2023 Solar Incentives Guide for Lenwood, CA - Tax Credits & Rebates
In this guide, we'll cover the latest solar incentives and rebates available in Lenwood.
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 Lenwood?
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
The term "solar incentives" generally refers to financial incentives put in place by solar companies and the government to encourage the adoption and use renewable energy by making solar panels more affordable. Solar incentives may include upfront discounts, cash back 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:
- Net Metering: Net metering factors in once your solar system is up and running. If you have in place a net metering agreement with your Lenwood utility company, the company will subtract the value of the excess energy your solar system produces from your monthly utility bill. In some places, this is a dollar-for-dollar credit, while in other areas you may receive a refund equivalent to a percentage of the value.
- Rebates: Rebates, or partial refunds after a purchase, are typically applied before any solar tax credits are calculated. Rebates might be offered by your local utility company, by your county or by your state.
- Tax Credits: Tax credits reduce, dollar-for-dollar, how much income tax you owe the federal government. Tax credits differ from tax deductions.
- Solar Renewable Energy Certificate (SREC): SRECs can be sold to your utility company (or other buyers) for money that is generally considered part of your taxable income. Generally, a certain (small) threshold of energy production must be met before your solar system can earn SRECs or similar performance-based incentives. SRECs and similar incentives are generally handled by your state government.
- Tax Exemptions: Your solar system could qualify for both sales tax and property tax exemptions. Sales tax exemptions come into effect at the time of purchase. Property tax exemptions let you exclude the value added by your solar panels when you are calculating property taxes on your house.
Federal Solar Incentives
Federal incentives are the kind of incentives that you are most likely to have some knowledge of. The solar incentive that you're most familiar with is probably the Federal Solar Investment Tax Credit (ITC), which gives you a credit on your taxes equal to a 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 claim the credit. Originally, the ITC covered 30% of all system installation costs (panels, accessories, labor and equipment), although the amount has fluctuated slightly over time between 26-30%. The amount you qualify for will depend on when your solar system was installed. There is no cap on the claim amount.
Your local Lenwood solar panel installer can provide you with more information about the ITC and how it applies to your situation.
In August 2022, the ITC (now referred to as the Clean Energy Credit) was bolstered by the passing of the Inflation Reduction Act. Homeowners can now receive a credit of 30% of the total solar system installation costs for projects started after January 1, 2022 and completed before the end of 2032. The credit percentage will then decrease annually until the Clean Energy Credit expires in 2035. Beginning in 2023, it will also be easier to claim credits for energy storage systems under the new laws.
Click here to learn more about the new Inflation Reduction Act. Your local Lenwood solar panel installation experts can answer any questions you have and explain how the new Clean Energy Credit may apply to you.
State & Local Solar Incentives
Rebates, tax credits and more can be claimed at multiple levels. Along with federal solar incentives, there are often state and local ones, too. These incentives might be handled by the California government, or by your county or municipality. Some are ongoing, while others are available for a limited time.
Next Steps for Installing Solar in Lenwood
There are a variety of solar incentives: those given by local utility companies, those given by the California government and those given by the federal government, to name a few. The use of solar energy has increased tremendously in the last 15 years, partially due to these incentives. We suggest talking to your local Lenwood solar installation company to learn more about these incentives and to ensure that you're getting the most money possible for your solar panels.
EcoWatch's Lenwood, CA Solar Incentives FAQs
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