2023 Solar Incentives Guide for Millbrae, CA - Tax Credits & Rebates
In this guide, we'll cover the latest solar incentives and rebates available in Millbrae.
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 Millbrae?
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 that are in place to encourage increased use of renewable energy by making the installation and use of solar panels more affordable. Different types of incentives, including discounts, cash back or credit towards your monthly utility bill, may be available to you. Some incentives may be handled by the state of California, by your utility company or by county or municipality, while others are federal. Some solar incentives you might qualify for are:
- Tax Exemptions: Tax exemptions can come in two forms. The first is sales tax exemption, which is applied at the time you purchase your solar panels. The second is property tax exemption, which allows you to ignore the value added by your solar system when paying property tax on your home.
- Tax Credits: Tax credits are dollar-for-dollar reductions in the amount of income tax that you owe the federal government. (A tax credit is different from a tax deduction.)
- Net Metering: You may be able to sign a net metering contract with your Millbrae utility company. This agreement may apply to all or a percentage of the excess electricity your solar panels generate. They will then subtract this value from your monthly utility bill.
- Rebates: A rebate is a partial refund given after you've purchased your solar panels. These might be offered by your local utility company, your state or your county. The rebates are usually applied before tax credits are calculated.
- Solar Renewable Energy Certificate (SREC): SRECs and similar performance-based incentives may be available to you if you have a solar system that produces over a specified (generally small) amount of electricity. Performance-based incentives are usually handled at the state level. You can sell the SRECs you receive to your utility company or other buyers, and the money you make is typically considered part of your taxable income.
Federal Solar Incentives
Federal solar incentives are likely the first thing that comes to mind when you think about solar incentives. A federal incentive many people are likely familiar with is the Federal Solar Investment Tax Credit (ITC). This is a tax credit for a predetermined percentage of the cost of your solar system.
The ITC was originally for 30% of the cost of installing a solar system, although it has fluctuated slightly over the years between 26-30%. The installation date of your solar system will determine what percentage you qualify for. 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 applies 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.
Your local Millbrae solar panel installer can offer more information about the ITC and how it may apply to your situation.
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 might qualify for a 30% tax credit. The amount of the credit will then see a slight annual decrease until the current Clean Energy Credit expires in 2035. Starting in 2023, it will also be easier to get credits for energy storage systems with the new act.
Click here to learn more about the new Inflation Reduction Act. Your local Millbrae solar panel company is the best resource for answering your questions regarding the new Clean Energy Credit and how it will apply to you.
State & Local Solar Incentives
Some solar incentives are often also offered at the local or state level. Like with federal incentives, these could include rebates, tax credits and more. These solar incentives — which might be given by the state of California, or by your county or municipality — could be offered for only a limited time, or on an ongoing basis.
Next Steps for Installing Solar in Millbrae
Nationwide solar energy use has gone up significantly in the past 15 years, in part due to the proliferation of solar incentives. You can obtain these incentives from the federal government, the California government or your local utility company. Speaking with your local Millbrae solar panel installer is the best first step towards making sure you get all the incentives you qualify for when you switch to solar energy.
EcoWatch's Millbrae, CA Solar Incentives FAQs
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