2023 Solar Incentives Guide for Lancaster, CA - Tax Credits & Rebates
In this guide, we'll cover the latest solar incentives and rebates available in Lancaster.
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 March 14, 2023
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What Solar Tax Credits, Incentives, and Rebates are Available in Lancaster?
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 make renewable energy usage more affordable through financial incentives for those who install solar panels on their homes. These incentives may include cash back, upfront discounts or monthly credits towards your utility bill. Some incentives are offered by the federal government, some by the state of California and some by your utility company, county or municipality. Some broad categories of solar incentives include:
- Solar Renewable Energy Certificate (SREC): SRECs and other performance-based incentives might be available to you if the solar system on your home produces more than a specified (generally small) amount of electricity. Performance-based incentives are generally handled by the state government. You can sell your SRECs to your utility company or other buyers, and the money you make is usually considered part of your taxable income.
- Net Metering: Net metering is an incentive you can get once your solar panels are up and running. If you have in place a net metering agreement with your Lancaster utility company, the company will subtract the value of the excess energy your solar system produces from your utility bill each month. In some locations, this is a dollar-for-dollar credit, while in other areas you might receive a refund equivalent to a percentage of the value.
- Tax Credits: Tax credits are dollar-for-dollar reductions (not deductions) in how much income tax you owe the federal government.
- Rebates: A solar rebate is a partial refund credited to your account after you've paid for your solar system. These may be offered by your local utility company, your state or your county. The cash back that you get from the rebates is normally applied before tax credits are calculated.
- Tax Exemptions: Your solar panels might qualify for both sales tax and property tax exemptions. Sales tax exemptions are applied at the time of purchase. Property tax exemptions allow you to exclude the value that solar panels add when calculating property taxes on your home.
Federal Solar Incentives
Federal solar incentives are probably the first thing that comes to mind when thinking about solar incentives. A federal incentive that most people are likely familiar with is the Federal Solar Investment Tax Credit (ITC). This is a tax credit for a certain percentage of the cost of your solar system.
The ITC applies to a solar system installed on your primary or secondary residence in the United States. The solar system has to have been installed after January 1, 2006 on a property owned by you for you to be eligible for the credit. The ITC originally paid out 30% of all costs (panels, equipment, accessories and labor), although this amount has fluctuated slightly over the last few years between 26-30%. The installation date of your solar system will determine what percentage you are eligible for. There is no cap on the claim amount.
To better understand exactly how much the ITC could save you, talk to your local Lancaster solar panel installation expert.
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. The new Clean Energy Credit is valid until 2035. American homeowners can now receive a 30% credit for solar systems installed between 2022 and 2032. The total credit will then decrease annually until it expires. Starting in 2023, the expansion will also make claiming credit for energy storage systems easier than ever before.
More information about the new Inflation Reduction Act can be found here. The easiest way to fully understand how the new Clean Energy Credit might apply to you is to get in touch with your local Lancaster solar panel installers.
State & Local Solar Incentives
Some solar incentives may be offered at the local or state level. Like with federal incentives, these may include tax credits, rebates and more. Certain incentives are ongoing, while others are only available for a limited time. These incentives might be given by the California government, or by your county or municipality.
Next Steps for Installing Solar in Lancaster
The large number of available solar incentives has contributed greatly to the increase in the use of solar power nationwide over the last 15 years. You might qualify for solar incentives from the federal government, the California government or from your local utility company. Your local Lancaster solar panel installer can provide you with more details about which incentives you might qualify for, and get you started on the path to switching to renewable energy today.
Best Regional Coverage
- Great warranty coverage
- Representatives are experts on local policies
- Concierge service ensures steady communication
- Slightly limited service offerings
- Price-match guarantee
- Sleek, efficient, and durable solar panels
- Best solar battery on the market
- Some reported issues with customer service
- Customer service varies by local dealer
EcoWatch's Lancaster, CA Solar Incentives FAQs
Can I claim incentives for adding solar panels to a rental property, vacation home or commercial property?
While we recommend talking to your local solar installer and/or tax professional to best understand what solar incentives apply to you, many incentives apply to a second home, provided that it is in the United States and owned by you. There may be other incentives available specifically for commercial properties, depending on the specifics.
How do I know if I qualify for different solar incentives?
In most cases, solar incentives apply to:
- a new solar system
- installed on property you own
- within the U.S.
- between the dates specified by a particular incentive.
Specific incentives, including those given out by the California government or by your county/municipality, could have additional qualifications. Get in touch with your local Lancaster solar installer to discover what incentives your project may qualify for.
How much will solar panels save me annually on my electric bill in Lancaster?
When you add solar panels to your house in Lancaster, you can expect to save around $1,423.74 per year, or around $27,051.04 over 20 years.
What are some of the environmental benefits of switching to solar energy?
You can lower your carbon footprint by 250 pounds of CO2 a year by installing solar panels. This adds up to roughly 5,000 pounds in 20 years. In addition, solar power is a renewable energy source, meaning that switching your home over lessens the drain on our planet's resources.
Can I use a combination of multiple types of renewable energy to power my home?
Yes, you can employ multiple types of renewable energy to power your home — for example, a combination of geothermal and solar. You can also combine renewable energy generation with a backup source of non-renewable energy. Be sure to discuss your proposed plan with your local Lancaster solar installation expert, to get an understanding of what will be needed and what types of incentives you may or may not 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.