2023 Solar Incentives Guide for Alum Rock, CA - Tax Credits & Rebates
In this guide, we'll cover the latest solar incentives and rebates available in Alum Rock.
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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What Solar Tax Credits, Incentives, and Rebates are Available in Alum Rock?
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
Solar incentives are designed to encourage homeowners to make the 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. Some incentives may be handled by the state of California, by your utility company or by county or municipality, while others are federal. Some broad categories of solar incentives include:
- Tax Credits: These credits are dollar-for-dollar reductions (not deductions) in how much in taxes you owe the federal government.
- Net Metering: Make sure you speak to your Alum Rock utility company about signing a net metering agreement. This will allow you to receive credit towards your monthly utility bill for the value of excess energy your solar panels generate. You could receive either a dollar-for-dollar credit or a percentage of the value.
- Tax Exemptions: Your solar system could qualify for both sales tax and property tax exemptions. Sales tax exemptions come into effect at the time of purchase. Property tax exemptions let you exclude the value added by your solar panels when you are calculating property taxes on your home.
- Solar Renewable Energy Certificate (SREC): SRECs can be sold to your utility company (or other buyers) for cash that is generally considered part of your taxable income. In most cases, there is a small threshold of energy production to meet before your solar system qualifies for SRECs or similar performance-based incentives. SRECs and similar incentives are generally handled at the state level.
- Rebates: A solar rebate is a partial refund given after you've purchased your solar panels. These might be offered by your local utility company, your state or your county. The cash back that you get from the rebates is normally applied before tax credits are calculated.
Federal Solar Incentives
When thinking about solar incentives, federal incentives are likely the first thing that comes to mind. The Federal Solar Investment Tax Credit, or ITC, is likely the most well-known federal solar incentive. The ITC provides you with a tax credit for a predetermined percentage of the cost of your solar system.
The ITC can be applied to solar systems installed after January 1, 2006 on a primary or secondary residence in the United States that you own. Initially, the credit applied to 30% of the total cost — for panels, accessories, labor and equipment — although that amount may range from 26-30%, depending on when your solar system was installed. There is no cap on the amount you can claim.
To understand exactly how much money the ITC could save you, get in touch with your local Alum Rock solar panel installer.
The Inflation Reduction Act, passed in August 2022, made some changes to the ITC (as well as renaming it to the Clean Energy Credit). Now, solar installation projects started after January 1, 2022 and completed by the end of 2032 may be eligible for a 30% tax credit. This percentage will then decrease slightly each year until the end of the current Clean Energy Credit in 2035. The expansion to the program also makes credits for energy storage systems even easier to claim, beginning in 2023.
More information about the new Inflation Reduction Act can be found here. To fully understand how the new Clean Energy Credit will apply to you, talk to your local Alum Rock solar installers.
State & Local Solar Incentives
Some solar incentives may be provided by state and local governments. Similar to federal incentives, these could include tax credits, rebates and more. Some incentives are ongoing, while others are offered for only a limited time. These local incentives could come from your county or municipality, or from the California government.
Next Steps for Installing Solar in Alum Rock
You can qualify for solar incentives from the California government and the federal government, as well as from your local utility company. Growing availability of solar initiatives in the past 15 years has helped greatly increase nationwide adoption of solar energy. Talking to your local Alum Rock solar panel installation expert is a great first step towards getting all the incentives you qualify for when you switch to solar energy.
EcoWatch's Alum Rock, CA Solar Incentives FAQs
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