2023 Solar Incentives Guide for Palm Springs, CA - Tax Credits & Rebates
In this guide, we'll cover the latest solar incentives and rebates available in Palm Springs.
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 Springs?
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" refers to financial incentives implemented by the government and by solar companies to encourage the use of renewable energy by making the installation and use of solar panels more affordable. Incentives could include things like discounts, cash back or monthly utility bill credits. Some incentives are offered federally, while others are handled by the California government or your utility company, county or municipality. You might qualify for any of the following types of solar incentives:
- Solar Renewable Energy Certificate (SREC): SRECs and similar performance-based incentives might be available to you if the solar system on your home produces over a specified (typically small) amount of electricity. This category of incentives is usually handled at the state level. You can sell any SRECs you have to your utility company or other buyers, and the money you receive in return is typically considered part of your taxable income.
- Rebates: Solar rebates can be offered by your state or county, or by your local utility company. These rebates are essentially cash back that is applied after you purchase a solar system and before tax credits are calculated.
- Tax Exemptions: Your solar panels could qualify for exemptions on both sales and property tax. Sales tax exemptions are applied at the time of purchase. Property tax exemptions let you exclude the value that solar panels add when you are calculating property taxes on your home.
- Net Metering: Net metering factors in once your solar system is up and running. If you have a net metering agreement with your Palm Springs utility company, the company will subtract the value of the excess energy your solar system produces from your monthly utility bill. In some areas, this is a dollar-for-dollar credit, while in others you might receive a refund equivalent to a percentage of the value.
- Tax Credits: Tax credits are dollar-for-dollar reductions (not deductions) in how much in taxes you owe the federal government.
Federal Solar Incentives
Federal solar incentives are likely to be the first thing that you think of when thinking about solar incentives. It's likely that you've heard of the Federal Solar Investment Tax Credit, or ITC. This 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 solar panels installed on your primary or secondary residence in the United States. The solar panels have to have been installed after January 1, 2006 on a property owned by you for you to be eligible for the credit. Initially, the ITC applied to 30% of all installation costs (panels, accessories, equipment and labor), although the covered amount has fluctuated slightly over time between 26-30%. The installation date of your solar system will determine what percentage you are eligible for. There is no cap on the amount you can claim.
To more fully understand how the ITC may apply to you, contact your local Palm Springs solar panel installer and request more information.
In August 2022, the Inflation Reduction Act laid out new provisions for the ITC, now titled the Clean Energy Credit. Under the new program, solar installation projects started after January 1, 2022 and completed by the end of 2032 can qualify for a 30% tax credit. The amount of the credit will then decrease slightly each year until the current Clean Energy Credit expires in 2035. Beginning in 2023, it will also be easier to qualify for credits for energy storage systems under the new laws.
Click here to learn more about the new Inflation Reduction Act. Your local Palm Springs solar panel installer can answer any questions you have and explain how the new Clean Energy Credit may apply to you.
State & Local Solar Incentives
Rebates, tax credits and more can be claimed at multiple levels. On top of federal solar incentives, there are often state and local ones as well. Some incentives are offered for only a limited time, while others are ongoing. Your local solar incentives could come from the California government, or from your specific county or municipality.
Next Steps for Installing Solar in Palm Springs
Solar incentives can be offered by the California government, the federal government or your local utility company. The large number of available solar incentives has helped nationwide use of solar energy increase greatly in the last 15 years. If you're prepared to switch over to solar energy, calling your local Palm Springs solar panel installation expert is an excellent place to start.
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EcoWatch's Palm Springs, CA Solar Incentives FAQs
How do I learn if I qualify for certain solar incentives?
It's best to speak with your local Palm Springs solar installer to get an understanding of which incentives your project will qualify for. Generally, solar incentives apply to new solar systems installed on property you own (in the U.S.) between the dates specified by the incentive. Some incentives, such as those given by the state of California, may have other requirements.
My home already has solar panels installed. Do I qualify for any incentives?
You should plan to talk to a representative from the company that installed your solar panels — or get in touch with a local Palm Springs solar installer — to clarify which incentives you might qualify for. If your system was installed after January 1, 2022, you likely qualify for the recently increased 30% tax credit under the Inflation Reduction Act. Solar systems installed between 2006 and 2021 may qualify for a tax credit of 26-30%.
Who installs solar panel systems near me?
To find the right solar panel installer for you, check out our guide to Palm Springs' top solar panel companies.
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 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 a combination of multiple types of renewable energy to power my home?
You can use multiple types of renewable energy, or a combination of renewable and non-renewable energy, to power your home. Be sure to go over your plan with your local Palm Springs solar installer. They can help you as you plan for your project and educate you on the 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.