2023 Solar Incentives Guide for Montclair, CA - Tax Credits & Rebates
In this guide, we'll cover the latest solar incentives and rebates available in Montclair.
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 Montclair?
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 phrase "solar incentives" covers a range of financial incentives designed to make installing and using solar panels more affordable. This is done to encourage people to switch to renewable energy. Different types of incentives, like cash back, discounts or credit towards your monthly utility bill, might be available to you. Some incentives may be provided via 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: Sales tax exemptions are applied at the time of purchase for your solar system. Property tax exemptions let you ignore the value that your solar panels add when you're calculating how much property tax you need to pay on your house.
- Tax Credits: Tax credits are dollar-for-dollar reductions (not deductions) in how much income tax you owe the government.
- Solar Renewable Energy Certificate (SREC): SRECs are credits that can be sold to your utility company (or other buyers) for money that typically becomes part of your taxable income. Generally, you must meet a certain (small) threshold of energy production before your solar system is eligible for SRECs or other performance-based incentives. These kinds of incentives are normally handled by your state government.
- Net Metering: Net metering becomes relevant once your solar panels are up and running. If you have in place a net metering agreement with your Montclair utility company, the company will subtract the value of the excess energy your solar system produces from your utility bill each month. In some locations, this credit is dollar-for-dollar, while in other areas you may receive a refund equivalent to a percentage of the value.
- Rebates: Solar rebates may be provided by your local utility company, or by your county or state. These rebates are essentially partial refunds that are applied after you purchase a solar system and before tax credits are calculated.
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Federal Solar Incentives
Federal solar incentives are likely to be the first thing that comes to mind when thinking about solar incentives. A federal incentive many people are likely familiar with is the Federal Solar Investment Tax Credit (ITC). The ITC is a tax credit for a specified percentage of your solar system's cost.
The ITC applies to solar systems installed after January 1, 2006 on a primary or secondary residence that you own in the United States. Initially, the credit applied to 30% of the total cost — for panels, labor, accessories and equipment — although that amount may range from 26-30%, depending on when your solar project was undertaken. There is no cap on the amount you can claim.
To more fully understand how the ITC could apply to your situation, reach out to your local Montclair solar panel installer and request more information.
In August 2022, the Inflation Reduction Act made revisions to the ITC, now referred to as the Clean Energy Credit. The Clean Energy Credit lasts until 2035. Your solar installation project undertaken between 2022 and 2032 may qualify for a 30% tax credit; this amount will decrease slightly on a yearly basis until the end of the current program. The expansion to the program also makes it easier to get credit for energy storage systems, beginning in 2023.
More information about the new Inflation Reduction Act can be found here. The easiest way to fully understand how the new Clean Energy Credit might apply to you is to get in touch with your local Montclair solar panel installation expert.
State & Local Solar Incentives
There are more than just federal solar incentives; tax credits, rebates and more may be offered at the local or state level. These incentives may be offered by the California government, or by your county or municipality. Some incentives may be available for a limited time, while others are ongoing.
Next Steps for Installing Solar in Montclair
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. Solar energy use has grown enormously in the last 15 years, partially due to these incentives. Speak with your local solar panel installation company today to find out more information and to save the most money possible on a solar system for your Montclair home.
EcoWatch's Montclair, CA Solar Incentives FAQs
What if I want to add a solar system to a rental property, vacation home or commercial property? Do I still qualify for incentives?
While we recommend getting in touch with your local solar installer and/or tax professional to best understand what solar incentives apply to you, many incentives can be claimed on a second home, as long as it is in the United States and owned by you. There may be other incentives available specifically for commercial properties, depending on the specifics.
How much can I save on my electric bill annually if I add solar panels to my house in Montclair?
Generally, homeowners in Montclair who install solar panels save approximately $1,307.60 per year, or approximately $24,844.33 over 20 years after they make the switch.
How long until the federal solar tax credit ends?
The federal solar tax credit, previously called the ITC and now called 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.
Can I claim incentives both towards the initial cost of solar panels, and later as reimbursement?
The order your incentives will be applied in could vary depending on which incentives you are eligible for but usually yes, you can receive multiple types of incentives for your solar project. Talk with your solar installer or a local tax professional to verify you are claiming all of the incentives you qualify for and applying them in the correct order.
Can I use multiple types of renewable energy to power my home?
You can power your home with multiple types of renewable energy, or a combination of renewable and non-renewable energy. Make sure you discuss your ideas with your local Montclair solar installation expert. They can help you with the plan for your project and give you an understanding of various incentives that you might or might 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.