2023 Solar Incentives Guide for Davis, CA - Tax Credits & Rebates
In this guide, we'll cover the latest solar incentives and rebates available in Davis.
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 Davis?
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 implemented by the government and by solar companies to encourage the adoption and use renewable energy by making installing and using solar panels more affordable. Solar incentives could include upfront discounts, cash back or monthly credits towards your utility bill. Some incentives are handled by the federal government, some by the California government and some by your utility company, county or municipality. Categories of solar incentives include:
- Rebates: Your solar installer might help you claim a rebate, or partial refund after 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 your total price before tax credits are calculated.
- Solar Renewable Energy Certificate (SREC): SRECs and similar performance-based incentives are usually handled by your state government. Once your solar system meets the threshold (typically a small amount of energy production), you are eligible to receive SRECs that you can then sell to your utility company or other buyers. The money you receive is generally considered part of your taxable income.
- Tax Exemptions: Your solar system may qualify for both sales tax and property tax exemptions. Sales tax exemptions come into effect at the time of purchase. Property tax exemptions allow you to ignore the value added by your solar panels when calculating property taxes on your house.
- Net Metering: Don't forget to talk with your Davis utility company about signing a net metering contract. This will allow you to get a credit towards your monthly utility bill 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.
- Tax Credits: Different from tax deductions, tax credits reduce, dollar-for-dollar, the amount of income tax that you owe the federal government.
Federal Solar Incentives
Federal incentives are the kind of incentives that you are most likely to have some familiarity with. It's likely that you've heard of the Federal Solar Investment Tax Credit, or ITC. The ITC is a tax credit equal to a certain percentage of the money you spend on your solar system.
The ITC applies to the total cost of solar panel installation, including the panels themselves as well as equipment, labor and accessories. You can claim this credit for panels installed after January 1, 2006 on a primary or secondary residence that you own and that is located in the United States. Originally set at 30% of total costs, the credit has fluctuated over time, and you may qualify for different amounts depending on when your project was completed. There is no maximum claim amount.
To better understand how the ITC may apply to you, reach out to your local Davis solar panel installer and request more information.
In August 2022, the ITC (now titled the Clean Energy Credit) was bolstered by the passing of the Inflation Reduction Act. The new Clean Energy Credit now runs until 2035. Homeowners can now apply for a 30% credit for solar systems that began installation on or after January 1, 2022 and will be done by December 31, 2032. This credit will then decrease annually until its expiration. The expansion to the program also makes credits for energy storage systems even easier to claim, starting in 2023.
More information about the new Inflation Reduction Act can be found here. The best way to fully understand how the new Clean Energy Credit might apply to you is to speak with your local Davis solar panel installers directly.
State & Local Solar Incentives
Some solar incentives are often also offered at the local or state level. As with federal incentives, these may include rebates, tax credits and more. Incentives might be offered by the state of California, or by your county or municipality. Some incentives are available for only a limited time, while others are ongoing.
Next Steps for Installing Solar in Davis
You can receive solar incentives from the federal government and the California government, as well as from your local utility company. Growing availability of solar initiatives in the past 15 years has helped greatly increase nationwide adoption of solar energy. Contact your local solar panel installation company today to discover more about the various programs and to save the most money possible on a solar system for your Davis home.
EcoWatch's Davis, CA Solar Incentives FAQs
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