2024 Solar Incentives Guide for McKinleyville, CA - Tax Credits & Rebates
In this guide, we'll cover the latest solar incentives and rebates available in McKinleyville.
You'll learn about:
- Local & State Solar Incentives
- Federal Tax Credits (Updated for 2024 and beyond)
- Ways to optimize your solar investment
Solar installers are experts in maximizing your solar tax credits and rebates.
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What Solar Tax Credits, Incentives, and Rebates are Available in McKinleyville?
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 propertyThe 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 phrase "solar incentives" refers to financial incentives designed to encourage the adoption and use renewable energy by making the installation and use of solar panels more affordable. Incentives could include things like discounts, cash back or monthly utility bill credits. Some incentives are offered federally, while others are offered by the California government or by your utility company, county or municipality. Some broad categories of solar incentives include:
- 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. Any rebates you receive will usually come off the total price before tax credits are calculated.
- 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.)
- Net Metering: Net metering becomes relevant once your solar panels are up and running. If you have a net metering agreement with your McKinleyville utility company, the company will subtract the value of the excess energy your solar system produces from your utility bill each month. In some areas, this credit is dollar-for-dollar, while in other places you may receive a refund equivalent to a percentage of the value.
- Tax Exemptions: Your solar panel system could qualify for both sales tax and property tax exemptions. Sales tax exemptions are effective at the time of purchase. Property tax exemptions let you ignore the value added by your solar panels when calculating property taxes on your house.
- Solar Renewable Energy Certificate (SREC): In most cases, solar systems that produce more than a predetermined (usually small) amount of electricity qualify for SRECs or other similar performance-based incentives. SRECs and performance-based incentives in general are typically given by your state government. When you receive an SREC, you can sell it to your utility company or another buyer, and generally the money you make is normally considered part of your taxable income.
Best National Provider
SunPower
- Most efficient panels on the market
- National coverage
- Cradle to Cradle sustainability certification
- Great warranty coverage
- Expensive
- Customer service varies by local dealer
Best Regional Coverage
Momentum Solar
- Great warranty coverage
- Representatives are experts on local policies
- Concierge service ensures steady communication
- Slightly limited service offerings
Best for Leasing
Sunrun
- Expansive service area
- Many financing options
- Some reported issues with customer service
- Some reported issues with door-to-door sales
Federal Solar Incentives
Federal solar incentives are likely the first thing that comes to mind when you think about solar incentives. It's likely that you've heard of the Federal Solar Investment Tax Credit, or ITC. The ITC is a tax credit equal to a specified percentage of the money you spend on your solar system.
The ITC can be applied to solar panels installed on your primary or secondary residence in the United States. The solar system must have been installed after January 1, 2006, on a property owned by you for you to be eligible for the credit. Originally, the ITC covered 30% of all system installation costs (panels, labor, equipment and accessories), although the amount has fluctuated over the years between 26-30%. The amount you qualify for will depend on when your solar system was installed. There is no cap on the amount you can claim.
Contacting your local McKinleyville solar panel installation expert is the best way to understand how the ITC applies to you.
In August 2022, the Inflation Reduction Act made revisions to the ITC, now called the Clean Energy Credit. The Clean Energy Credit is valid 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 be decreased slightly each year until the current program ends. The program expansion also makes it easier to get credit for energy storage systems, starting in 2023.
More information about the new Inflation Reduction Act can be found here. To better understand how the new Clean Energy Credit will apply to you, reach out to your local McKinleyville solar installers.
State & Local Solar Incentives
Some solar incentives are often also offered at the local or state level. Similar to federal incentives, these can include rebates, tax credits and more. Certain incentives are ongoing, while others are only available for a limited time. Solar incentives might be offered by your county or municipality, or by the California government.
Next Steps for Installing Solar in McKinleyville
There are many kinds of solar incentives: those offered by local utility companies, those provided by the federal government and those offered by the California government, to name a few. The use of solar energy has grown enormously in the last 15 years, thanks to these incentives. If you're prepared to switch over to solar energy, getting in touch with your local McKinleyville solar panel installation expert is a great first step.
EcoWatch's McKinleyville, CA Solar Incentives FAQs
If I already have solar panels, can I still claim incentives?
If your solar system was installed after January 1, 2022, you may qualify for the recently increased 30% tax credit under the Inflation Reduction Act. If you had your system installed between 2006 and 2021, you might qualify for a tax credit between 26% and 30%, depending on the exact installation date. Speaking with a representative from the company that installed your solar system, or any local McKinleyville solar installer, can help you understand what incentives you can apply for.
When does the federal solar tax credit end?
The Clean Energy Credit (formerly named the federal solar tax credit, or the ITC), is scheduled to end on January 1, 2035. Currently set at 30%, the credit will drop to 26% in 2033 and to 22% in 2034.
Can I use solar and another type of renewable energy in combination to power my home?
Yes, you can use multiple types of renewable energy to power your home, such as a combination of solar and wind power. You can also combine renewable energy generation with a backup source of non-renewable energy. Be sure to discuss your plan with your local McKinleyville solar installation expert, to make sure you know what you'll need and what types of incentives you may or may not qualify for.
Can I receive any incentives when I add 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 better understand what solar incentives apply to you, many incentives apply to a second home, so long as that home is in the United States and owned by you. There may be other incentives available for commercial properties specifically, depending on the specifics.
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.