2023 Solar Incentives Guide for Laguna Hills, CA - Tax Credits & Rebates
In this guide, we'll cover the latest solar incentives and rebates available in Laguna Hills.
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 September 15, 2023
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What Solar Tax Credits, Incentives, and Rebates are Available in Laguna Hills?
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 are designed to encourage people to switch their home over to renewable energy by providing incentives that lower the financial burden of solar panel installation and use. Incentives may include things like discounts, cash back or credit towards your monthly utility bill. Some incentives are offered by the federal government, while others are offered by the state of California or by your utility company, county or municipality. Types of solar incentives might include:
- Rebates: Some solar companies will help you claim a rebate, or partial refund after purchase, for your solar system. Counties or states will also offer limited-time rebates at various times. If you receive a rebate, that amount will usually come off your total price before tax credits are calculated.
- Solar Renewable Energy Certificate (SREC): SRECs and other similar performance-based incentives are typically handled at the state level. Once your solar system meets a predetermined threshold (usually a small amount of energy production), you can receive SRECs that can be sold to your utility company or other buyers. The money you make is usually considered part of your taxable income.
- 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 house.
- Net Metering: Net metering factors in after your solar system is up and running. If you have a net metering agreement with your Laguna Hills utility company, the company will subtract the value of the excess energy produced by your solar system from your utility bill each month. In some places, this is a dollar-for-dollar credit, while in others you may get refunded a percentage of the value.
- 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.)
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Federal Solar Incentives
Federal solar incentives are likely the first thing that you think of when thinking about solar incentives. The Federal Solar Investment Tax Credit, or ITC, is likely the most commonly known federal solar incentive. The ITC provides a tax credit for a predetermined percentage of the cost of your solar system.
The ITC can be applied to solar panels installed after January 1, 2006 on a primary or secondary residence in the United States that you own. Initially, the credit applied to 30% of the total cost — for panels, labor, equipment and accessories — although it may range from 26-30%, depending on when your solar project was undertaken. There is no cap on the claim amount.
To more fully understand how the ITC may apply to you, speak to your local Laguna Hills solar panel installer and request more information.
The ITC was renewed and increased in scope after the passage of the Inflation Reduction Act in August 2022. It's also now called the Clean Energy Credit. Now, solar installation projects that are completed between 2022 and 2032 can qualify for a 30% tax credit. This credit amount will then decrease slightly each year until the current Clean Energy Credit expires in 2035. Starting in 2023, it will also be easier to obtain credits for energy storage systems under the new laws.
More information about the new Inflation Reduction Act can be found here. Your local Laguna Hills solar panel company is the best resource for answering your questions about the new Clean Energy Credit and how it will apply to you.
State & Local Solar Incentives
There are more than just federal solar incentives; tax credits, rebates and more may be offered at the state and local level. Certain incentives are ongoing, while others may only be available for a limited time. Solar incentives may be provided by your county or municipality, or by the California government.
Next Steps for Installing Solar in Laguna Hills
There are many kinds of solar incentives: those given by local utility companies, those given by the California government and those given by the federal government, to name a few. The use of solar energy has grown enormously in the last 15 years, partially due to these incentives. When you're prepared to make the switch to solar energy, reaching out to your local Laguna Hills solar panel installation expert is a great first step.
EcoWatch's Laguna Hills, CA Solar Incentives FAQs
How do I learn if I qualify for solar incentives?
In most cases, solar incentives apply to:
- a new solar system
- installed on a property that you own
- within the U.S.
- between the dates specified by a particular incentive.
Specific incentives, including ones handled by the California government or by your county/municipality, sometimes have additional qualifications. Get in touch with your local Laguna Hills solar installer to learn more about what incentives your project may qualify for.
If I already have a solar system installed on my house, can I still claim incentives?
An excellent idea would be to talk to someone from the company that installed your solar panels — or speak to a local Laguna Hills solar installer — to better understand which incentives you might qualify for. If your solar panels were installed after January 1, 2022, you likely qualify for the newly increased 30% tax credit under the Inflation Reduction Act. Systems installed between 2006 and 2021 may qualify for a tax credit of 26-30%.
When does the federal solar tax credit end?
The federal solar tax credit, formerly known as the ITC and now named the Clean Energy Credit, is scheduled to end 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 claim incentives both towards the initial cost of solar panels, and later as reimbursement?
Yes, you can claim both tax credits and rebates towards the cost of your solar panels. Depending on precisely which incentives you are eligible for, they may apply in a different order. Make sure that you speak with your solar installer or a local tax professional to ensure that you are claiming the correct incentives and that you're getting the most money you can.
Can I use both solar and another type of renewable energy to power my home?
Yes, you can utilize multiple types of renewable energy to power your home — for example, a combination of wind and solar. You can also combine renewable energy generation with a non-renewable backup source of energy. Make sure that you discuss your proposed plan with your local Laguna Hills solar installation expert, 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.