2023 Solar Incentives Guide for Capitola, CA - Tax Credits & Rebates
In this guide, we'll cover the latest solar incentives and rebates available in Capitola.
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 Capitola?
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 phrase "solar incentives" refers to financial incentives designed to encourage the use of renewable energy by making the installation and use of solar panels more affordable. These incentives could include cash back, upfront discounts or credit towards your monthly utility bill. Some incentives are given by the federal government, some by the California government and some by your utility company, county or municipality. Types of solar incentives might include:
- Tax Credits: Tax credits are dollar-for-dollar reductions (not deductions) in how much in taxes you owe the government.
- Net Metering: Net metering factors in after your solar system is up and running. If you've signed a net metering agreement with your Capitola utility company, it will subtract the value of the excess energy your solar system produces from your utility bill each month. In some locations, this credit is dollar-for-dollar, while in other areas you may receive a refund equivalent to a percentage of the value.
- Tax Exemptions: Tax exemptions can come in two forms. First, there is sales tax exemption, applied when you purchase solar panels. The second is property tax exemption, which allows you to exclude the value added by your solar system when paying property tax on your home.
- Rebates: Rebates, or cash back after a purchase, are normally applied before any solar tax credits are calculated. These rebates might be provided by your local utility company, by your state or by your county.
- Solar Renewable Energy Certificate (SREC): In general, solar systems that produce more than a specified (normally small) amount of electricity will qualify for SRECs or other performance-based incentives. SRECs and performance-based incentives in general are typically given at the state level. When you receive an SREC, you can sell it to your utility company or another buyer, and generally the money you make is normally considered part of your taxable income.
Federal Solar Incentives
Federal incentives are the kind of incentives that you are most likely to have heard of. The Federal Solar Investment Tax Credit, or ITC, is likely the best-known federal solar incentive. The ITC provides you with 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, labor, equipment and accessories. You can receive this credit for a solar panel system installed on a primary or secondary residence that you own in the United States. The original claim amount was 30% of the total cost, although the amount you can claim may range between 26-30%. There is no maximum claim amount.
To understand exactly how much money the ITC could save you, get in touch with your local Capitola solar panel installation expert.
The Inflation Reduction Act, passed in August 2022, expanded and extended the ITC (as well as renaming it to the Clean Energy Credit). Homeowners can now receive a credit equal to 30% of the total solar system installation costs for projects that began after January 1, 2022 and will be finished by the end of 2032. The percentage will then begin to decrease annually until the Clean Energy Credit expires in 2035. 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. Your local Capitola solar panel installation experts can answer your questions and explain how the new Clean Energy Credit will apply to you.
State & Local Solar Incentives
In addition to those provided at the federal level, there are often also state solar incentives. Tax credits, rebates and more can be offered at a more local level. These incentives might be provided by the California government, or by your county or municipality. Certain incentives are available for a limited time, while others are ongoing.
Next Steps for Installing Solar in Capitola
There are many types of solar incentives: those offered by local utility companies, those offered by the California government and those offered by the federal government, to name a few. The use of solar energy has increased tremendously in the last 15 years, partially due to these incentives. When you're prepared to make the switch to solar energy, getting in touch with your local Capitola solar panel installation expert is a great first step.
EcoWatch's Capitola, CA Solar Incentives FAQs
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