2023 Solar Incentives Guide for Aliso Viejo, CA - Tax Credits & Rebates
In this guide, we'll cover the latest solar incentives and rebates available in Aliso Viejo.
You'll learn about:
- Local & State Solar Incentives
- Federal Tax Credits (Updated for 2023 and beyond)
- Ways to optimize your solar investment
Solar installers are experts in maximizing your solar tax credits and rebates.
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Updated September 15, 2023
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What Solar Tax Credits, Incentives, and Rebates are Available in Aliso Viejo?
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
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 to renewable energy by providing financial incentives that lower the burden of solar panel installation and use. Different types of incentives, like discounts, cash back or credit towards your monthly utility bill, might be available to you. Certain incentives may be offered by the California government, by your utility company or by county or municipality, while others are federal. You might qualify for any of the following types of solar incentives:
- Tax Exemptions: Your solar panels could qualify for both sales tax and property tax exemptions. Sales tax exemptions are effective at the time of purchase. Property tax exemptions allow you to exclude the value that solar panels add when calculating property taxes on your house.
- Solar Renewable Energy Certificate (SREC): SRECs can be sold to your utility company (or other buyers) for money that typically becomes part of your taxable income. In most cases, you must meet a certain (small) threshold of energy production before your solar system is eligible for SRECs or similar performance-based incentives. These kinds of incentives are normally handled at the state level.
- Net Metering: Net metering is an incentive you can get after your solar system is up and running. If you have a net metering agreement in place with your Aliso Viejo utility company, they will subtract the value of the excess energy produced by your solar system from your utility bill each month. In some areas, this credit is dollar-for-dollar, while in others you might receive a refund equivalent to a percentage of the value.
- Rebates: Rebates, or cash back after a purchase, are normally applied prior to any solar tax credits being calculated. Rebates might be provided by your local utility company, by your county or by your state.
- Tax Credits: Tax credits are dollar-for-dollar reductions (not deductions) in the amount of tax that you owe the federal government.
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Momentum Solar
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Federal Solar Incentives
Federal solar incentives are likely the first thing that comes to mind when thinking about solar incentives. The Federal Solar Investment Tax Credit, or ITC, is the most commonly known federal solar incentive. The ITC allows you to claim a tax credit for a specific percentage of your solar system's cost.
The ITC can be applied 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. Initially, the ITC applied to 30% of all costs (panels, equipment, labor and accessories), although this amount has fluctuated slightly over the years between 26-30%. The installation date of your solar system will determine what percentage you are eligible for. There is no cap on the claim amount.
To best understand how the ITC could apply to you, reach out to your local Aliso Viejo solar panel installation expert and ask for more information.
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. The Clean Energy Credit re-raises the credit up to 30% for solar installation projects started after January 1, 2022 and completed by the end of 2032. After this, the credit percentage will be reduced slightly each year until the program expires in 2035. Starting in 2023, the program expansion will also make credits for energy storage systems even easier to claim.
Click here to learn more about the new Inflation Reduction Act. Your local Aliso Viejo solar panel installer can answer any questions you have and explain how the new Clean Energy Credit will apply to you.
State & Local Solar Incentives
Tax credits, rebates and more might be claimed at multiple levels. Along with federal solar incentives, there are often state and local ones, too. These incentives — which might be given by your county or municipality, or by the state of California — may be offered for only a limited time, or on an ongoing basis.
Next Steps for Installing Solar in Aliso Viejo
Solar incentives may be offered by the California government, the federal government or your local utility company. The variety of incentives available has contributed to a large increase in solar energy use in the last 15 years. If you're prepared to switch over to solar energy, talking to your local Aliso Viejo solar panel installation expert is a great first step.
EcoWatch's Aliso Viejo, CA Solar Incentives FAQs
How do I know if I qualify for certain solar incentives?
It's a smart idea to get in touch with your local Aliso Viejo solar installer for a better understanding of which incentives your project will qualify for. In most cases, solar incentives apply to new solar systems installed on a property you own (in the U.S.) between the dates specified by the incentive. Some incentives, such as those provided at the level of the California government, may have other requirements.
My home already has solar panels. Does my system qualify for any incentives?
An excellent idea would be to talk to the company that installed your system — or call a local Aliso Viejo solar installer — to better understand which incentives you might qualify for. If your system was installed after January 1, 2022, you likely qualify for the newly increased 30% tax credit under the Inflation Reduction Act. Solar panels 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 Aliso Viejo annually?
On average, homeowners in Aliso Viejo who install solar panels save approximately $1,449.58 per year, or approximately $27,541.95 over 20 years after they make the switch.
Who installs solar panels near me?
To discover the best solar panel installers near you, take a look at our article on Aliso Viejo's best solar panel companies.
What are some of the environmental benefits of switching to solar energy?
Solar energy is a renewable energy source — by switching where you get your energy, you can help lessen the strain on our planet's resources. Solar panels can also reduce the CO2 emissions from your home by 250 pounds annually, or roughly 5,000 pounds over 20 years.
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.