2023 Solar Incentives Guide for Freedom, CA - Tax Credits & Rebates
In this guide, we'll cover the latest solar incentives and rebates available in Freedom.
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 Freedom?
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 broadly to financial incentives that are in place to encourage people to use renewable energy by making the installation and use of solar panels more affordable. The incentives may include upfront discounts, cash back or credit towards your monthly utility bill. Some incentives are handled by the federal government, some by the state of California and some by your utility company, county or municipality. Some broad categories of solar incentives include:
- Rebates: Rebates, or cash back after a purchase, are usually given before any solar tax credits are calculated. These rebates can be given by your local utility company, by your county or by your state.
- Solar Renewable Energy Certificate (SREC): SRECs and other performance-based incentives might be available to you if your solar system produces more than a specified (typically small) amount of electricity. This category of incentives is typically handled by the state government. You can sell any SRECs you have to your utility company or other buyers, and the money you receive in return is typically considered part of your taxable income.
- Tax Credits: These credits are dollar-for-dollar reductions (not deductions) in how much in taxes you owe the federal government.
- Net Metering: Don't forget to speak to your Freedom utility company about signing a net metering agreement. This allows you to receive credit towards your monthly utility bill for the value of excess energy your solar panels generate. You may receive either a dollar-for-dollar credit or a percentage of the value.
- Tax Exemptions: Sales tax exemptions are effective at the point of sale for your solar panels. Property tax exemptions allow you to ignore the value added by your solar system when you calculate how much property tax you need to pay on your house.
Federal Solar Incentives
Federal incentives are the type of incentives that you are most likely to have some knowledge of. You might have heard of the Federal Solar Investment Tax Credit, or ITC. This incentive is a tax credit that reduces your taxes by a specified percentage of the money you spend installing solar panels.
The ITC can be applied 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, as long as it is located in the United States. The tax credit ranges from 26-30% of total costs depending on when your project was completed. There is no maximum claim amount.
To better understand exactly how much money the ITC could save you, talk to your local Freedom solar panel installer.
In August 2022, the ITC (now referred to as the Clean Energy Credit) was bolstered by the passage of the Inflation Reduction Act. Homeowners are now eligible for a credit equal to 30% of the total solar system installation costs for projects that began after January 1, 2022 and will be finished by the end of 2032. The credit percentage will then begin to decrease yearly until the Clean Energy Credit ends in 2035. The expansion also makes it easier to get credit for energy storage systems, beginning in 2023.
Click here to learn more about the new Inflation Reduction Act. The best way to fully understand how the new Clean Energy Credit will apply to you is to speak with your local Freedom solar panel installers directly.
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, too. These incentives may be handled by the California government, or by your county or municipality. Some incentives may be available for a limited time, while others are ongoing.
Next Steps for Installing Solar in Freedom
There are a variety of solar incentives: those provided by local utility companies, those provided by the federal government and those provided by the California government, to name a few. The use of solar energy has grown enormously in the last 15 years, partially due to these incentives. Talking to your local Freedom solar panel installation company is an excellent first step towards getting all the incentives you qualify for when you switch to solar energy.
EcoWatch's Freedom, CA Solar Incentives FAQs
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