2023 Solar Incentives Guide for Orange, CA - Tax Credits & Rebates
In this guide, we'll cover the latest solar incentives and rebates available in Orange.
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 Orange?
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
Solar incentives are intended to encourage people to switch to renewable energy by offering financial incentives that lower the burden of solar panel installation and use. Incentives could include things like discounts, cash back or monthly utility bill credits. Some incentives are offered by the federal government, while others are provided by the state of California or your specific utility company, county or municipality. Types of solar incentives might include:
- Solar Renewable Energy Certificate (SREC): Typically, solar systems that produce over a threshold (usually small) amount of electricity qualify for SRECs or other similar performance-based incentives. SRECs and performance-based incentives in general are typically given at the state level. When you receive an SREC, you can sell it to your utility company or another buyer, and generally the money you make is normally considered part of your taxable income.
- Rebates: A rebate is a partial refund credited to your account after you've paid for your solar system. Rebates may be offered by your local utility company, your county or your state. The rebates are usually applied before tax credits are calculated.
- Tax Exemptions: Your solar panel system may 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 added by your solar panels when calculating property taxes on your house.
- Tax Credits: Tax credits are dollar-for-dollar reductions in the amount of income tax that you owe the federal government. (A tax credit is different from a tax deduction.)
- Net Metering: Net metering is an incentive you can get after your solar panels are up and running. If you've signed a net metering agreement with your Orange utility company, the company will subtract the value of the excess energy your solar system produces from your utility bill each month. In some areas, this credit is dollar-for-dollar, while in other places you might make back a percentage of the value.
Federal Solar Incentives
When thinking about solar incentives, federal incentives are likely the first thing that comes to mind. The solar incentive that you may be most familiar with is the Federal Solar Investment Tax Credit (ITC), which gives you a credit on your taxes equal to a specified percentage of your solar system's cost.
The ITC was originally for 30% of the total cost of installing a solar system, and has fluctuated slightly over time between 26-30%. The installation date of your solar system will determine what percentage you qualify for. The total installation cost includes the panels themselves as well as the cost of labor, equipment and accessories. There is no maximum amount you can claim. The ITC can be applied to solar panels installed after January 1, 2006 on your primary or secondary residence. The residence must be in the United States and owned by you.
Your local Orange solar panel installation expert can provide you with more information about the ITC and how it might apply to your situation.
The Inflation Reduction Act, passed in August 2022, added more provisions to the ITC (as well as renaming it to the Clean Energy Credit). The new Clean Energy Credit extends until 2035. You are now eligible for a 30% credit for solar systems installed between January 1, 2022 and December 31, 2032. This credit will then decrease annually until it expires. The expansion also makes claiming credit for energy storage systems easier than ever before, beginning in 2023.
More information about the new Inflation Reduction Act can be found here. The best way to fully understand how the new Clean Energy Credit might apply to you is to get in touch with your local Orange solar panel installation expert.
State & Local Solar Incentives
In addition to federal solar incentives, there are often also state ones. Tax credits, rebates and more may be available at a more local level. These incentives might be provided by the California government, or by your county or municipality. Certain incentives are available for a limited time, while others are ongoing.
Next Steps for Installing Solar in Orange
Solar incentives may be offered by the federal government, the California government or your local utility company. The growing number of incentives available has facilitated the nationwide growth of solar energy use in the last 15 years. Talking to your local Orange solar panel installation expert is the right first step towards making sure you get all the incentives you qualify for when you switch to solar energy.
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EcoWatch's Orange, CA Solar Incentives FAQs
Can I receive any incentives when I add solar panels to a vacation home, rental property or commercial property?
Many solar incentives apply to a property located within the United States that you own; most secondary residences fall under this distinction. There may be other solar incentives available for commercial properties, depending on the specifics. We recommend reaching out to your local solar installer and/or tax professional to better understand what incentives may apply to your specific situation.
How much can I save on my electric bill annually if I add solar panels to my Orange home?
Typically, homeowners in Orange who install solar panels save approximately $1,370.93 per year, or approximately $26,047.59 over 20 years after making the switch.
Who installs solar panel systems near me?
To find the best solar panel installer in your area, check out our guide to the top solar companies in Orange.
What are some environmental benefits of installing solar panels on my house?
You can reduce your carbon footprint by 250 pounds of CO2 a year when you install solar panels. This adds up to around 5,000 pounds in 20 years. Solar is also a renewable energy source, which means that switching your home over lessens the drain on our planet's resources.
I want to trade in my old appliances for ones that are more energy-efficient. Are there any benefits I can claim?
The recently passed Inflation Reduction Act introduces several incentives that 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.
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.