2024 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 2024 and beyond)
- Ways to optimize your solar investment
Solar installers are experts in maximizing your solar tax credits and rebates.
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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 propertyThe 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 encourage homeowners to switch their home over to renewable energy by offering incentives that lower the financial burden of solar panel installation and use. Different types of incentives, including discounts, cash back or credit towards your monthly utility bill, might be available to you. Some incentives may be offered by the California government, by your utility company or by county or municipality, while other incentives are federal. Some broad categories of solar incentives include:
- Solar Renewable Energy Certificate (SREC): Generally, solar systems that produce more than a predetermined (normally small) amount of electricity can qualify for SRECs or other performance-based incentives. SRECs and performance-based incentives in general are typically offered by your state government. 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.
- Net Metering: Net metering becomes relevant after your solar system is up and running. If you've signed a net metering agreement with your Downey utility company, the company will subtract the value of the excess energy your solar system produces from your monthly utility bill. In some areas, this credit is dollar-for-dollar, while in others you may receive a refund equivalent to a percentage of the value.
- Tax Credits: Unlike tax deductions, tax credits reduce, dollar-for-dollar, the amount of income tax that you owe the government.
- Rebates: Rebates, or cash back after a purchase, are typically applied before any solar tax credits are calculated. Rebates may be provided by your local utility company, by your county or by your state.
- Tax Exemptions: Sales tax exemptions are applied at the time of purchase for your solar panels. Property tax exemptions allow you to exclude the added value of your solar system when you calculate the amount of property tax you need to pay on your house.
Best National Provider
SunPower
- Most efficient panels on the market
- National coverage
- Cradle to Cradle sustainability certification
- Great warranty coverage
- Expensive
- Customer service varies by local dealer
Best Regional Coverage
Momentum Solar
- Great warranty coverage
- Representatives are experts on local policies
- Concierge service ensures steady communication
- Slightly limited service offerings
Best for Leasing
Sunrun
- Expansive service area
- Many financing options
- Some reported issues with customer service
- Some reported issues with door-to-door sales
Federal Solar Incentives
When people think of solar incentives, federal incentives may be the first thing that comes to mind. A federal incentive many people are probably familiar with is the Federal Solar Investment Tax Credit (ITC). The ITC is a tax credit for a specific percentage of your solar system's cost.
The ITC applies towards solar systems installed after January 1, 2006, and allows you to deduct from your taxes a percentage of the total cost of solar panels, labor, equipment and accessories. This credit can be claimed on a solar panel system installed on a primary or secondary residence in the United States that you own. The original amount you could claim was 30% of the total cost, although certain projects may qualify for only 26%, depending on the details. There is no maximum claim amount.
To best understand how the ITC might apply to your situation, contact your local Downey solar panel installer and ask for more information.
In August 2022, the Inflation Reduction Act expanded and extended the ITC, now referred to as the Clean Energy Credit. The new Clean Energy Credit extends until 2035. American homeowners can now receive a 30% credit for solar systems installed between January 1, 2022, and December 31, 2032. This credit will then decrease annually until the date of expiration. Starting in 2023, the expansion will also make it easier to get credit for energy storage systems.
More information about the new Inflation Reduction Act can be found here. Your local Downey solar panel installer can answer any questions you have and explain how the new Clean Energy Credit may apply to you.
State & Local Solar Incentives
Some solar incentives may be provided by state and local governments. Like with federal incentives, these may include tax credits, rebates and more. These incentives — which may be handled by the state of California, or by your county or municipality — may be offered for only a limited time, or on an ongoing basis.
Next Steps for Installing Solar in Downey
Solar incentives might be provided by the California government, the federal government or your local utility company. The growing number of incentives available has helped nationwide use of solar energy increase greatly in the last 15 years. It is a good idea to talk to your local Downey solar installation company to learn more about these incentives and to make sure that you're getting the most money possible for your solar system.
EcoWatch's Downey, CA Solar Incentives FAQs
How much will solar panels save me annually on my electric bill in Downey?
On average, homeowners in Downey who install solar panels save approximately $1,317.57 per year, or approximately $25,033.85 over 20 years after they make the switch.
Who installs solar panel systems near me?
To discover the top solar panel installers near you, read our article on the best solar companies in Downey.
What are the environmental benefits of switching to solar?
You can reduce your carbon footprint by 250 pounds of CO2 annually by installing solar panels. This adds up to roughly 5,000 pounds in 20 years. In addition, solar power is a renewable energy source, which means that switching your home over reduces the drain on our planet's resources.
When does the federal solar tax credit end?
The federal solar tax credit, formerly called the ITC and now titled the Clean Energy Credit, is slated to end on January 1, 2035. The current 30% credit will end in 2032, replaced by a 26% credit in 2033 and a 22% credit in 2034.
Can I get any financial 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 fall into this category. Other solar incentives may be available for commercial properties, depending on the specifics. We recommend speaking with your local solar installer and/or tax professional to better understand what incentives apply to your specific situation.
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.