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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Updated September 15, 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
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/
The term "solar incentives" includes a range of financial incentives implemented to make installing and using solar panels more affordable. This is done to encourage people to switch to renewable energy. Various kinds of incentives, including cash back, discounts or credit towards your monthly utility bill, might be available to you. Some incentives may be offered by the California government, by your utility company or by county or municipality, while other incentives are federal. Some solar incentives you might qualify for are:
- Rebates: Rebates, or partial refunds after a purchase, are normally applied prior to any solar tax credits being calculated. Rebates may be given by your local utility company, by your county or by your state.
- 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 may also qualify for an exemption on sales tax at the time of purchase.
- Solar Renewable Energy Certificate (SREC): SRECs and other similar performance-based incentives are usually handled at the state level. Once your solar system meets a certain threshold (usually a small amount of energy production), you can receive SRECs that can be sold to your utility company or other buyers. The money you receive from the sale is usually considered part of your taxable income.
- Tax Credits: Different from tax deductions, tax credits reduce, dollar-for-dollar, the amount of income tax that you owe the government.
- Net Metering: Net metering becomes relevant once your solar panels are up and running. If you've signed a net metering agreement with your Lancaster utility company, the company 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 others you may receive a refund equivalent to a percentage of the value.
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Federal Solar Incentives
Federal incentives are the type of incentives that you are most likely to have heard of. The Federal Solar Investment Tax Credit, or ITC, is probably the most well-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 initially applied to 30% of the total cost of solar panel installation, although that number has fluctuated slightly over the last few 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, labor and equipment. There is no maximum claim amount. The ITC can be applied 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.
Wondering how the ITC applies to your specific situation? Reach out to your local Lancaster solar panel installer to get more information.
In August 2022, the ITC (now called the Clean Energy Credit) was expanded and extended by the passage of the Inflation Reduction Act. With the new provisions, solar installation projects that are completed between 2022 and 2032 can qualify for a 30% tax credit. The amount of the credit will then decrease slightly each year until the current Clean Energy Credit expires 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. Your local Lancaster solar panel installation experts can answer any questions you have and explain how the new Clean Energy Credit will apply to you.
State & Local Solar Incentives
There are often state solar incentives available in addition to federal ones. Tax credits, rebates and more might be available at a more local level. Certain incentives are ongoing, while others are only available for a limited time. They might be provided by the California government, or by your county or municipality.
Next Steps for Installing Solar in Lancaster
The variety of solar incentives available has helped tremendously increase the nationwide adoption of solar energy over the last 15 years. You can get solar incentives from the federal government, the California government or from your local utility company. When you're ready to make the switch to solar energy, calling your local Lancaster solar panel installation expert is a great first step.
EcoWatch's Lancaster, CA Solar Incentives FAQs
How do I know if I qualify for specific solar incentives?
Broadly, solar incentives apply to:
- a new solar system
- installed on property that you own
- within the U.S.
- between the dates specified by a particular incentive.
Specific incentives, including those run by the California government or by your county/municipality, may have additional qualifications. Talk to your local Lancaster solar installer to learn more about what incentives your project may qualify for.
How much can I save annually on my electric bill if I install solar panels on my Lancaster home?
Typically, homeowners in Lancaster who install solar panels save approximately $1,423.74 per year, or approximately $27,051.04 over 20 years after they make the switch.
What are some environmental benefits of adding solar panels to my house?
Solar energy is a renewable energy source — by changing where you get your energy, you help lessen the strain on our planet's resources. Solar panels can also reduce the CO2 emissions from your home by 250 pounds a year, or around 5,000 pounds in 20 years.
How long until the federal solar tax credit ends?
The federal solar tax credit, formerly known as the ITC and now named the Clean Energy Credit, is slated 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.
I want to trade in my old appliances for ones that are more energy-efficient. Are there any credits I can claim?
Under 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 on these incentives, including information about incentives for purchasing new appliances, can be found here.
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.