2023 Solar Incentives Guide for Durham, CA - Tax Credits & Rebates
In this guide, we'll cover the latest solar incentives and rebates available in Durham.
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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By EcoWatch Local Advisors
Data Analysis: James Savino
Ranking Methodology: Karsten Neumeister
Updated May 04, 2023
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What Solar Tax Credits, Incentives, and Rebates are Available in Durham?
Property Tax Exclusion for Solar Energy Systems and Solar Plus Storage System
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 are designed to make renewable energy usage more affordable via financial incentives to help people install solar panels on their homes. You may qualify for various types of incentives, such as discounts, cash back or monthly utility bill credits, depending on your situation. Some incentives come from your specific utility company, county or municipality, some from the state of California and others from the federal government. Some broad categories of solar incentives include:
- Tax Credits: Tax credits are dollar-for-dollar reductions in the amount of income tax that you owe the government. (A tax credit is different from a tax deduction.)
- Rebates: A rebate is a partial refund credited to your account after you've paid for your solar panels. These might be offered by your local utility company, your county or your state. The cash back that you get from the rebates is normally applied before calculating tax credits.
- Net Metering: Don't forget to talk with your Durham utility company about signing a net metering agreement. 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 Exemptions: Your solar system might qualify for both sales tax and property tax exemptions. Sales tax exemptions are effective at the time of purchase. Property tax exemptions allow you to exclude the value that solar panels add when calculating property taxes on your home.
- Solar Renewable Energy Certificate (SREC): In general, solar systems that produce over a specific (generally small) amount of electricity can qualify for SRECs or similar performance-based incentives. SRECs and similar incentives are typically offered by your state government. You can sell SRECs to your utility company or another buyer, and this is usually considered part of your taxable income.
Federal Solar Incentives
Federal incentives are the kind of incentives that you are most likely to have some familiarity with. 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 given percentage of the cost of your solar system.
The ITC can be applied 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, accessories and labor — although it may range from 26-30%, depending on when your solar project was undertaken. There is no cap on the claim amount.
Talking to your local Durham solar panel installer is the best way to understand how the ITC may apply to your situation.
In August 2022, the Inflation Reduction Act laid out new provisions for the ITC, now referred to as the Clean Energy Credit. The Clean Energy Credit bolsters the current credit, increasing it up to 30% for solar systems installed between 2022 and 2032. At this point, the credit percentage will be reduced slightly each year until the program expires in 2035. The program expansion also makes it easier to get credit for energy storage systems, starting in 2023.
More information about the new Inflation Reduction Act can be found here. To understand how the new Clean Energy Credit applies to you, talk to your local Durham solar installation expert.
State & Local Solar Incentives
Some solar incentives may be provided at the state and local level. Similar to federal incentives, these can include tax credits, rebates and more. Certain incentives are offered for only a limited time, while others are ongoing. Your local solar incentives could come from the California government, or from your specific county or municipality.
Next Steps for Installing Solar in Durham
Nationwide solar energy use has gone up tremendously in the past 15 years, in part due to the increase in availability of solar incentives. You might receive these incentives from the California government, the federal government or your local utility company. We suggest talking to your local Durham solar installation company for more information about these incentives and to make sure that you're getting the most money possible for your solar panels.
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EcoWatch's Durham, CA Solar Incentives FAQs
Can I receive any incentives when I add solar panels to a rental property, vacation home or commercial property?
While we recommend speaking with your local solar installer and/or tax professional to better understand what solar incentives apply to you, many will apply to a second home, provided that it is in the United States and owned by you. There may be additional incentives available specifically for commercial properties, depending on the details.
I already have solar panels installed. Do I qualify for any incentives?
Your best bet is to talk to the company that installed your solar panels — or reach out to a local Durham solar installer — to learn about which incentives you might qualify for. If your system was installed after January 1, 2022, you likely qualify for the recently increased 30% tax credit under the Inflation Reduction Act. Systems installed between 2006 and 2021 may qualify for a tax credit of 26-30%.
How much can I save on my electric bill annually if I install solar panels on my Durham home?
After adding solar panels to your Durham home, you can expect to save around $1,677.29 per year, or around $31,868.45 over 20 years.
What are the best solar panel installation companies near me?
To find the best solar panel installer in your area, check out our guide to the best solar companies in Durham.
I want to trade in my old appliances for ones that are more energy-efficient. Are there any incentives I can claim?
Under the new Inflation Reduction Act, there are a variety of new financial incentives that are available when you make eco-friendly improvements to your home. More details regarding these incentives, including information about incentives for purchasing new appliances, can be found here.
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.