2023 Solar Incentives Guide for Orcutt, CA - Tax Credits & Rebates
In this guide, we'll cover the latest solar incentives and rebates available in Orcutt.
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 May 04, 2023
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What Solar Tax Credits, Incentives, and Rebates are Available in Orcutt?
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" covers a wide range of financial incentives implemented to make installing and using solar panels more affordable. This is done to encourage people to switch to renewable energy. You may qualify for different types of incentives, such as cash back, discounts or monthly utility bill credits, depending on your situation. Some incentives come from your specific utility company, county or municipality, some from the state of California and others from the federal government. Types of solar incentives might include:
- Rebates: Solar rebates might be provided by your county or state, or by your local utility company. These rebates work as partial refunds that are applied after you purchase solar panels and before tax credits are calculated.
- Net Metering: Don't forget to speak to your Orcutt utility company about signing a net metering contract. This will allow you to receive credit towards your monthly utility bill for the value of excess energy your solar panels generate. You could receive either a dollar-for-dollar credit or a percentage of the value.
- Solar Renewable Energy Certificate (SREC): In general, solar systems that produce over a threshold (generally small) amount of electricity qualify for SRECs or similar performance-based incentives. SRECs and similar incentives are typically given at the state level. SRECs can be sold to your utility company or another buyer, and the money you receive is normally considered part of your taxable income.
- Tax Exemptions: These could come in the form of property tax exemptions, which can let you exclude the value added by your solar panels when calculating the taxes you pay on your house. You may also qualify for an exemption on sales tax at the time of purchase.
- Tax Credits: Tax credits are dollar-for-dollar reductions in the amount of income tax that you owe the government. (A tax credit is different from a tax deduction.)
Federal Solar Incentives
When thinking about solar incentives, federal incentives might be the first thing that comes to mind. It's likely that you've heard of the Federal Solar Investment Tax Credit, or ITC. This incentive is a tax credit that reduces your taxes by a predetermined percentage of the money you spend installing solar panels.
The ITC can be applied to the total cost of installing solar panels, including the panels themselves as well as equipment, accessories and labor. You can claim this credit for panels installed after January 1, 2006 on a primary or secondary residence that you own and that is located in the United States. From its original value of 30% of the total cost, the credit has fluctuated slightly between 26-30%, and you may qualify for varying percentages depending on when your project was completed. There is no maximum claim amount.
Reaching out to your local Orcutt solar panel installation expert is the best way to learn more about how the ITC applies to you.
The Inflation Reduction Act, passed in August 2022, made some changes to the ITC (as well as retitling it the Clean Energy Credit). The new Clean Energy Credit now runs until 2035. American homeowners are now eligible for a 30% credit for solar systems that began installation after January 1, 2022 and are completed by the end of 2032. This new credit will then be decreased by a few percentage points every year until the date of expiration. Beginning in 2023, it will also be easier to qualify for credits for energy storage systems under this new program.
Click here to learn more about the new Inflation Reduction Act. The easiest way to understand how the new Clean Energy Credit might apply to you is to get in touch with your local Orcutt solar panel installers.
State & Local Solar Incentives
Some solar incentives may be offered at the local or state level. Similar to federal incentives, these might include tax credits, rebates and more. Certain incentives are ongoing, while others might only be available for a limited time. These incentives may be provided by your county or municipality, or by the California government.
Next Steps for Installing Solar in Orcutt
Nationwide solar energy use has gone up significantly in the last 15 years, in part due to the proliferation of solar incentives. You can obtain these incentives from the federal government, the California government or your local utility company. If you're prepared to switch over to solar energy, reaching out to your local Orcutt solar panel installation expert is a great first step.
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EcoWatch's Orcutt, CA Solar Incentives FAQs
How do I know if I qualify for specific solar incentives?
It's best to speak with your local Orcutt solar installer for a better understanding of which incentives your project may qualify for. Usually, solar incentives apply to new solar panel systems installed on a property you own (in the U.S.) between the dates specified by the incentive. Some incentives, such as those provided at the level of the California government, might have other requirements.
If I already have solar panels, can I still claim incentives?
If your solar panels were installed after January 1, 2022, you may qualify for the recently increased 30% tax credit under the Inflation Reduction Act. If you had your system installed between 2006 and 2021, you may qualify for a tax credit between 26% and 30%, depending on the year it was installed. Speaking with the company that installed your system, or any local Orcutt solar installer, can help you learn what incentives you qualify for.
What are the environmental benefits of switching to solar?
Solar energy is renewable — by switching where you get your energy, you can help reduce the strain on our planet's resources. A solar system can also reduce your home's CO2 emissions by 250 pounds yearly, or roughly 5,000 pounds over 20 years.
When does the federal solar tax credit end?
The federal solar tax credit, formerly known as the ITC and now titled the Clean Energy Credit, is slated to end 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 use solar and another type of renewable energy in combination 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 talk through your ideas with your local Orcutt solar installation expert. They can help you with the plan for your project and give you an understanding of 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.