2023 Solar Incentives Guide for Commerce, CA - Tax Credits & Rebates
In this guide, we'll cover the latest solar incentives and rebates available in Commerce.
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 Commerce?
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 that are in place to encourage the use of renewable energy by making the installation and use of solar panels more affordable. You might be eligible for several kinds of incentives, such as discounts, cash back or monthly utility bill credits, depending on your situation. Some incentives come from your specific utility company, county or municipality, some from the California government and others from the federal government. Types of solar incentives might include:
- Solar Renewable Energy Certificate (SREC): Typically, solar systems that produce over a threshold (usually small) amount of electricity will qualify for SRECs or similar performance-based incentives. SRECs and performance-based incentives in general 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.
- Rebates: A solar rebate is a partial refund after the purchase of your solar system. Rebates might be offered by your local utility company, your county or your state. The discount that rebates offer is normally applied to the price of solar panels before calculating tax credits.
- Tax Exemptions: These can come in the form of property tax exemptions, which would allow you to exclude the value added by your solar panels when calculating the taxes you pay on your house. They may also include exemptions on sales tax at the time of purchase.
- Net Metering: Be sure to speak to your Commerce utility company about signing a net metering agreement. This allows you to receive credit towards your utility bill every month for the value of excess energy generated by your solar panels. You may receive either a dollar-for-dollar credit or a percentage of the value.
- Tax Credits: Unlike tax deductions, tax credits reduce, dollar-for-dollar, the amount of income tax that you owe the government.
Federal Solar Incentives
Federal solar incentives are likely the first thing that comes to mind when thinking about solar incentives. 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 specific percentage of your solar system's cost.
The ITC applies to solar systems installed after January 1, 2006 on a primary or secondary residence in the United States that you own. Initially, the credit applied to 30% of the total cost — for panels, equipment, labor and accessories — although that amount may range from 26-30%, depending on when your solar project was undertaken. There is no cap on the amount you can claim.
To better understand how the ITC might apply to you, speak to your local Commerce solar panel installation expert and request more information.
The Inflation Reduction Act, passed in August 2022, made some changes to the ITC (as well as renaming it to the Clean Energy Credit). 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 for 30% of the total cost. This percentage will decrease annually after 2032 until the Clean Energy Credit expires in 2035. Starting in 2023, the expansion to the program will also make it easier to get credit for energy storage systems.
More information about the new Inflation Reduction Act can be found here. To best understand how the new Clean Energy Credit applies to you, get in touch with your local Commerce solar installation expert.
State & Local Solar Incentives
Federal solar incentives are not your only option; tax credits, rebates and more are often offered at the state and local level. The incentives — which might be provided by your county or municipality, or by the state of California — may be offered on an ongoing basis, or for only a limited time.
Next Steps for Installing Solar in Commerce
The nationwide use of solar energy has increased enormously in the past 15 years, in part thanks to the growth in the number of solar incentives. You might receive these incentives from your local utility company, the California government or the federal government. We suggest talking to your local Commerce solar installation company for more information about these incentives and to be sure that you're getting the most money possible for your solar panels.
EcoWatch's Commerce, CA Solar Incentives FAQs
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