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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By EcoWatch Local Advisors
Data Analysis: James Savino
Ranking Methodology: Karsten Neumeister
Updated March 14, 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
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" broadly refers to financial incentives implemented by the government and by solar companies to encourage increased use of renewable energy by making the installation and use of solar panels more affordable. Different kinds of incentives, including cash back, discounts or credit towards your monthly utility bill, may be available to you. Certain incentives may be offered by the California government, by your utility company or by county or municipality, while others are federal. Some solar incentives you might qualify for are:
- Rebates: Rebates, or partial refunds after a purchase, are typically given before any solar tax credits are calculated. Rebates may be given by your local utility company, by your state or by your county.
- Solar Renewable Energy Certificate (SREC): In general, solar systems that produce more than a specified (normally small) amount of electricity will qualify for SRECs or similar performance-based incentives. SRECs and similar incentives are typically given by your state government. When you receive an SREC, you can sell it to your utility company or another buyer, and the money you receive is normally considered part of your taxable income.
- Tax Credits: These credits are dollar-for-dollar reductions (not deductions) in how much in taxes you owe the government.
- Net Metering: Make sure you talk with your Ontario utility company about signing a net metering contract. This allows you to receive credit towards your monthly utility bill for the value of excess energy generated by your solar panels. You may receive either a dollar-for-dollar credit or a percentage of the value.
- Tax Exemptions: Your solar panels could qualify for exemptions on both sales and property tax. Sales tax exemptions come into effect at the time of purchase. Property tax exemptions allow you to ignore the value that solar panels add when calculating property taxes on your home.
Federal Solar Incentives
When you think about solar incentives, you probably think of federal incentives first. You've likely heard of the Federal Solar Investment Tax Credit, or ITC. This is a tax credit equal to a predetermined percentage of the money you spend on solar panels for your home.
The ITC can be applied to solar systems installed after January 1, 2006 on a primary or secondary residence in the United States that you own. The credit initially covered 30% of the total cost — for panels, accessories, equipment and labor — although the percentage may range from 26-30%, depending on when your solar project was undertaken. There is no cap on the claim amount.
To better understand exactly how much money the ITC could save you, contact your local Ontario solar panel installation expert.
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 new Clean Energy Credit is valid until 2035. American homeowners can now receive a 30% credit for solar systems installed between 2022 and 2032. The credit will then see a slight annual decrease until the date of expiration. 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. The easiest way to learn more about how the new Clean Energy Credit applies to you is to reach out to your local Ontario solar panel installers with your questions.
State & Local Solar Incentives
Rebates, tax credits and more can be provided at multiple levels. On top of federal solar incentives, there are often state and local ones as well. The incentives — which may be handled by your county or municipality, or by the state of California — might be offered on an ongoing basis, or for only a limited time.
Next Steps for Installing Solar in Ontario
The variety of available solar incentives has enormously increased the adoption of solar energy nationwide over the past 15 years. You might qualify for solar incentives from the federal government, the California government or from your local utility company. Speak with your local solar panel installation expert today to discover more about the various programs and to save as much money as possible on a solar system for your Ontario home.
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EcoWatch's Ontario, CA Solar Incentives FAQs
If my house already has solar panels, can I still claim incentives?
You should plan to talk to someone from the company that installed your solar system — or call a local Ontario solar installer — to learn about which incentives you may qualify for. If your solar panels were installed after January 1, 2022, you likely qualify for the newly increased 30% tax credit under the Inflation Reduction Act. Systems installed between 2006 and 2021 may qualify for a tax credit of 26-30%.
Who installs solar panels near me?
To find the best solar panel installer in your area, check out our guide to the top solar companies in Ontario.
When does the federal solar tax credit end?
The federal solar tax credit, previously called the ITC and now called 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.
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 receive but typically yes, you can claim multiple types of incentives for your solar project. Talk with your solar installer or a local tax professional to ensure you are claiming all possible incentives and applying them in the correct order.
Can I use both solar and another type 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 plan with your local Ontario solar installer. They can help you with the plan for your project and also help you understand the various incentives that you will or won't 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.