2023 Solar Incentives Guide for Cudahy, CA - Tax Credits & Rebates
In this guide, we'll cover the latest solar incentives and rebates available in Cudahy.
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 Cudahy?
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" includes a range of financial incentives designed to make installing and using solar panels more affordable. This is done to encourage people to switch to renewable energy. Incentives can include things like discounts, cash back or credit towards your monthly utility bill. Some incentives are offered by the federal government, while others are offered by the state of California or by your specific utility company, county or municipality. Types of solar incentives might include:
- Tax Exemptions: These may come in the form of property tax exemptions, which can let you ignore the value of your solar system when paying property tax on your house. They may also include exemptions on sales tax at the time of purchase.
- Rebates: Rebates, or cash back after a purchase, are normally given before any solar tax credits are calculated. These rebates may be offered by your local utility company, by your state or by your county.
- Tax Credits: Different from tax deductions, tax credits reduce, dollar-for-dollar, the amount of income tax that you owe the federal government.
- Net Metering: Make sure you speak with your Cudahy utility company about signing a net metering contract. This will allow you to receive credit towards your utility bill every month for the value of excess energy your solar panels generate. You might receive either a dollar-for-dollar credit or a percentage of the value.
- Solar Renewable Energy Certificate (SREC): SRECs and similar performance-based incentives are usually handled at the state level. Once your solar system meets the qualification threshold (usually a small amount of energy production), you are eligible to receive SRECs that can then be sold to your utility company or other buyers. The money you make from the sale is generally considered part of your taxable income.
Federal Solar Incentives
Federal solar incentives are likely to be the first thing that comes to mind when thinking about solar incentives. The Federal Solar Investment Tax Credit, or ITC, is the best-known federal solar incentive. The ITC provides 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 that you own in the United States. 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 the installation date of your solar system. There is no cap on the amount you can claim.
Your local Cudahy solar panel installer can give you more information about the ITC and how it may apply to your situation.
The ITC has been renewed and expanded following the passage of the Inflation Reduction Act in August 2022. It's also now called the Clean Energy Credit. 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. The percentage will then decrease annually until the Clean Energy Credit ends in 2035. Beginning in 2023, it will also be easier to obtain credits for energy storage systems under the new laws.
Click here to learn more about the new Inflation Reduction Act. To understand how the new Clean Energy Credit will apply to you, talk to your local Cudahy solar installers.
State & Local Solar Incentives
Some solar incentives are often also offered at the local or state level. Like with federal incentives, these could include tax credits, rebates and more. Some incentives are ongoing, while others are offered for only a limited time. These local incentives may come from your county or municipality, or from the California government.
Next Steps for Installing Solar in Cudahy
The expanding number of available solar incentives has helped tremendously increase the use of solar power nationwide over the last 15 years. You might qualify for solar incentives from the federal government, the California government or from your local utility company. It is a good idea to talk to your local Cudahy solar installation company to learn more about these incentives and to ensure that you're getting all of the money you can for your solar panels.
EcoWatch's Cudahy, CA Solar Incentives FAQs
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