2023 Solar Incentives Guide for McFarland, CA - Tax Credits & Rebates
In this guide, we'll cover the latest solar incentives and rebates available in McFarland.
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 McFarland?
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 are intended to make renewable energy usage more affordable through financial incentives for individuals who install solar panels on their homes. Incentives can include things like discounts, cash back or monthly utility bill credits. Some incentives are offered by the federal government, while others are offered by the state of California or by your utility company, county or municipality. Categories of solar incentives include:
- Rebates: Some solar companies will help you claim a rebate, or partial refund after purchase, for your solar panels. Counties or states will also sometimes offer limited-time rebates. If you receive a rebate, that amount will usually come off the total price before tax credits are calculated.
- Net Metering: Net metering becomes relevant once your solar panels are up and running. If you've signed a net metering agreement with your McFarland utility company, the company will subtract the value of the excess energy your solar system produces from your monthly utility bill. In some locations, this credit is dollar-for-dollar, while in others you may make back a percentage of the value.
- Tax Credits: Unlike tax deductions, tax credits reduce, dollar-for-dollar, the amount of income tax that you owe the federal government.
- Tax Exemptions: These might come in the form of property tax exemptions, which let you ignore the value of your solar system when calculating the taxes you pay on your house. You may also qualify for an exemption on sales tax at the time of purchase.
- Solar Renewable Energy Certificate (SREC): Typically, solar systems that produce over a specific (generally small) amount of electricity can qualify for SRECs or other performance-based incentives. SRECs and performance-based incentives in general are typically provided at the state level. When you receive an SREC, you can sell it to your utility company or another buyer, and the money you receive is normally considered part of your taxable income.
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Federal Solar Incentives
When you hear the term "solar incentives," federal incentives are likely 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 gives you a credit on your taxes equal to a specified percentage of your solar system's cost.
The ITC is applied to the total cost of installing a solar system, including the panels themselves as well as accessories, labor and equipment. You can claim this credit for panels installed after January 1, 2006 on a primary or secondary residence located in the United States that you own. The tax credit ranges from 26-30% of total costs depending on when your project was completed. There is no maximum claim amount.
To understand exactly how much money the ITC could save you, speak with your local McFarland solar panel installer.
In August 2022, the Inflation Reduction Act made revisions to the ITC, now called the Clean Energy Credit. The Clean Energy Credit runs until 2035. Solar installation projects started after January 1, 2022 and completed by the end of 2032 may qualify for a 30% tax credit. The amount will decrease slightly on a yearly basis until the end of the current program. The expansion to the program also makes credits for energy storage systems even easier to claim, starting in 2023.
Click here to learn more about the new Inflation Reduction Act. The best way to learn more about how the new Clean Energy Credit applies to you is to talk with your local McFarland solar panel installation expert.
State & Local Solar Incentives
There are often also state solar incentives in addition to those provided by the federal government. Tax credits, rebates and more can be offered at a more local level. These incentives might be given out by the California government, or by your county or municipality. Certain incentives are ongoing, while others are available for a limited time.
Next Steps for Installing Solar in McFarland
You can apply for solar incentives from the California government and the federal government, as well as from your local utility company. This increase in availability of solar initiatives in the past 15 years has helped increase solar adoption nationwide. When you're ready to make the change to solar energy, calling your local McFarland solar panel installation expert is a great first step.
EcoWatch's McFarland, CA Solar Incentives FAQs
How much will a solar system save me on my electric bill in McFarland annually?
Once you add solar panels to your McFarland home, you can anticipate savings of around $1,556.69 per year, or around $29,577.02 over the next 20 years.
What are the best solar panel installation companies near me?
To find the best solar panel installation companies near you, take a look at our article on McFarland's best solar panel companies.
What are some environmental benefits of installing solar panels on my house?
You can lower your carbon footprint by 250 pounds of CO2 annually by switching to solar panels. This adds up to around 5,000 pounds in 20 years. Solar is also a renewable energy source, meaning that making the switch reduces the drain on our planet's resources.
I want to switch my appliances out for ones that are more energy-efficient. Are there any incentives I can get?
Under the new Inflation Reduction Act, there are a variety of new financial incentives for making eco-friendly improvements to your home. More details regarding these incentives, including information about incentives for purchasing new appliances, can be found here.
Can I use multiple types of renewable energy to power my home?
Yes, you can use multiple types of renewable energy to power your home — for example, a combination of wind and solar. You can also combine renewable energy generation with a non-renewable backup source of energy. You should discuss the details of your plan with your local McFarland solar panel installer, to make sure you know what you'll need and what kinds 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.