2023 Solar Incentives Guide for Palmdale, CA - Tax Credits & Rebates
In this guide, we'll cover the latest solar incentives and rebates available in Palmdale.
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 March 14, 2023
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What Solar Tax Credits, Incentives, and Rebates are Available in Palmdale?
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
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/
Solar incentives are intended to encourage people to switch their home over to renewable energy by providing financial incentives that lower the burden of solar panel installation and use. The incentives could include upfront discounts, cash back or monthly credits towards your utility bill. Some incentives are given by the federal government, some by the California government and some by your utility company, county or municipality. Categories of solar incentives include:
- Tax Exemptions: These could come in the form of property tax exemptions, which would allow you to exclude the value of your solar system when paying property tax on your home. You may also qualify for an exemption on sales tax at the time of purchase.
- Solar Renewable Energy Certificate (SREC): SRECs and similar performance-based incentives might be available to you if the solar system on your home produces more than a specified (typically small) amount of electricity. Performance-based incentives are generally handled by the state government. You can sell the SRECs you receive to your utility company or other buyers, and the money you make is normally considered part of your taxable income.
- Tax Credits: These credits are dollar-for-dollar reductions (not deductions) in how much income tax you owe the federal government.
- Rebates: Rebates, or partial refunds after a purchase, are usually given before any solar tax credits are calculated. Rebates can be provided by your local utility company, by your state or by your county.
- Net Metering: You can sign a net metering contract with your Palmdale utility company. This agreement may apply to all or a percentage of the excess electricity your solar panels generate. Your utility company will then deduct this value from your utility bill each month.
Federal Solar Incentives
Federal solar incentives are likely to be the first thing that you think of when you think about solar incentives. A federal incentive many people are probably familiar with is the Federal Solar Investment Tax Credit (ITC). The ITC is a tax credit for a specific percentage of the cost of your solar system.
The ITC is applied to the total cost of solar panel installation, including the panels themselves as well as labor, accessories and equipment. You can claim this credit for panels installed after January 1, 2006 on a primary or secondary residence that you own, as long as it 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 amount you can claim.
To know exactly how much money the ITC could save you, contact your local Palmdale solar panel installation expert.
In August 2022, the ITC (now called the Clean Energy Credit) was expanded and extended by the passage of the Inflation Reduction Act. 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; this amount will then decrease slightly each year until the end of the current program. The expansion also makes it easier to get credit for energy storage systems, starting in 2023.
Click here to learn more about the new Inflation Reduction Act. Your local Palmdale 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 may be provided at the state and local level. Like with federal incentives, these can include rebates, tax credits and more. Certain incentives are ongoing, while others are offered for only a limited time. Your local incentives could come from your county or municipality, or from the California government.
Next Steps for Installing Solar in Palmdale
There are many types of solar incentives: those offered by local utility companies, those offered by the federal government and those offered by the California government, to name a few. The use of solar energy has grown enormously in the last 15 years, partially due to these incentives. Talking to your local Palmdale solar panel installation expert is an excellent first step towards making sure you get all the incentives you qualify for when you switch to solar energy.
Best Regional Coverage
Momentum Solar
- Great warranty coverage
- Representatives are experts on local policies
- Concierge service ensures steady communication
- Slightly limited service offerings
Best Technology
Tesla Energy
- Price-match guarantee
- Sleek, efficient, and durable solar panels
- Best solar battery on the market
- Some reported issues with customer service
- Customer service varies by local dealer
EcoWatch's Palmdale, CA Solar Incentives FAQs
Can I get any financial incentives when I add solar panels to a rental property, vacation home or commercial property?
Many solar incentives are intended to apply to a property located within the United States that you own; most secondary residences fall under this distinction. Other solar incentives may be available for commercial properties, depending on the specifics. We recommend getting in touch with your local solar installer and/or tax professional to fully understand what incentives may apply to your specific situation.
How do I know if I qualify for different solar incentives?
Broadly, solar incentives apply to:
- a new solar panel system
- installed on property that you own
- within the U.S.
- between the dates specified by a particular incentive.
Specific incentives, including ones handled by the California government or by your county/municipality, may have additional qualifications. Talk to your local Palmdale solar installer to find out what incentives your project may qualify for.
When does the federal solar tax credit end?
The federal solar tax credit, previously called the ITC and now named the Clean Energy Credit, is slated to end on January 1, 2035. The current 30% credit will end in 2032, replaced by a 26% credit in 2033 and a 22% credit in 2034.
If I switch my appliances out for ones that utilize solar energy, are there any credits I can claim?
The recently passed Inflation Reduction Act provides a number of incentives designed to reward homeowners for making eco-friendly upgrades. Some incentives include tax credits and rebates for installing new electric appliances. You can find more details about these incentives here.
Can I qualify for incentives both towards the up-front cost of solar panels, and later as reimbursement?
Yes, you can receive both tax credits and rebates towards the cost of solar panels. Depending on which incentives you are receiving, they may apply in a different order. Make sure that you talk to your solar installer or a local tax professional to ensure that you are claiming incentives correctly and getting the most money possible.
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.