2023 Solar Incentives Guide for Avenal, CA - Tax Credits & Rebates
In this guide, we'll cover the latest solar incentives and rebates available in Avenal.
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 Avenal?
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 term "solar incentives" refers broadly to financial incentives that are in place to encourage increased use of renewable energy by making the installation and use of solar panels more affordable. Various kinds of incentives, such as cash back, discounts or monthly utility bill credits, might be available to you. Certain incentives may be handled 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:
- Solar Renewable Energy Certificate (SREC): In general, solar systems that produce more than a specified (generally small) amount of electricity can qualify for SRECs or other similar performance-based incentives. SRECs and the like are typically given at the state level. SRECs can be sold to your utility company or another buyer, and the money you receive is normally considered part of your taxable income.
- Tax Exemptions: Tax exemptions may come in one of two forms. The first is sales tax exemption, which is applied when you purchase solar panels. The second is property tax exemption. This allows you to exclude the value added by your solar system when calculating property tax for your house.
- Tax Credits: These credits are dollar-for-dollar reductions (not deductions) in how much in taxes you owe the federal government.
- Rebates: Rebates, or partial refunds after a purchase, are normally applied prior to any solar tax credits being calculated. Rebates may be offered by your local utility company, by your county or by your state.
- Net Metering: Net metering becomes relevant once your solar system is up and running. If you have a net metering agreement with your Avenal utility company, it 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 other places you may get refunded a percentage of the value.
Federal Solar Incentives
When thinking about solar incentives, federal incentives may be the first thing that comes to mind. The Federal Solar Investment Tax Credit, or ITC, is probably the best-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 applies towards solar systems installed after January 1, 2006 and lets you deduct from your taxes a percentage of the total cost of solar panels, accessories, equipment and labor. You can claim this credit for solar panels installed on a primary or secondary residence that you own in the United States. Originally, you could claim 30% of the total cost, although certain projects may qualify for only 26%, depending on the details. There is no maximum claim amount.
To better understand how the ITC may apply to you, contact your local Avenal solar panel installation expert and request more information.
The ITC was both renewed and expanded by the passage of the Inflation Reduction Act in August 2022. It's also now called the Clean Energy Credit. The new Clean Energy Credit extends until 2035. American homeowners can now apply for a 30% credit for solar systems that began installation on or after January 1, 2022 and will be done by December 31, 2032. This new credit will then be decreased by a few percentage points every year until the date of expiration. The expansion to the program also makes credits for energy storage systems even easier to claim, beginning in 2023.
Click here to learn more about the new Inflation Reduction Act. To best understand how the new Clean Energy Credit will apply to you, talk to your local Avenal solar installation company.
State & Local Solar Incentives
Some solar incentives are often also provided by state and local governments. Like with federal incentives, these might include tax credits, rebates and more. Certain incentives are ongoing, while others are offered for only a limited time. Local solar incentives could come from your county or municipality, or from the California government.
Next Steps for Installing Solar in Avenal
Solar incentives might come from the federal government, the California government or your local utility company. The growing number of solar incentives available has contributed to a large increase in solar energy use in the last 15 years. We suggest talking to your local Avenal solar installation company for more information about these incentives and to ensure that you're getting the largest number possible for your solar panels.
EcoWatch's Avenal, CA Solar Incentives FAQs
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