2023 Solar Incentives Guide for Cerritos, CA - Tax Credits & Rebates
In this guide, we'll cover the latest solar incentives and rebates available in Cerritos.
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 Cerritos?
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 encourage homeowners to make the switch to renewable energy by providing incentives that lower the financial burden of solar panel installation and use. Incentives could include things like discounts, cash back or credit on your utility bill each month. Some incentives are provided by the federal government, while others are handled by the state of California or by your specific utility company, county or municipality. Categories of solar incentives include:
- Tax Exemptions: Tax exemptions may come in one of two forms. First, there is sales tax exemption, applied when you purchase solar panels. The second is property tax exemption. This allows you to exclude the added value of your solar system when paying property tax on your home.
- 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 and similar performance-based incentives may be available to you if you have a solar system that produces more than a specified (generally small) amount of electricity. Performance-based incentives are normally handled at the state level. You can sell the SRECs you receive to your utility company or other buyers, and the money you receive in return is normally considered part of your taxable income.
- Net Metering: You may be able to sign a net metering agreement with your Cerritos utility company, that may apply to all or a percentage of the excess electricity your solar panels generate. They will then subtract this value from your monthly utility bill.
- Rebates: Rebates, or cash back after a purchase, are typically applied before any solar tax credits are calculated. Rebates can be provided by your local utility company, by your state or by your county.
Federal Solar Incentives
When you think about solar incentives, you probably think of federal incentives first. The Federal Solar Investment Tax Credit, or ITC, is probably the most well-known federal solar incentive. The ITC allows you to claim a tax credit for a predetermined percentage of the cost of your solar system.
The ITC covers 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. This credit can be claimed on a solar panel system installed on a primary or secondary residence that you own in the United States. Originally, you could claim 30% of the total cost, although the amount you can claim may range between 26-30%. There is no maximum amount you can claim.
Speaking with your local Cerritos solar panel installer is the best way to learn more about how the ITC may apply to your situation.
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 can apply for a credit equal to 30% of the total cost. After 2033, the percentage will decrease annually until the Clean Energy Credit ends in 2035. Starting in 2023, the expansion will also make claiming credit for energy storage systems easier than ever before.
Click here to learn more about the new Inflation Reduction Act. The easiest way to learn more about how the new Clean Energy Credit might apply to you is to speak with your local Cerritos solar panel company directly.
State & Local Solar Incentives
Some solar incentives may be offered at the local or state level. As with federal incentives, these can include tax credits, rebates and more. Some incentives are ongoing, while others might only be available for a limited time. These incentives might be provided by your county or municipality, or by the California government.
Next Steps for Installing Solar in Cerritos
You can qualify for solar incentives from the federal government and the California government, as well as from your local utility company. The increased availability of solar initiatives over the last 15 years has helped increase solar adoption nationwide. Speak with your local solar panel installer today to find out more information and to save as much money as possible on a solar system for your Cerritos home.
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EcoWatch's Cerritos, CA Solar Incentives FAQs
I already have solar panels. Are there any incentives that I qualify for?
An excellent idea would be to talk to a representative from the company that installed your system — or speak to a local Cerritos solar installer — to better understand which incentives you might qualify for. If your system was installed after January 1, 2022, you likely qualify for the recently increased 30% tax credit under the Inflation Reduction Act. Systems installed between 2006 and 2021 may qualify for a tax credit of 26-30%.
How much can I save annually on my electric bill if I install solar panels on my Cerritos home?
Typically, Cerritos homeowners who install solar panels save about $1,317.57 per year, or about $25,033.85 over 20 years after they make the switch.
What are the highest-rated solar panel installation companies near me?
To discover the best solar panel installation companies near you, read our article on Cerritos' best solar panel companies.
Can I apply for incentives both towards the up-front cost of solar panels, and later as reimbursement?
Yes, you can receive both tax credits and rebates towards the cost of solar panels. Depending on precisely which incentives you are receiving, they may apply in a different order. Make sure that you speak with your solar installer or a local tax professional to ensure that you are claiming the correct incentives and that you're getting the most money possible.
Can I use multiple types of renewable energy to power my home?
Yes, you can employ multiple types of renewable energy to power your home — for example, a combination of solar and geothermal. You can also use both renewable energy sources and a non-renewable backup source of energy. You should discuss your plan with your local Cerritos solar panel installer, to get an understanding of what will be needed and what kinds of incentives you may or may not qualify for.
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.