it the Clean Energy Credit). With the new provisions, solar installation projects begun after January 1, 2022 and finished by December 31, 2032 might qualify for a 30% tax credit. This credit amount will then decrease slightly each year until the end of the current Clean Energy Credit in 2035. Starting in 2023, the expansion to the program will also make claiming credit for energy storage systems easier than ever before.
Click here to learn more about the new Inflation Reduction Act. The best way to fully understand how the new Clean Energy Credit will apply to you is to speak with your local Alhambra solar panel installers directly.
State & Local Solar Incentives
Some solar incentives are often also provided by state and local governments. Like with federal incentives, these may include tax credits, rebates and more. Some incentives are ongoing, while others are offered for only a limited time. Your local solar incentives may come from the California government, or from your specific county or municipality.
Next Steps for Installing Solar in Alhambra
You can apply for and receive solar incentives from the California government and the federal government, as well as from your local utility company. The growing availability of solar initiatives in the past 15 years has helped increase nationwide solar energy use enormously. Speaking with your local Alhambra solar panel installer is a great first step towards getting all the incentives you qualify for when you switch to solar energy.
EcoWatch's Alhambra, CA Solar Incentives FAQs
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