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
Solar installers are experts in maximizing your solar tax credits and rebates.
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Updated March 14, 2023
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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
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 encourage people to make the switch to renewable energy by providing financial incentives meant to lower the burden of solar panel installation and use. You might qualify for different types of incentives, including cash back, discounts or monthly utility bill credits, depending on your situation. Certain incentives come from your specific utility company, county or municipality, some from the state of California and others from the federal government. You might qualify for any of the following types of solar incentives:
- Rebates: Solar rebates can be offered by your local utility company, or by your county or state. These rebates work as partial refunds that are applied after your purchase of a solar system and before tax credits are calculated.
- Net Metering: You may be able to sign a net metering contract with your Downey utility company, that may 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 utility bill each month.
- Tax Exemptions: Tax exemptions may come in two forms. First, there is sales tax exemption, applied at the time you purchase your solar panels. The second is property tax exemption, which allows you to ignore the value added by your solar system when calculating property tax for your house.
- Solar Renewable Energy Certificate (SREC): SRECs can be sold to your utility company (or other buyers) for cash that typically becomes part of your taxable income. Typically, there is a small threshold of energy production to meet before your solar system is eligible for SRECs or other performance-based incentives. Incentives like these are generally handled at the state level.
- Tax Credits: These credits are dollar-for-dollar reductions (not deductions) in how much in taxes you owe the government.
Federal Solar Incentives
When thinking about solar incentives, you likely think of federal incentives first. A federal incentive many people are likely to be familiar with is the Federal Solar Investment Tax Credit (ITC). This is a tax credit for a certain percentage of your solar system's cost.
The ITC applies towards solar systems installed after January 1, 2006 and lets you deduct from your taxes a percentage of the total cost of solar panels, accessories, labor and equipment. This credit can be claimed on solar panels installed on a primary or secondary residence that you own in the United States. The original claim amount was 30% of the total cost, although depending on when the project was completed, your credit may range from 26-30%. There is no maximum claim amount.
Contacting your local Downey solar panel installation expert is the best way to learn more about how the ITC could apply to you.
The Inflation Reduction Act, passed in August 2022, expanded and extended the ITC (as well as retitling it 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 expires in 2035. Starting in 2023, the program expansion will also make it easier to get credit for energy storage systems.
Click here to learn more about the new Inflation Reduction Act. Your local Downey solar panel company is the best resource for answering your questions regarding the new Clean Energy Credit and how it will apply to you.
State & Local Solar Incentives
Rebates, tax credits and more might be provided at multiple levels. In addition to federal solar incentives, there are often state and local ones as well. Incentives may be offered by your county or municipality, or by the state of California. Certain incentives are available for only a limited time, while others are ongoing.
Next Steps for Installing Solar in Downey
The variety of available solar incentives has helped tremendously increase the nationwide adoption of solar energy over the last 15 years. You can get solar incentives from the federal government, the California government or from your local utility company. If you're ready to make the switch to solar energy, reaching out to your local Downey solar panel installation expert is an excellent place to start.
Best Regional Coverage
Momentum Solar
- Great warranty coverage
- Representatives are experts on local policies
- Concierge service ensures steady communication
- Slightly limited service offerings
Best Technology
Tesla Energy
- Price-match guarantee
- Sleek, efficient, and durable solar panels
- Best solar battery on the market
- Some reported issues with customer service
- Customer service varies by local dealer
EcoWatch's Downey, CA Solar Incentives FAQs
How can I find out if I qualify for different solar incentives?
It's a smart idea to get in touch with your local Downey solar installer to get an understanding of which incentives your project will qualify for. Usually, solar incentives apply to new solar panel systems installed on a property you own (in the U.S.) within a specified date range. Some incentives, such as those given by the state of California, may have additional requirements.
How much can I save annually on my electric bill if I install solar panels on my house in Downey?
Once you add solar panels to your Downey home, you can expect to save around $1,317.57 per year, or around $25,033.85 over 20 years.
What are the environmental benefits of switching to solar?
Solar energy is a renewable energy source — by changing where you get your energy, you help lessen the strain on our planet's resources. Solar panels can also reduce the CO2 emissions from your home by 250 pounds annually, or roughly 5,000 pounds over 20 years.
If I trade in my appliances for ones that utilize solar energy, are there any incentives that I can claim?
The recently passed Inflation Reduction Act provides a number of incentives designed to reward homeowners who make 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 use solar and another type of renewable energy in combination to power my home?
Yes, you can employ multiple types of renewable energy to power your home — for example, a combination of wind and solar. You can also use both renewable energy sources and a non-renewable backup source of energy. You should discuss your proposed plan with your local Downey solar panel installer, to make sure you know what you'll need and what types of 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.