2023 Solar Incentives Guide for Lakewood, CA - Tax Credits & Rebates
In this guide, we'll cover the latest solar incentives and rebates available in Lakewood.
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 Lakewood?
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 encourage people to switch to renewable energy by providing financial incentives that lower the burden of solar panel installation and use. You might be eligible for various kinds of incentives, including cash back, discounts or monthly utility bill credits, depending on your situation. Certain incentives come from your specific utility company, county or municipality, some from the California government and others from the federal government. Some broad categories of solar incentives include:
- Tax Credits: Tax credits are dollar-for-dollar reductions that lower the amount of income tax you owe the federal government. (This is different from a tax deduction.)
- Tax Exemptions: These can come in the form of property tax exemptions, which can let you exclude the value added by your solar panels when paying taxes on your house. You could also look for exemptions on sales tax at the time of purchase.
- Net Metering: Net metering is an incentive you can get after your solar system is up and running. If you've signed a net metering agreement with your Lakewood utility company, it will subtract the value of the excess energy produced by your solar system from your monthly utility bill. In some locations, this is a dollar-for-dollar credit, while in other areas you may make back a percentage of the value.
- Rebates: Your solar installer might help you claim a rebate, or partial refund of your purchase, for your solar system. Counties or states will also sometimes offer limited-time rebates. The value of a rebate will usually be deducted from the total price before any tax credits are calculated.
- Solar Renewable Energy Certificate (SREC): SRECs and other similar performance-based incentives are normally handled by your state government. Once your solar panel system meets a certain threshold (normally 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.
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Federal Solar Incentives
When thinking about solar incentives, federal incentives might be the first thing that comes to mind. The solar incentive that you're most likely to have heard of is the Federal Solar Investment Tax Credit (ITC), which provides a credit on your taxes equal to a certain percentage of the cost of your solar system.
The ITC was originally for 30% of the total cost of solar system installation, although that number has fluctuated slightly over time 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, labor and equipment. 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 in the United States and owned by you.
Your local Lakewood solar panel installation expert can offer more information about the ITC and how it applies to your situation.
The Inflation Reduction Act, passed in August 2022, made some changes to the ITC (as well as retitling it the Clean Energy Credit). For solar system installations that begin after January 1, 2022 and are completed by the end of 2032, homeowners can receive a credit equal to 30% of the total cost. The percentage will then decrease annually until the Clean Energy Credit ends in 2035. Starting in 2023, the program expansion will also make it easier to get credit for energy storage systems.
Click here to learn more about the new Inflation Reduction Act. The easiest way to learn more about how the new Clean Energy Credit applies to you is to speak with your local Lakewood solar panel company directly.
State & Local Solar Incentives
Rebates, tax credits and more can be claimed at multiple levels. On top of federal solar incentives, there are often state and local ones, too. These incentives may be given out by your county or municipality, or by the California government. Some are available for a limited time, while others are ongoing.
Next Steps for Installing Solar in Lakewood
Solar incentives might come from your local utility company, the federal government or the California government. The growing number of solar incentives available has contributed to a large increase in solar energy use in the last 15 years. If you're prepared to make the switch to solar energy, calling your local Lakewood solar panel installation expert is a great first step.
EcoWatch's Lakewood, CA Solar Incentives FAQs
How can I find out if I qualify for specific solar incentives?
Broadly, solar incentives apply to:
- a new solar system
- installed on a property that you own
- within the U.S.
- within the date range specified by a particular incentive.
Specific incentives, including those run by the California government or by your county/municipality, could have additional qualifications. Speak with your local Lakewood solar installer to learn more about what incentives your project will qualify for.
I already have solar panels. Are there any incentives that I qualify for?
You should plan to talk to a representative from the company that installed your solar panels — or speak to a local Lakewood 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%.
How much can I save on my electric bill annually if I install solar panels on my house in Lakewood?
Once you add solar panels to your Lakewood home, you can expect to save around $1,317.57 per year, or around $25,033.85 over 20 years.
What are the environmental benefits of switching to solar?
Solar energy is a renewable energy source — by changing where you get your energy, you can help reduce the strain on our planet's resources. Solar panels can also lower your home's CO2 emissions by 250 pounds annually, or around 5,000 pounds in 20 years.
How long until the federal solar tax credit ends?
The federal solar tax credit, formerly called the ITC and now named the Clean Energy Credit, is set to end on January 1, 2035. The current 30% credit will end in 2032, replaced by a 26% credit in 2033 and a 22% credit in 2034.
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.