2023 Solar Incentives Guide for Newport Beach, CA - Tax Credits & Rebates
In this guide, we'll cover the latest solar incentives and rebates available in Newport Beach.
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 Newport Beach?
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 meant to encourage homeowners to make the switch to renewable energy by offering incentives meant to lower the financial burden of solar panel installation and use. The incentives may include upfront discounts, cash back or monthly credits towards your utility bill. Some incentives are handled by the federal government, some by the state of California and some by your utility company, county or municipality. Some solar incentives you might qualify for are:
- Rebates: Rebates, or partial refunds after a purchase, are normally given before any solar tax credits are calculated. These rebates might be given by your local utility company, by your county or by your state.
- Solar Renewable Energy Certificate (SREC): SRECs and other similar performance-based incentives are normally handled by your state government. Once your solar system meets the qualification threshold (usually a small amount of energy production), you can receive SRECs that you can then sell to your utility company or other buyers. The money you make is usually considered part of your taxable income.
- Net Metering: Net metering factors in once your solar system is up and running. If you have in place a net metering agreement with your Newport Beach utility company, the company will subtract the value of the excess energy produced by your solar system from your utility bill each month. In some places, this credit is dollar-for-dollar, while in other places you might make back a percentage of the value.
- Tax Exemptions: Tax exemptions may come in one of two forms. First, there is sales tax exemption, 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 calculating property tax for your home.
- Tax Credits: Tax credits are dollar-for-dollar reductions (not deductions) in how much in taxes you owe the government.
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Federal Solar Incentives
Federal incentives are the kind of incentives that you are most likely to have some knowledge of. The Federal Solar Investment Tax Credit, or ITC, is likely the best-known federal solar incentive. The ITC provides you with a tax credit for a predetermined percentage of the cost of your solar system.
The ITC applies to solar systems installed after January 1, 2006 on a primary or secondary residence that you own in the United States. Originally, the tax credit was for 30% of the total cost — for panels, labor, equipment and accessories — although it may range from 26-30%, depending on the installation date of your solar system. There is no cap on the amount you can claim.
To better understand how the ITC will apply to your situation, reach out to your local Newport Beach solar panel installer and ask for more information.
In August 2022, the ITC (now referred to as the Clean Energy Credit) was bolstered by the passage of the Inflation Reduction Act. For solar systems installed between January 1, 2022 and December 31, 2032, homeowners can apply for a credit equal to 30% of the total cost. The percentage will then decrease annually until the Clean Energy Credit ends in 2035. Starting in 2023, the program expansion will also make credits for energy storage systems even easier to claim.
Click here to learn more about the new Inflation Reduction Act. Your local Newport Beach solar panel company is the best resource for answering your questions regarding the new Clean Energy Credit and how it applies to you.
State & Local Solar Incentives
Rebates, tax credits and more can be provided at multiple levels. Along with federal solar incentives, there are often state and local ones as well. Incentives may be handled by your county or municipality, or by the state of California. Some incentives might only be available for a limited time, while others are ongoing.
Next Steps for Installing Solar in Newport Beach
There are a number of different solar incentives: those offered by local utility companies, those offered by the federal government and those offered by the California government, to name a few. Solar energy utilization has grown enormously in the last 15 years, thanks to these incentives. We recommend talking to your local Newport Beach solar installation expert for more information about these incentives and to be sure that you're getting all of the money you can for your solar panels.
EcoWatch's Newport Beach, CA Solar Incentives FAQs
How can I learn if I qualify for different solar incentives?
It's best to speak with your local Newport Beach solar installer for a better understanding of which incentives your project will qualify for. Usually, solar incentives apply to new solar panel systems installed on property you own (in the U.S.) between the dates specified by the incentive. Some incentives, such as those provided by the California government, may have other requirements.
What are some environmental benefits of adding solar panels to my house?
You can reduce your carbon footprint by 250 pounds of CO2 a year by installing solar panels. This adds up to roughly 5,000 pounds in 20 years. Solar is also a renewable energy source, which means that making the switch lessens the drain on our planet's resources.
How long until the federal solar tax credit ends?
The Clean Energy Credit (previously referred to as the federal solar tax credit, or 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.
I want to trade in my old appliances for ones that are more energy-efficient. Are there any incentives I can get?
The new Inflation Reduction Act creates a variety of new financial incentives that are available when you make eco-friendly improvements to your home. More details about these incentives, including information about incentives for purchasing new appliances, can be found here.
Can I qualify for incentives both towards the initial cost of solar panels, and later as reimbursement?
The order in which incentives are applied could vary depending on which incentives you are eligible for but typically yes, you can claim multiple types of incentives for your solar project. Check with your solar installer or a local tax professional to ensure you are claiming all the incentives you are eligible for and applying them in the correct order.
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.