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 September 15, 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 intended to make renewable energy usage more affordable via financial incentives to help people install solar panels on their homes. Incentives could include things like discounts, cash back or monthly utility bill credits. Some incentives are offered by the federal government, while others are provided by the state of California or your specific utility company, county or municipality. Categories of solar incentives include:
- Tax Exemptions: These might come in the form of property tax exemptions, which allow you to ignore the value of your solar system when paying taxes on your house. You may also qualify for an exemption on sales tax at the time of purchase.
- Tax Credits: Tax credits decrease, dollar-for-dollar, the total amount of tax you owe the government. Tax credits differ from tax deductions.
- Net Metering: You can sign a net metering agreement with your Costa Mesa utility company that will apply to all or a percentage of the excess electricity that is generated by your solar panels. Your utility company will then deduct this value from your monthly utility bill.
- Rebates: Some solar companies will 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 come off the total price before any tax credits are calculated.
- Solar Renewable Energy Certificate (SREC): SRECs and other similar performance-based incentives are typically handled at the state level. Once your solar system meets the threshold (usually a small amount of energy production), you can receive SRECs that can then be sold to your utility company or other buyers. The money you make is generally considered part of your taxable income.
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Federal Solar Incentives
When thinking about solar incentives, you probably think of federal incentives first. The Federal Solar Investment Tax Credit, or ITC, is the most well-known federal solar incentive. The ITC provides a tax credit for a set percentage of the cost of your solar system.
The ITC applies to solar panels installed on your primary or secondary residence in the United States. The solar panels have to have been installed after January 1, 2006 on a property you own for you to be eligible for the credit. The ITC initially covered 30% of all installation costs (panels, accessories, labor and equipment), although this amount has fluctuated slightly over time 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.
To better understand how the ITC could apply to you, contact your local Costa Mesa solar panel installer and request more information.
In August 2022, the Inflation Reduction Act expanded and extended the ITC, now called the Clean Energy Credit. With the new provisions, solar installation projects started after January 1, 2022 and completed by the end of 2032 might qualify for a 30% tax credit. The amount of the credit will then see a slight annual decrease until the end of the current Clean Energy Credit 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. To understand how the new Clean Energy Credit applies to you, talk to your local Costa Mesa solar installers.
State & Local Solar Incentives
In addition to federal solar incentives, there are often also state ones. Rebates, tax credits and more might be available at a more local level. Some incentives are ongoing, while others might only be available for a limited time. Incentives may be offered by the California government, or by your county or municipality.
Next Steps for Installing Solar in Costa Mesa
Solar incentives may be provided by the federal government, the California government or your local utility company. The growing number of available solar incentives has contributed to a large increase in solar energy use in the last 15 years. It is a good idea to talk to your local Costa Mesa solar installation expert to learn more about these incentives and to make sure that you're getting all of the money you can for your solar panels.
EcoWatch's Costa Mesa, CA Solar Incentives FAQs
How can I learn if I qualify for solar incentives?
It's a smart idea to get in touch with your local Costa Mesa solar installer for a better understanding of which incentives your project will qualify for. In most cases, solar incentives apply to new solar systems installed on a property you own (in the U.S.) within a specified date range. Some incentives, like those provided by the California government, may have additional requirements.
My home already has solar panels. Does my system qualify for any 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%.
I want to change out my appliances for ones that are more energy-efficient. Are there any benefits I can claim?
The new Inflation Reduction Act provides multiple incentives that reward homeowners for making eco-friendly upgrades. Some of these incentives include tax credits and rebates for installing new electric appliances. You can find more details about these incentives here.
Can I claim incentives both towards the initial cost of solar panels, and later as reimbursement?
Yes, you can claim both tax credits and rebates towards the cost of solar panels. Depending on which incentives you are claiming, they may apply in a different order. Make sure that you talk to your solar installer or a local tax professional to confirm that you are claiming incentives correctly and that you're getting the most money you can.
Can I use solar and another type of renewable energy in combination to power my home?
Yes, you can use multiple types of renewable energy to power your home, such as a combination of solar and wind power. You can also combine renewable energy generation with a backup source of non-renewable energy. You should discuss the details of your plan with your local Costa Mesa solar installation expert, to make sure you know what you'll need and what incentives 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.