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 September 15, 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/
The term "solar incentives" refers to financial incentives put in place by solar companies and the government to encourage the use of renewable energy by making installing and using solar panels more affordable. You may qualify for various kinds 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. Categories of solar incentives include:
- Rebates: Rebates, or partial refunds after a purchase, are typically given before any solar tax credits are calculated. These rebates might be provided by your local utility company, by your county or by your state.
- Net Metering: Don't forget to talk to your Palmdale utility company about signing a net metering agreement. This allows you to get a credit towards your monthly utility bill for the value of excess energy generated by your solar panels. You may receive either a dollar-for-dollar credit or a percentage of the value.
- Tax Credits: Tax credits lower, dollar-for-dollar, how much income tax you owe the federal government. These are different from tax deductions.
- Tax Exemptions: Your solar system could qualify for both sales tax and property tax exemptions. Sales tax exemptions are applied at the time of purchase. Property tax exemptions allow you to exclude the value added by your solar panels when you are calculating property taxes on your house.
- Solar Renewable Energy Certificate (SREC): SRECs and other performance-based incentives are typically handled by your state government. Once your solar panel system meets a certain threshold (normally a small amount of energy production), you can receive SRECs that can then be sold to your utility company or other buyers. The money you receive is generally considered part of your taxable income.
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Federal Solar Incentives
Federal solar incentives are probably the first thing that comes to mind 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 equal to a predetermined percentage of the money you spend installing solar panels.
The ITC originally covered 30% of the cost of installing solar panels, and has fluctuated slightly over the years between 26-30%. The percentage you qualify for will depend on when your solar system was installed. The total installation cost includes the panels themselves as well as the cost of accessories, equipment and labor. There is no maximum claim amount. The ITC applies to solar systems installed after January 1, 2006 on your primary or secondary residence. The residence must be in the United States and owned by you.
Speaking with your local Palmdale solar panel installer is the best way to learn more about how the ITC could apply to you.
The Inflation Reduction Act, passed in August 2022, made some changes to the ITC (as well as renaming it to the Clean Energy Credit). The new Clean Energy Credit now runs until 2035. You can now receive a 30% credit for solar systems installed between January 1, 2022 and December 31, 2032. This credit will then see a slight annual decrease until it expires. Starting in 2023, the expansion to the program will also make claiming credit for energy storage systems easier than ever before.
More information about the new Inflation Reduction Act can be found here. The best way to learn more about how the new Clean Energy Credit might apply to you is to reach out to your local Palmdale solar panel installation expert with your questions.
State & Local Solar Incentives
Some solar incentives are often also provided at the state and local level. Similar to federal incentives, these could include rebates, tax credits and more. Some incentives are ongoing, while others might only be available for a limited time. They may be provided by your county or municipality, or by the California government.
Next Steps for Installing Solar in Palmdale
The nationwide use of solar energy has gone up tremendously in the past 15 years, in part thanks to the growth in the number of solar incentives. You can obtain these incentives from your local utility company, the federal government or the California government. We recommend talking to your local Palmdale solar installation expert for more information about these incentives and to be sure that you're getting the most money possible for your solar panels.
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 you own that is located within the United States; 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 best understand what incentives will apply to your specific situation.
How do I learn if I qualify for specific solar incentives?
In most cases, solar incentives apply to:
- a new solar system
- installed on property you own
- within the U.S.
- between the dates specified by a particular incentive.
Specific incentives, including those given out by the California government or by your county/municipality, might have additional qualifications. Talk to your local Palmdale solar installer to discover what incentives your project will qualify for.
Who installs solar panel systems near me?
To learn about the best solar panel installers near you, take a look at our article on Palmdale's best solar panel companies.
I want to trade in my old appliances for ones that are more energy-efficient. Are there any incentives I can get?
Under the new Inflation Reduction Act, there are several new financial incentives to encourage you to make eco-friendly improvements to your home. More details regarding these incentives, including information about incentives for purchasing new appliances, can be found here.
Can I qualify for incentives both towards the up-front cost of solar panels, and later as reimbursement?
The order in which incentives are applied may vary depending on which incentives you receive but generally yes, you can receive multiple types of incentives for your solar project. Talk with your solar installer or a local tax professional to ensure you are claiming all possible incentives and applying them in the correct order.
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.