2023 Solar Incentives Guide for Downey, CA - Tax Credits & Rebates
In this guide, we'll cover the latest solar incentives and rebates available in Downey.
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 Downey?
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
Solar incentives encourage people to make the switch to renewable energy by providing financial incentives meant to lower the burden of solar panel installation and use. The incentives could include upfront discounts, cash back or credit towards your monthly utility bill. Some incentives are handled by the federal government, some by the California government and some by your specific utility company, county or municipality. Some broad categories of solar incentives include:
- Solar Renewable Energy Certificate (SREC): Typically, solar systems that produce over a threshold (usually small) amount of electricity will qualify for SRECs or other performance-based incentives. SRECs and similar incentives are typically provided at the state level. When you receive an SREC, you can sell it to your utility company or another buyer, and generally the money you make is normally considered part of your taxable income.
- Tax Credits: Tax credits are dollar-for-dollar reductions that lower the amount of income tax you owe the government. (This is different from a tax deduction.)
- Rebates: Rebates, or partial refunds after a purchase, are usually applied prior to any solar tax credits being calculated. These rebates might be offered by your local utility company, by your state or by your county.
- Tax Exemptions: Your solar panels could qualify for exemptions on both sales and property tax. Sales tax exemptions are effective at the time of purchase. Property tax exemptions let you ignore the value that solar panels add when you are calculating property taxes on your home.
- Net Metering: Net metering is an incentive you can get once your solar system is up and running. If you've signed a net metering agreement with your Downey 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 areas you might receive a refund equivalent to a percentage of the value.
Federal Solar Incentives
Federal incentives are the type of incentives that you are most likely to have heard of. The solar incentive that you're most familiar with is probably the Federal Solar Investment Tax Credit (ITC), which gives you a credit on your taxes equal to a predetermined percentage of your solar system's cost.
The ITC is applied to the total cost of installing solar panels, including the panels themselves as well as equipment, labor and accessories. This credit can be claimed for panels installed after January 1, 2006 on a primary or secondary residence that you own, as long as it 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 amount you can claim.
To more fully understand how the ITC will apply to your situation, call your local Downey solar panel installation expert and request more information.
In August 2022, the ITC (now titled the Clean Energy Credit) was expanded and extended by the passing of the Inflation Reduction Act. The new Clean Energy Credit now runs until 2035. American homeowners are now eligible for a 30% credit for solar systems installed between January 1, 2022 and December 31, 2032. The credit will then decrease annually until it expires. Starting in 2023, the expansion will also make credits for energy storage systems even easier to claim.
Click here to learn more about the new Inflation Reduction Act. To best understand how the new Clean Energy Credit might apply to you, get in touch with your local Downey solar installation expert.
State & Local Solar Incentives
Some solar incentives may be provided by state and local governments. As with federal incentives, these may include rebates, tax credits and more. Certain incentives are ongoing, while others are available for a limited time. Incentives may be offered by your county or municipality, or by the California government.
Next Steps for Installing Solar in Downey
The variety of solar incentives available has contributed greatly to the increase in the adoption of solar energy nationwide over the last 15 years. You might qualify for solar incentives from your local utility company, the federal government or the California government. When you're prepared to make the switch to solar energy, talking to your local Downey solar panel installation expert is a great first step.
EcoWatch's Downey, CA Solar Incentives FAQs
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