2023 Solar Incentives Guide for Costa Mesa, CA - Tax Credits & Rebates
In this guide, we'll cover the latest solar incentives and rebates available in Costa Mesa.
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 Costa Mesa?
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 are meant to help mitigate the cost of installing a solar panel system on your home. This category of financial incentives is designed to encourage more people to convert their home partially or fully to renewable energy. Incentives may include things like discounts, cash back or credit towards your monthly utility bill. Some incentives are handled federally, while others are handled by the state of California or your specific utility company, county or municipality. Categories of solar incentives include:
- Tax Credits: These credits are dollar-for-dollar reductions (not deductions) in how much income tax you owe the government.
- Tax Exemptions: Your solar panels might qualify for exemptions on both sales and property tax. Sales tax exemptions are applied at the time of purchase. Property tax exemptions let you ignore the value that solar panels add when calculating property taxes on your home.
- Solar Renewable Energy Certificate (SREC): Generally, solar systems that produce more than a specified (normally small) amount of electricity will qualify for SRECs or other performance-based incentives. SRECs and the like are typically provided at the state level. You can sell SRECs to your utility company or another buyer, and generally the money you make is normally considered part of your taxable income.
- Rebates: Some solar companies will help you claim a rebate, or partial refund of your purchase, for your solar panels. Counties or states will also sometimes offer limited-time rebates. The value of a rebate will usually be deducted from the total price before any tax credits are calculated.
- Net Metering: Net metering factors in once your solar system is up and running. If you have a net metering agreement with your Costa Mesa utility company, it will subtract the value of the excess energy your solar system produces from your monthly utility bill. In some places, this is a dollar-for-dollar credit, while in other places you may make back a percentage of the value.
Federal Solar Incentives
Federal solar incentives are probably the first thing that comes to mind when you think about solar incentives. It's likely that you've heard of the Federal Solar Investment Tax Credit, or ITC. The ITC is a tax credit that reduces your taxes by a specified percentage of the money you spend installing solar panels.
The ITC initially applied to 30% of the total cost of solar system installation, although it has fluctuated slightly over time between 26-30%. The percentage you qualify for will depend on when your solar system was installed. The total cost of installation includes the panels themselves as well as the cost of equipment, accessories and labor. There is no maximum amount you can claim. The ITC can be applied to solar panels installed after January 1, 2006 on your primary or secondary residence. The residence must be in the United States and owned by you.
Have questions about how the ITC applies to your specific situation? Reach out to your local Costa Mesa solar panel installation expert to get more information.
In August 2022, the ITC (now referred to as the Clean Energy Credit) was bolstered by the passing of the Inflation Reduction Act. The Clean Energy Credit re-raises the credit up to 30% for solar installations undertaken between January 1, 2022 and December 31, 2032. After this, the credit percentage will decrease slightly each year until the program expires in 2035. The program expansion 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, reach out to your local Costa Mesa solar installers.
State & Local Solar Incentives
There are more than just federal solar incentives; rebates, tax credits and more are often offered at the state and local level. These solar incentives — which might be given by the state of California, or by your county or municipality — may be offered on an ongoing basis, or for only a limited time.
Next Steps for Installing Solar in Costa Mesa
The large number of solar incentives available has helped tremendously increase the nationwide adoption of solar energy over the past 15 years. You may receive solar incentives from your local utility company, the federal government or the California government. Your local Costa Mesa solar panel installation company can give you more information about which incentives you can apply for, and get you feeling good about making the change to renewable energy today.
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 Costa Mesa, CA Solar Incentives FAQs
Can I receive any incentives when I add solar panels to a vacation home, rental property or commercial property?
Many solar incentives apply to a property located within the United States that you own; most secondary residences will fall under this distinction. There may be other solar incentives available for commercial properties, depending on the specifics. We recommend getting in touch with your local solar installer and/or tax professional to best understand what incentives will apply to your specific situation.
How can I find out if I qualify for specific solar incentives?
It's a smart idea to get in touch with your local Costa Mesa solar installer to get an understanding of which incentives your project may qualify for. In most cases, solar incentives apply to new solar panel systems installed on property you own (in the U.S.) between the dates specified by the incentive. Some incentives, such as those offered by the government of California, may have additional requirements.
If I installed solar panels on my house a few years ago, can I still claim incentives?
You should plan to talk to a representative from the company that installed your system — or reach out to a local Costa Mesa solar installer — to clarify which incentives you may qualify for. If your system was installed after January 1, 2022, you likely qualify for the newly increased 30% tax credit under the Inflation Reduction Act. Solar systems installed between 2006 and 2021 may qualify for a tax credit of 26-30%.
How much can I save on my electric bill annually if I add solar panels to my Costa Mesa home?
After adding solar panels to your Costa Mesa home, you can anticipate savings of approximately $1,301.50 per year, or approximately $24,728.56 over the next 20 years.
When does the federal solar tax credit end?
The Clean Energy Credit (formerly called the federal solar tax credit, or ITC), currently ends on January 1, 2035. Currently set at 30%, the credit will drop to 26% in 2033 and to 22% in 2034.
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.