2023 Solar Incentives Guide for Arroyo Grande, CA - Tax Credits & Rebates
In this guide, we'll cover the latest solar incentives and rebates available in Arroyo Grande.
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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By EcoWatch Local Advisors
Data Analysis: James Savino
Ranking Methodology: Karsten Neumeister
Updated May 04, 2023
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What Solar Tax Credits, Incentives, and Rebates are Available in Arroyo Grande?
Property Tax Exclusion for Solar Energy Systems and Solar Plus Storage System
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 encourage people to switch to renewable energy by offering financial incentives that lower the burden of solar panel installation and use. The incentives can include cash back, upfront discounts or monthly credits towards your utility bill. Some incentives are handled by the federal government, some by the state of California and some by your utility company, county or municipality. Some solar incentives you might qualify for are:
- Tax Credits: Tax credits are dollar-for-dollar reductions (not deductions) in how much in taxes you owe the federal government.
- Net Metering: Don't forget to speak with your Arroyo Grande utility company about signing a net metering agreement. This allows you to get a credit towards your monthly utility bill for the value of excess energy your solar panels generate. You might receive either a dollar-for-dollar credit or a percentage of the value.
- Solar Renewable Energy Certificate (SREC): SRECs and other performance-based incentives are typically handled at the state level. Once your solar panel system meets the qualification threshold (generally a small amount of energy production), you can receive SRECs that can then be sold to your utility company or other buyers. The money you receive is generally considered part of your taxable income.
- Tax Exemptions: Your solar system 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 ignore the value that solar panels add when calculating property taxes on your home.
- Rebates: A rebate is a partial refund given after you've purchased your solar system. Rebates might be offered by your local utility company, your county or your state. The rebates are usually applied before calculating tax credits.
Federal Solar Incentives
When thinking about solar incentives, you probably think of federal incentives first. The solar incentive that you may be most familiar with is the Federal Solar Investment Tax Credit (ITC), which provides a credit on your taxes equal to a certain percentage of your solar system's cost.
The ITC applies to the value of a solar system installed on your primary or secondary residence in the United States. The solar panels must have been installed on a property you own after January 1, 2006 for you to be eligible for the credit. Originally, the ITC covered 30% of all installation costs (panels, accessories, labor and equipment), although this 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.
To better understand how the ITC might apply to you, contact your local Arroyo Grande solar panel installer and ask for more information.
In August 2022, the ITC (now called the Clean Energy Credit) was expanded and extended by the passage of the Inflation Reduction Act. For solar system installations that begin after January 1, 2022 and are completed by the end of 2032, homeowners may be eligible for a credit equal to 30% of the total cost. After 2033, the percentage will decrease annually until the Clean Energy Credit expires in 2035. Beginning in 2023, it will also be easier to get credits for energy storage systems under the new laws.
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, speak with your local Arroyo Grande solar installers.
State & Local Solar Incentives
There are often also state solar incentives in addition to those provided by the federal government. Tax credits, rebates and more may be available at a more local level. These incentives — which might be given by your county or municipality, or by the state of California — could be offered on an ongoing basis, or for only a limited time.
Next Steps for Installing Solar in Arroyo Grande
The nationwide use of solar energy has gone up tremendously in the past 15 years, in part thanks to the increase in availability of solar incentives. You might receive these incentives from the California government, the federal government or your local utility company. Talking to your local Arroyo Grande solar panel installation company is a great first step towards getting all the incentives you qualify for when you switch to solar energy.
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EcoWatch's Arroyo Grande, CA Solar Incentives FAQs
What if I add a solar system to a vacation home, rental property or commercial property? Will I still qualify for incentives?
Many solar incentives apply to a property you own that is located within the United States, and most secondary residences fall into this category. Other solar incentives may be available for commercial properties, depending on the specifics. We recommend getting in touch with your local solar installer and/or tax professional to best understand what incentives may apply to your specific situation.
How much will solar panels save me on my electric bill in Arroyo Grande annually?
Generally, Arroyo Grande homeowners who install solar panels save approximately $1,831.12 per year, or approximately $34,791.25 over 20 years after they make the switch.
What are some environmental benefits of installing solar panels on my house?
You can reduce your carbon footprint by 250 pounds of CO2 a year by installing solar panels. This adds up to around 5,000 pounds over 20 years. In addition, solar power is a renewable energy source, which means that making the switch reduces the drain on our planet's resources.
How long until the federal solar tax credit ends?
The Clean Energy Credit (previously called the federal solar tax credit, or ITC), currently ends on January 1, 2035. Currently set at 30%, the credit will drop to 26% in 2033 and to 22% in 2034.
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.