2023 Solar Incentives Guide for Palm Desert, CA - Tax Credits & Rebates
In this guide, we'll cover the latest solar incentives and rebates available in Palm Desert.
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 Palm Desert?
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 phrase "solar incentives" broadly refers to financial incentives implemented by the government and by solar companies to encourage increased use of renewable energy by making installing and using solar panels more affordable. Various kinds of incentives, including cash back, discounts or monthly utility bill credits, might be available to you. Certain incentives may be provided via the state of California, by your utility company or by county or municipality, while others are federal. Categories of solar incentives include:
- Net Metering: Net metering factors in after your solar system is up and running. If you have a net metering agreement with your Palm Desert utility company, the company will subtract the value of the excess energy your solar system produces from your utility bill each month. In some locations, this is a dollar-for-dollar credit, while in other places you may get refunded a percentage of the value.
- Solar Renewable Energy Certificate (SREC): SRECs and similar performance-based incentives might be available to you if your solar system produces over a specified (usually small) amount of electricity. This category of incentives is usually handled by the state government. You can sell SRECs to your utility company or other buyers, and the money you make is typically considered part of your taxable income.
- Tax Exemptions: These may come in the form of property tax exemptions, which let you ignore the value of your solar system when paying taxes on your home. You could also look for exemptions on sales tax at the time of purchase.
- Rebates: A solar rebate is a partial refund given after you've purchased your solar system. Rebates could be offered by your local utility company, your state or your county. The cash back that you get from the rebates is normally applied before tax credits are calculated.
- Tax Credits: Tax credits are dollar-for-dollar reductions (not deductions) in how much in taxes you owe the government.
Federal Solar Incentives
When thinking about solar incentives, federal incentives may be the first thing that comes to mind. The Federal Solar Investment Tax Credit, or ITC, is likely the most well-known federal solar incentive. The ITC offers a tax credit for a specific percentage of the cost of your solar system.
The ITC applies towards solar systems installed after January 1, 2006 and lets you deduct from your taxes a percentage of the total cost of solar panels, labor, accessories and equipment. You can receive this credit for solar panels installed on a primary or secondary residence in the United States that you own. Originally, you could claim 30% of the total cost, although depending on when the project was completed, your credit may range from 26-30%. There is no maximum claim amount.
To understand exactly how much the ITC could save you, get in touch with your local Palm Desert solar panel installer.
In August 2022, the Inflation Reduction Act expanded and extended the ITC, now called the Clean Energy Credit. The Clean Energy Credit lasts until 2035. Any solar installation project that is completed between January 1, 2022 and December 31, 2032 may qualify for a 30% tax credit. The amount will decrease slightly each year until the end of the current program. The program expansion also makes credits for energy storage systems even easier to claim, starting in 2023.
Click here to learn more about the new Inflation Reduction Act. Your local Palm Desert 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
Some solar incentives are often also offered at the local or state level. Like with federal incentives, these may include rebates, tax credits and more. Some incentives are ongoing, while others are offered for only a limited time. Your local solar incentives might come from your county or municipality, or from the California government.
Next Steps for Installing Solar in Palm Desert
You can apply for and receive solar incentives from the California government and the federal government, as well as from your local utility company. The increased availability of solar initiatives over the last 15 years has helped increase nationwide solar energy use enormously. It is a good idea to talk to your local Palm Desert solar installation company to learn more about these incentives and to ensure that you're getting all of the money you can for your solar panels.
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EcoWatch's Palm Desert, CA Solar Incentives FAQs
I already have solar panels. Are there any incentives that I qualify for?
If your solar system was installed after January 1, 2022, you may qualify for the newly increased 30% tax credit under the Inflation Reduction Act. If your system was installed between 2006 and 2021, you might qualify for a tax credit between 26% and 30%, depending on the date of installation. Talking to the company that installed your system, or any local Palm Desert solar installer, can help you understand what incentives you can apply for.
What are some environmental benefits of adding solar panels to my house?
Solar energy is a renewable energy source — by changing where you get your energy, you help lessen the strain on our planet's resources. You can also reduce the CO2 emissions from your home by 500 pounds a year, or around 11,000 pounds over 20 years.
How long until the federal solar tax credit ends?
The Clean Energy Credit (previously called 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.
Can I use a combination of solar and another type of renewable energy to power my home?
Yes, you can use multiple types of renewable energy to power your home, such as a combination of solar and geothermal. You can also use both renewable energy sources and a non-renewable backup source of energy. Be sure to discuss your plan with your local Palm Desert solar panel installer, to make sure you know 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.