2023 Solar Incentives Guide for Ontario, CA - Tax Credits & Rebates
In this guide, we'll cover the latest solar incentives and rebates available in Ontario.
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 Ontario?
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 help mitigate the cost of installing solar panels on your home. Financial incentives like these are intended to encourage more Americans to convert their home partially or fully to renewable energy. Incentives can include things like discounts, cash back or credit on your utility bill each month. Some incentives are provided by the federal government, while others are offered by the California government or your specific utility company, county or municipality. Some broad categories of solar incentives include:
- Net Metering: Net metering factors in after your solar system is up and running. If you've signed a net metering agreement with your Ontario utility company, the company will subtract the value of the excess energy produced by your solar system from your monthly utility bill. In some locations, this is a dollar-for-dollar credit, while in others you might get refunded a percentage of the value.
- Solar Renewable Energy Certificate (SREC): SRECs and other performance-based incentives are generally handled by your state government. Once your solar panel system meets the threshold (generally a small amount of energy production), you are eligible to receive SRECs that can be sold to your utility company or other buyers. The money you make is usually considered part of your taxable income.
- Tax Credits: Tax credits reduce, dollar-for-dollar, how much income tax you owe the government. Tax credits are different from tax deductions.
- Rebates: Some solar companies will help you claim a rebate, or partial refund after purchase, for your solar system. States or counties will also offer limited-time rebates at various times. The value of a rebate will usually come off your total price before any tax credits are calculated.
- Tax Exemptions: Your solar panels may qualify for exemptions on both sales and property tax. Sales tax exemptions are effective at the time of purchase. Property tax exemptions let you exclude the added value of the solar panels when calculating property taxes on your house.
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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 allows you to claim a tax credit for a set percentage of the cost of your solar system.
The ITC applies to solar panels installed on your primary or secondary residence in the United States. The solar system has to 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, equipment, accessories and labor), although this amount has fluctuated slightly over time between 26-30%. The amount you qualify for will depend on when your solar system was installed. There is no cap on the claim amount.
To best understand how the ITC might apply to your situation, contact your local Ontario solar panel installation expert and ask for more information.
In August 2022, the ITC (now referred to as the Clean Energy Credit) was expanded and extended by the passing of the Inflation Reduction Act. The Clean Energy Credit runs until 2035. Solar installation projects started after January 1, 2022 and completed by the end of 2032 may qualify for a 30% tax credit. This amount will be decreased slightly on a yearly basis until the current program ends. Starting in 2023, the expansion to the program will also make it easier to get credit for energy storage systems.
Click here to learn more about the new Inflation Reduction Act. The easiest way to learn more about how the new Clean Energy Credit will apply to you is to reach out to your local Ontario solar panel installers with your questions.
State & Local Solar Incentives
Some solar incentives are often also provided by state and local governments. As with federal incentives, these might include rebates, tax credits and more. Incentives might be given by the state of California, or by your county or municipality. Certain incentives may be available for only a limited time, while others are ongoing.
Next Steps for Installing Solar in Ontario
Solar incentives can be offered by your local utility company, the federal government or the California government. The large number of solar incentives available has contributed to a large increase in solar energy use in the last 15 years. When you're prepared to make the change to solar energy, talking to your local Ontario solar panel installation expert is an excellent place to start.
EcoWatch's Ontario, CA Solar Incentives FAQs
How do I know if I qualify for specific solar incentives?
Typically, solar incentives apply to:
- a new solar system
- installed on a property that you own
- within the U.S.
- within the date range specified by a particular incentive.
Specific incentives, including those given out by the California government or by your county/municipality, sometimes have additional qualifications. Get in touch with your local Ontario solar installer to discover what incentives your project will qualify for.
How much can I save on my electric bill annually if I add solar panels to my Ontario home?
Typically, homeowners in Ontario who install solar panels save about $1,307.60 per year, or about $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 titled the Clean Energy Credit, is scheduled 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.
If I change out my appliances for ones that can use solar energy, are there any incentives that I can claim?
The new Inflation Reduction Act creates a number of new financial incentives for making eco-friendly improvements to your home. More details on these incentives, including information about incentives for purchasing new appliances, can be found here.
Can I use solar and another type of renewable energy in combination to power my home?
Yes, you can utilize 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. Make sure that you discuss the details of your plan with your local Ontario solar panel installer, so that you understand what you'll need and what kinds of incentives 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.