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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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 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 designed to mitigate the cost of installing a solar panel system on your home. Financial incentives like these are designed to encourage more homeowners to make the switch to renewable energy. Incentives might include things like discounts, cash back or credit on your utility bill each month. Some incentives are offered federally, while others are provided by the California government or your utility company, county or municipality. Some solar incentives you might qualify for are:
- Solar Renewable Energy Certificate (SREC): SRECs and other performance-based incentives are typically handled at the state level. Once your solar system meets the qualification threshold (generally a small amount of energy production), you are eligible to receive SRECs that you can then sell to your utility company or other buyers. The money you make is generally considered part of your taxable income.
- Tax Credits: Different from tax deductions, tax credits are dollar-for-dollar reductions in the amount of income tax that you owe the federal government.
- Rebates: Rebates, or partial refunds after a purchase, are typically given prior to any solar tax credits being calculated. Rebates might be offered by your local utility company, by your county or by your state.
- Net Metering: You can sign a net metering agreement with your Laguna Woods utility company that will apply to all or a percentage of the excess electricity your solar panels generate. Your utility company will then deduct this value from your monthly utility bill.
- Tax Exemptions: Tax exemptions can come in one of two forms. The first is sales tax exemption, which is applied at the time you purchase your solar panels. The second is property tax exemption, which allows you to ignore the added value of your solar system when paying property tax on your home.
Federal Solar Incentives
When you think about solar incentives, you probably think of federal incentives first. The Federal Solar Investment Tax Credit, or ITC, is the best-known federal solar incentive. The ITC provides a tax credit for a predetermined percentage of your solar system's cost.
The ITC applies to the total cost of solar panel installation, including the panels themselves as well as accessories, labor and equipment. This credit can be claimed 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. Originally set at 30% of total costs, the credit has fluctuated over time, and you may qualify for different amounts depending on when your project was completed. There is no maximum claim amount.
Your local Laguna Woods solar panel installation expert can give you more information about the ITC and how it might apply to your situation.
In August 2022, the ITC (now referred to as the Clean Energy Credit) was bolstered by the passage of the Inflation Reduction Act. 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 percentage will be reduced slightly each year until the end of the program in 2035. Starting in 2023, it will also be easier to qualify for credits for energy storage systems under the new laws.
More information about the new Inflation Reduction Act can be found here. The best way to fully understand how the new Clean Energy Credit will apply to you is to talk with your local Laguna Woods solar panel installation expert.
State & Local Solar Incentives
Federal solar incentives are not your only option; rebates, tax credits and more are often offered at the local or state level. These incentives — which might be provided by the state of California, or by your county or municipality — may be offered for only a limited time, or on an ongoing basis.
Next Steps for Installing Solar in Laguna Woods
Solar energy use nationwide has increased enormously in the past 15 years, in part due to the increase in availability of solar incentives. You can obtain these incentives from your local utility company, the federal government or the California government. It is a good idea to talk to your local Laguna Woods solar installer for more information about these incentives and to ensure that you're getting the most money possible for your solar panels.
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EcoWatch's Laguna Woods, CA Solar Incentives FAQs
What if I add a solar system to a rental property, vacation home or commercial property? Can I still qualify for incentives?
Many solar incentives apply to a property you own that is located within the United States, and most secondary residences will fall under this distinction. Other solar incentives may be available for commercial properties, depending on the details. We recommend speaking with your local solar installer and/or tax professional to better understand what incentives will apply to your specific situation.
How much can I save annually on my electric bill if I install solar panels on my house in Laguna Woods?
Typically, Laguna Woods homeowners who install solar panels save around $1,449.58 per year, or around $27,541.95 over 20 years after making the switch.
How long until the federal solar tax credit ends?
The Clean Energy Credit (previously called the federal solar tax credit, or the ITC), is scheduled to end on January 1, 2035. Currently set at 30%, the credit will drop to 26% in 2033 and to 22% in 2034.
If I change out my appliances for ones that can use solar energy, are there any benefits that I can claim?
With the passage of the new Inflation Reduction Act, there are a variety of new financial incentives to encourage you to make eco-friendly improvements to your home. More details regarding these incentives, including information about incentives for purchasing new appliances, can be found here.
Can I use solar and another type of renewable energy in combination to power my home?
Yes, you can use multiple types of renewable energy to power your home — for example, a combination of solar and geothermal. You can also use both renewable energy sources and a backup source of non-renewable energy. Make sure that you discuss your proposed plan with your local Laguna Woods solar panel installer, so that you understand 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.