2023 Solar Incentives Guide for Compton, CA - Tax Credits & Rebates
In this guide, we'll cover the latest solar incentives and rebates available in Compton.
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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Updated March 14, 2023
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What Solar Tax Credits, Incentives, and Rebates are Available in Compton?
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
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 help mitigate the cost of installing a solar panel system on your home. Financial incentives like these are in place to encourage more homeowners to switch their home over to renewable energy. You might be eligible for several types of incentives, including discounts, cash back or credit towards your monthly utility bill, 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. Some broad categories of solar incentives include:
- Tax Exemptions: Sales tax exemptions are effective at the point of sale for your solar panels. Property tax exemptions let you exclude the value added by your solar system when you calculate how much property tax you need to pay on your house.
- Rebates: Your solar installer might help you claim a rebate, or partial refund of your purchase, for your solar panels. States or counties will also offer limited-time rebates at various times. Any rebates you receive will usually be deducted from the total price before tax credits are calculated.
- Tax Credits: Tax credits are dollar-for-dollar reductions in the amount of income tax that you owe the government. (This is different from a tax deduction.)
- Solar Renewable Energy Certificate (SREC): SRECs can be sold to your utility company (or other buyers) for money that is generally considered part of your taxable income. Generally, you must meet a certain (small) threshold of energy production before your solar system can earn SRECs or other performance-based incentives. Incentives like these are typically handled by your state government.
- Net Metering: Net metering is an incentive you can get once your solar panels are up and running. If you have a net metering agreement with your Compton utility company, the company will subtract the value of the excess energy your solar system produces from your utility bill each month. In some places, this is a dollar-for-dollar credit, while in other areas you might receive a refund equivalent to a percentage of the value.
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 likely the best-known federal solar incentive. The ITC provides a tax credit for a predetermined percentage of your solar system's cost.
The ITC applies to the value of solar panels installed on your primary or secondary residence in the United States. The solar panels must have been installed on a property you own after January 1, 2006 for you to be eligible for the credit. The ITC originally paid out 30% of all installation costs (panels, labor, accessories and equipment), although the covered amount has fluctuated over the last few years between 26-30%. The installation date of your solar system will determine what percentage you are eligible for. There is no cap on the claim amount.
Your local Compton solar panel installation expert can give you more information about the ITC and how it may apply to your situation.
In August 2022, the ITC (now referred to as 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. This percentage will decrease annually after 2032 until the Clean Energy Credit ends in 2035. Starting in 2023, the expansion 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 fully understand how the new Clean Energy Credit might apply to you, get in touch with your local Compton solar installation expert.
State & Local Solar Incentives
There are often also state solar incentives in addition to those provided by the federal government. Tax credits, rebates and more might be available at a more local level. These incentives may be given out by the California government, or by your county or municipality. Some incentives may be available for a limited time, while others are ongoing.
Next Steps for Installing Solar in Compton
Solar incentives may be provided by your local utility company, the federal government or the California government. The growing number of solar incentives available has helped nationwide use of solar energy increase greatly in the last 15 years. It is a good idea to talk to your local Compton solar installer to learn more about these incentives and to ensure that you're getting the most money possible for your solar panels.
Best Regional Coverage
Momentum Solar
- Great warranty coverage
- Representatives are experts on local policies
- Concierge service ensures steady communication
- Slightly limited service offerings
Best Technology
Tesla Energy
- Price-match guarantee
- Sleek, efficient, and durable solar panels
- Best solar battery on the market
- Some reported issues with customer service
- Customer service varies by local dealer
EcoWatch's Compton, CA Solar Incentives FAQs
Can I claim incentives for adding solar panels to a rental property, vacation home or commercial property?
Many solar incentives are intended to apply to a property you own that is located within the United States; most secondary residences fall into this category. There may be other solar incentives available for commercial properties, depending on the details. We recommend talking to your local solar installer and/or tax professional to best understand what incentives may apply to your specific situation.
What are the environmental benefits of switching to solar?
You can decrease your carbon footprint by 250 pounds of CO2 a year when you switch to solar panels. This adds up to roughly 5,000 pounds over 20 years. In addition, solar power is a renewable energy source, which means that making the switch lessens the drain on our planet's resources.
When does the federal solar tax credit end?
The federal solar tax credit, previously called the ITC and now named the Clean Energy Credit, is slated to end January 1, 2035. The current 30% credit will end in 2032, replaced by a 26% credit in 2033 and a 22% credit in 2034.
Can I claim incentives both towards the up-front cost of solar panels, and later as reimbursement?
Yes, you can claim both tax credits and rebates towards the cost of your solar panels. Depending on which incentives you are claiming, they may apply in a different order. Be sure to speak with your solar installer or a local tax professional to ensure that you are claiming incentives correctly and that you're getting the most money possible.
Can I use a combination of multiple types of renewable energy to power my home?
You can power your home with multiple types of renewable energy, or a combination of renewable and non-renewable energy. Make sure you discuss your plan with your local Compton solar installer. They can help you with the plan for your project and give you an understanding of various incentives that you will or won't 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.