2023 Solar Incentives Guide for Lake Forest, CA - Tax Credits & Rebates
In this guide, we'll cover the latest solar incentives and rebates available in Lake Forest.
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 Lake Forest?
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 encourage homeowners to make the switch to renewable energy by offering financial incentives that lower the burden of solar panel installation and use. Incentives can include things like discounts, cash back or monthly utility bill credits. Some incentives are offered by the federal government, while others are handled by the state of California or by your specific utility company, county or municipality. Types of solar incentives might include:
- Tax Credits: Tax credits reduce, dollar-for-dollar, the amount of income tax you owe the government. These differ from tax deductions.
- Rebates: Solar rebates may be provided by your state or county, or by your local utility company. These rebates work as cash back that is applied after you purchase solar panels and before tax credits are calculated.
- Solar Renewable Energy Certificate (SREC): SRECs can be sold to your utility company (or other buyers) for cash that is generally considered part of your taxable income. Generally, you must meet a certain (small) threshold of energy production before your solar system is eligible for SRECs or similar performance-based incentives. Incentives like these are typically handled at the state level.
- Net Metering: You may be able to sign a net metering agreement with your Lake Forest utility company, that may apply to all or a percentage of the excess electricity your solar panels generate. Your utility company will then deduct this value from your utility bill each month.
- Tax Exemptions: Sales tax exemptions are effective at the time of purchase for your solar panels. Property tax exemptions let you ignore the added value of your solar system when you're calculating how much property tax you need to pay on your home.
Federal Solar Incentives
When people think of solar incentives, federal incentives are likely the first thing that comes to mind. The Federal Solar Investment Tax Credit, or ITC, is the most commonly known federal solar incentive. The ITC allows you to claim a tax credit for a specific 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, equipment, labor and accessories — although it may range from 26-30%, depending on when your solar system was installed. There is no cap on the amount you can claim.
To understand exactly how much money the ITC could save you, contact your local Lake Forest solar panel installation expert.
The Inflation Reduction Act, passed in August 2022, added more provisions to the ITC (as well as renaming it to the Clean Energy Credit). The Clean Energy Credit is valid until 2035. Any solar installation project that is completed between January 1, 2022 and December 31, 2032 may qualify for a 30% tax credit; the amount will decrease slightly on a yearly basis until the current program ends. Starting in 2023, the expansion to the program will also make it easier to get credit for energy storage systems.
Click here to learn more about the new Inflation Reduction Act. Your local Lake Forest 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
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. These incentives may be handled by your county or municipality, or by the California government. Certain incentives are available for a limited time, while others are ongoing.
Next Steps for Installing Solar in Lake Forest
The nationwide use of solar energy has significantly increased in the last 15 years, in part thanks to the increase in availability of solar incentives. You can obtain these incentives from the federal government, the California government or your local utility company. If you're prepared to make the switch to solar energy, reaching out to your local Lake Forest solar panel installation expert is an excellent place to start.
EcoWatch's Lake Forest, CA Solar Incentives FAQs
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