2024 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 2024 and beyond)
- Ways to optimize your solar investment
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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
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 designed to mitigate the cost of installing solar panels on your home. These financial incentives are designed to encourage more people to switch their home over to renewable energy. Various types of incentives, like cash back, discounts or credit towards your monthly utility bill, might be available to you. Certain incentives may be provided via 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:
- Net Metering: Net metering becomes relevant once your solar panels are up and running. If you have in place a net metering agreement with your Arroyo Grande utility company, the company will subtract the value of the excess energy produced by your solar system from your monthly utility bill. In some places, this is a dollar-for-dollar credit, while in others you might get refunded a percentage of the value.
- Tax Exemptions: These can come in the form of property tax exemptions, which let you exclude the value of your solar system when calculating the taxes you pay on your home. You may also qualify for an exemption on sales tax at the time of purchase.
- Rebates: Some solar companies will help you claim a rebate, or partial refund after purchase, for your solar panels. Counties or states will also sometimes offer limited-time rebates. Any rebates you receive will usually be deducted from the total price before tax credits are calculated.
- Tax Credits: These credits are dollar-for-dollar reductions (not deductions) in how much in taxes you owe the government.
- Solar Renewable Energy Certificate (SREC): SRECs are credits that can be sold to your utility company (or other buyers) for money that typically becomes part of your taxable income. Generally, 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.
Best National Provider
SunPower
- Most efficient panels on the market
- National coverage
- Cradle to Cradle sustainability certification
- Great warranty coverage
- Expensive
- Customer service varies by local dealer
Best Regional Coverage
Momentum Solar
- Great warranty coverage
- Representatives are experts on local policies
- Concierge service ensures steady communication
- Slightly limited service offerings
Best for Leasing
Sunrun
- Expansive service area
- Many financing options
- Some reported issues with customer service
- Some reported issues with door-to-door sales
Federal Solar Incentives
When people think of solar incentives, federal incentives might be the first thing that comes to mind. The Federal Solar Investment Tax Credit, or ITC, is the most well-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 solar systems installed after January 1, 2006, and allows you to deduct from your taxes a percentage of the total cost of solar panels, equipment, labor and accessories. You can claim this credit for solar panels installed on a primary or secondary residence in the United States that you own. The original amount you could claim was 30% of the total cost, although certain projects may qualify for only 26%, depending on the details. There is no maximum claim amount.
To find out exactly how much money the ITC could save you, contact your local Arroyo Grande solar panel installation expert.
The Inflation Reduction Act, passed in August 2022, made some changes to the ITC (as well as renaming it to the Clean Energy Credit). The new Clean Energy Credit is valid until 2035. You are now eligible for a 30% credit for solar systems that began installation after January 1, 2022, and are completed by the end of 2032. The credit will then be decreased by a few percentage points every year until the date of expiration. The expansion also makes it easier to get credit for energy storage systems, beginning in 2023.
More information about the new Inflation Reduction Act can be found here. To fully understand how the new Clean Energy Credit might apply to you, reach out to your local Arroyo Grande solar installation company.
State & Local Solar Incentives
Federal solar incentives are not your only option; tax credits, rebates and more are often offered at the local or state level. These incentives might be distributed by the California government, or by your county or municipality. Certain incentives are ongoing, while others are available for a limited time.
Next Steps for Installing Solar in Arroyo Grande
The large number of available solar incentives has helped tremendously increase the use of solar power nationwide over the past 15 years. You may receive solar incentives from your local utility company, the federal government or the California government. Getting in touch with your local Arroyo Grande solar panel installer is an excellent first step towards getting all the incentives you qualify for when you switch to solar energy.
EcoWatch's Arroyo Grande, CA Solar Incentives FAQs
My home already has solar panels installed. Do I qualify for any incentives?
If your solar panels were installed after January 1, 2022, you may qualify for the newly increased 30% tax credit under the Inflation Reduction Act. If you installed your system between 2006 and 2021, you may qualify for a tax credit between 26% and 30%, depending on the date of installation. Speaking with a representative from the company that installed your solar system, or any local Arroyo Grande solar installer, can help you understand what incentives you qualify for.
How much will solar panels save me annually on my electric bill in Arroyo Grande?
When you add solar panels to your Arroyo Grande home, you can anticipate savings of approximately $1,831.12 per year, or about $34,791.25 over the next 20 years.
If I trade in my appliances for ones that can utilize solar energy, are there incentives that I can claim?
With the passage of the new Inflation Reduction Act, there are a variety of new financial incentives for making eco-friendly improvements to your home. More details on these incentives, including information about incentives for purchasing new appliances, can be found here.
What if I add a solar system to a vacation home, rental property or commercial property? Do I still qualify for incentives?
Many solar incentives are intended to apply to a property located within the United States that you own; most secondary residences fall into this category. There may be other solar incentives available for commercial properties, depending on the specifics. We recommend getting in touch with your local solar installer and/or tax professional to fully understand what incentives apply to your specific situation.
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.