2023 Solar Incentives Guide for Morgan Hill, CA - Tax Credits & Rebates
In this guide, we'll cover the latest solar incentives and rebates available in Morgan Hill.
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 Morgan Hill?
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 mitigate the cost of installing a solar panel system on your home. Financial incentives like these are designed to encourage more people to make the switch to renewable energy. You might be eligible for various kinds of incentives, such as discounts, cash back or credit towards your monthly utility bill, depending on your situation. Certain incentives come from your specific utility company, county or municipality, some from the state of California and others from the federal government. Some solar incentives you might qualify for are:
- Tax Exemptions: Sales tax exemptions go into effect at the time of purchase for your solar panels. Property tax exemptions allow you to 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: Different from tax deductions, tax credits are dollar-for-dollar reductions in the amount of income tax that you owe the government.
- Rebates: Solar rebates might be provided by your local utility company, or by your state or county. These rebates are essentially partial refunds that are applied after you pay for solar panels and before tax credits are calculated.
- Solar Renewable Energy Certificate (SREC): SRECs and similar performance-based incentives might be available to you if the solar system on your home produces more than a specified (usually small) amount of electricity. Performance-based incentives are generally handled at the state level. You can sell your SRECs to your utility company or other buyers, and the money you make is typically considered part of your taxable income.
- Net Metering: Net metering is an incentive you can get after your solar panels are up and running. If you have in place a net metering agreement with your Morgan Hill utility company, it will subtract the value of the excess energy your solar system produces from your utility bill each month. In some locations, this is a dollar-for-dollar credit, while in other places you might make back a percentage of the value.
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Federal Solar Incentives
Federal solar incentives are likely to be the first thing that you think of when you think about solar incentives. You might have heard of the Federal Solar Investment Tax Credit, or ITC. The ITC is a tax credit that reduces your taxes by a predetermined percentage of the money you spend on solar panels for your home.
The ITC covers solar systems installed after January 1, 2006 and under this program you can deduct from your taxes a percentage of the total cost of solar panels, accessories, equipment and labor. This credit can be claimed on a solar panel system installed on a primary or secondary residence in the United States that you own. The original claim amount was 30% of the total cost, although depending on when the project was completed, your credit may range from 26-30%. There is no maximum amount you can claim.
Reaching out to your local Morgan Hill solar panel installation expert is the best way to learn more about how the ITC applies to you.
The ITC was both renewed and expanded by the passage of the Inflation Reduction Act in August 2022. It's also now called the Clean Energy Credit. The Clean Energy Credit is valid until 2035. Your solar installation project undertaken between 2022 and 2032 may qualify for a 30% tax credit. This amount will be decreased slightly on a yearly basis until the end of the current program. The expansion also makes claiming credit for energy storage systems easier than ever before, starting in 2023.
More information about the new Inflation Reduction Act can be found here. The best way to understand how the new Clean Energy Credit will apply to you is to talk with your local Morgan Hill solar panel company.
State & Local Solar Incentives
There are more than just federal solar incentives; tax credits, rebates and more are often offered at the local or state level. Some incentives are ongoing, while others may only be available for a limited time. These incentives might be provided by your county or municipality, or by the California government.
Next Steps for Installing Solar in Morgan Hill
Nationwide solar energy use has significantly increased in the past 15 years, in part thanks to the growth in the number of solar incentives. You may get these incentives from your local utility company, the federal government or the California government. Call your local solar panel installer today to learn more and to save as much money as possible on solar panels for your Morgan Hill home.
EcoWatch's Morgan Hill, CA Solar Incentives FAQs
Can I claim incentives for adding solar panels to a rental property, vacation home or commercial property?
Many solar incentives are intended to apply to a property located within the United States that you own, and most secondary residences fall into this category. Other solar incentives may be available for commercial properties, depending on the details. We recommend speaking with your local solar installer and/or tax professional to better understand what incentives apply to your specific situation.
How much will solar panels save me annually on my electric bill in Morgan Hill?
Generally, Morgan Hill homeowners who install solar panels save about $1,764.67 per year, or about $33,528.72 over 20 years after they make the switch.
What are the highest-rated solar panel installation companies near me?
To find the top solar panel installation companies near you, take a look at our article on Morgan Hill's top solar panel companies.
If I change out my appliances for ones that utilize solar energy, are there any incentives that I can claim?
The new Inflation Reduction Act introduces a number of incentives designed to reward homeowners who make eco-friendly upgrades. Some of these incentives include rebates and tax credits for installing new electric appliances. You can find more details about these incentives here.
Can I use a combination of solar and another type of renewable energy to power my home?
You can use multiple types of renewable energy, or a combination of renewable and non-renewable energy, to power your home. Make sure you talk through your ideas with your local Morgan Hill solar installation expert. They can help you plan your project and educate you on the 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.