2023 Solar Incentives Guide for Palermo, CA - Tax Credits & Rebates
In this guide, we'll cover the latest solar incentives and rebates available in Palermo.
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 May 04, 2023
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What Solar Tax Credits, Incentives, and Rebates are Available in Palermo?
Property Tax Exclusion for Solar Energy Systems and Solar Plus Storage System
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/
The phrase "solar incentives" generally refers to financial incentives designed to encourage people to use renewable energy by making solar panels more affordable. You might be eligible for various types of incentives, including cash back, discounts or credit towards your monthly utility bill, depending on your situation. Certain incentives come from your specific utility company, county or municipality, some from the California government and others from the federal government. Some solar incentives you might qualify for are:
- Tax Exemptions: Sales tax exemptions are effective at the time of purchase for your solar panels. Property tax exemptions let you ignore the value that your solar panels add when you're calculating the amount of property tax you need to pay on your house.
- Net Metering: You can sign a net metering contract with your Palermo utility company that will apply to all or a percentage of the excess electricity that is generated by your solar panels. Your utility company will then subtract this value from your monthly utility bill.
- Tax Credits: Tax credits lower, dollar-for-dollar, the total amount of tax you owe the government. These differ from tax deductions.
- Rebates: A rebate is a partial refund credited to your account after you've paid for your solar panels. Rebates might be offered by your local utility company, your county or your state. The cash back that you get from the rebates is normally applied before tax credits are calculated.
- Solar Renewable Energy Certificate (SREC): SRECs can be sold to your utility company (or other buyers) for cash that is generally considered part of your taxable income. In most cases, you must meet a certain (small) threshold of energy production before your solar system is eligible for SRECs or similar performance-based incentives. These kinds of incentives are typically handled by your state government.
Federal Solar Incentives
Federal solar incentives are likely to be the first thing that comes to mind when you think about solar incentives. The Federal Solar Investment Tax Credit, or ITC, is probably the best-known federal solar incentive. The ITC allows you to claim a tax credit for a specific percentage of the cost of your solar system.
The ITC applies to the value of solar panels installed on your primary or secondary residence in the United States. The solar system must have been installed on a property you own after January 1, 2006 for you to be eligible for the credit. Initially, the ITC applied to 30% of all system installation costs (panels, accessories, equipment and labor), although the amount has fluctuated over the years between 26-30%. The amount you qualify for will depend on when your solar system was installed. There is no cap on the amount you can claim.
To know exactly how much money the ITC could save you, speak with your local Palermo solar panel installation expert.
In August 2022, the ITC (now titled the Clean Energy Credit) was expanded and extended by the passing of the Inflation Reduction Act. With the new provisions, solar installation projects begun after January 1, 2022 and finished by December 31, 2032 can qualify for a 30% tax credit. This percentage will then see a slight annual decrease until the end of the current Clean Energy Credit in 2035. Starting in 2023, the program expansion will also make it easier to get credit for energy storage systems.
Click here to learn more about the new Inflation Reduction Act. Your local Palermo solar panel installation expert is the best person to answer your questions about the new Clean Energy Credit and how it may apply to you.
State & Local Solar Incentives
Rebates, tax credits and more can be provided at multiple levels. In addition to federal solar incentives, there are often state and local ones, too. These incentives might be provided by the California government, or by your county or municipality. Some incentives may be available for a limited time, while others are ongoing.
Next Steps for Installing Solar in Palermo
Solar incentives might come from the California government, the federal government or your local utility company. The growing number of solar incentives available has facilitated the nationwide growth of solar energy use in the last 15 years. Your local Palermo solar panel installation expert can give you more information about which incentives you can apply for, and get you started on the path to switching to renewable energy today.
Best Regional Coverage
Momentum Solar
- Great warranty coverage
- Representatives are experts on local policies
- Concierge service ensures steady communication
- Slightly limited service offerings
Best Warranty Coverage
Sunpro Solar
- Industry-leading warranty coverage
- Expansive service area
- Some reported communication issues
- No leases or PPAs
EcoWatch's Palermo, CA Solar Incentives FAQs
How do I know if I qualify for specific solar incentives?
It's a smart idea to get in touch with your local Palermo solar installer to get an understanding of which incentives your project will qualify for. In most cases, 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.
How much will a solar system save me on my electric bill in Palermo annually?
Generally, Palermo homeowners who install solar panels save around $1,677.29 per year, or around $31,868.45 over 20 years after making the switch.
What are the highest-rated solar panel installation companies near me?
To discover the top solar panel installers near you, read our article on Palermo's top solar panel companies.
How long until the federal solar tax credit ends?
The Clean Energy Credit (formerly named 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.
If I change out my appliances for ones that can use solar energy, are there any incentives I can claim?
Under the new Inflation Reduction Act, there are several 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.
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.