2023 Solar Incentives Guide for Laguna Woods, CA - Tax Credits & Rebates
In this guide, we'll cover the latest solar incentives and rebates available in Laguna Woods.
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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What Solar Tax Credits, Incentives, and Rebates are Available in Laguna Woods?
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
Solar incentives are intended to encourage homeowners to make the switch to renewable energy by providing incentives that lower the financial burden of solar panel installation and use. These incentives could include upfront discounts, cash back or monthly credits towards your utility bill. Some incentives are given by the federal government, some by the California government and some by your specific utility company, county or municipality. Categories of solar incentives include:
- Rebates: A solar rebate is a partial refund given after you've purchased your solar panels. Rebates might be offered by your local utility company, your county or your state. The discount that rebates offer is normally applied to the price of solar panels before tax credits are calculated.
- Tax Exemptions: Your solar panel system might qualify for both sales tax and property tax exemptions. Sales tax exemptions are effective at the time of purchase. Property tax exemptions let you exclude the value that solar panels add when calculating property taxes on your house.
- Tax Credits: Tax credits are dollar-for-dollar reductions that lower the amount of income tax you owe the government. (This is different from a tax deduction.)
- Solar Renewable Energy Certificate (SREC): SRECs are credits that can be sold to your utility company (or other buyers) for cash that is generally considered part of your taxable income. In most cases, there is a small threshold of energy production to meet before your solar system qualifies for SRECs or similar performance-based incentives. Incentives like these are generally handled at the state level.
- Net Metering: Net metering factors in after your solar system is up and running. If you have a net metering agreement with your Laguna Woods utility company, it will subtract the value of the excess energy produced by your solar system from your monthly utility bill. In some areas, this is a dollar-for-dollar credit, while in other places you might make back a percentage of the value.
Federal Solar Incentives
Federal solar incentives are probably the first thing that you think of when thinking about solar incentives. An incentive that most people are probably familiar with is the Federal Solar Investment Tax Credit (ITC). This incentive is a tax credit for a given percentage of your solar system's cost.
The ITC initially applied to 30% of the cost of installing a solar system, although it has fluctuated slightly over the years between 26-30%. The percentage you qualify for will depend on when your solar system was installed. The total installation cost includes the panels themselves as well as the cost of accessories, equipment and labor. There is no maximum claim amount. The ITC applies to solar systems installed after January 1, 2006 on your primary or secondary residence. The residence must be owned by you and in the United States.
Speaking with your local Laguna Woods solar panel installer is the best way to understand how the ITC applies to you.
The ITC has been renewed and expanded following the passage of the Inflation Reduction Act in August 2022. It's also now called the Clean Energy Credit. Homeowners can now qualify for a credit equal to 30% of the total costs of solar system installation for projects that began after January 1, 2022 and will be finished by the end of 2032. The percentage will then decrease annually until the Clean Energy Credit expires in 2035. Beginning in 2023, it will also be easier to qualify for credits for energy storage systems under this new program.
Click here to learn more about the new Inflation Reduction Act. To better understand how the new Clean Energy Credit might apply to you, speak with your local Laguna Woods solar installers.
State & Local Solar Incentives
Tax credits, rebates and more can be provided at multiple levels. In addition to federal solar incentives, there are often state and local ones as well. Some incentives are ongoing, while others are only available for a limited time. Incentives may be given by your county or municipality, or by the California government.
Next Steps for Installing Solar in Laguna Woods
You can apply for solar incentives from the federal government and the California government, as well as from your local utility company. Growing availability of solar initiatives over the last 15 years has helped increase solar adoption nationwide. We recommend talking to your local Laguna Woods solar installation expert to learn more about these incentives and to ensure that you're getting the largest number possible for your solar panels.
EcoWatch's Laguna Woods, CA Solar Incentives FAQs
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