2023 Solar Incentives Guide for Placentia, CA - Tax Credits & Rebates
In this guide, we'll cover the latest solar incentives and rebates available in Placentia.
You'll learn about:
- Local & State Solar Incentives
- Federal Tax Credits (Updated for 2023 and beyond)
- Ways to optimize your solar investment
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What Solar Tax Credits, Incentives, and Rebates are Available in Placentia?
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
Solar incentives are meant to help mitigate the cost of installing solar panels on your home. Financial incentives like these are designed to encourage more Americans to make the switch to renewable energy. Incentives might include things like discounts, cash back or monthly utility bill credits. Some incentives are offered federally, while others are offered by the state of California or your utility company, county or municipality. Categories of solar incentives include:
- Rebates: A solar rebate is a partial refund after the purchase of your solar panels. These 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 calculating tax credits.
- Tax Exemptions: These might come in the form of property tax exemptions, which allow you to ignore the value added by your solar panels when calculating the taxes you pay on your home. They may also include exemptions on sales tax at the time of purchase.
- Tax Credits: Tax credits reduce, dollar-for-dollar, the total amount of tax you owe the federal government. Tax credits are different from tax deductions.
- Net Metering: Be sure to speak with your Placentia utility company about signing a net metering agreement. This allows you to get a credit towards your utility bill every month for the value of excess energy your solar panels generate. You may receive either a dollar-for-dollar credit or a percentage of the value.
- Solar Renewable Energy Certificate (SREC): SRECs and similar other performance-based incentives might be available to you if the solar system on your home produces more than a specified (usually small) amount of electricity. Performance-based incentives are normally handled at the state level. You can sell your SRECs to your utility company or other buyers, and the money you receive in return is normally considered part of your taxable income.
Federal Solar Incentives
When someone says "solar incentives," you probably think of federal incentives first. A federal incentive that most people are probably familiar with is the Federal Solar Investment Tax Credit (ITC). This incentive is a tax credit for a certain percentage of the cost of your solar system.
The ITC originally covered 30% of the total cost of solar panel installation, and has fluctuated slightly over time between 26-30%. The installation date of your solar system will determine what percentage you qualify for. The total installation cost includes the panels themselves as well as the cost of equipment, accessories and labor. There is no maximum claim amount. The ITC can be applied to solar panels installed after January 1, 2006 on your primary or secondary residence. The residence must be owned by you and in the United States.
To more fully understand how the ITC will apply to your situation, get in touch with your local Placentia solar panel installation expert and request more information.
In August 2022, the Inflation Reduction Act laid out new provisions for the ITC, now dubbed the Clean Energy Credit. The Clean Energy Credit is valid until 2035. Solar installation projects started after January 1, 2022 and completed by the end of 2032 may qualify for a 30% tax credit; the amount will then decrease slightly on a yearly basis until the end of the current program. Starting in 2023, the expansion will also make credits for energy storage systems even easier to claim.
More information about the new Inflation Reduction Act can be found here. Your local Placentia solar panel installer can answer any questions you have and explain how the new Clean Energy Credit applies to you.
State & Local Solar Incentives
Some solar incentives are often also provided by state and local governments. As with federal incentives, these could include rebates, tax credits and more. These incentives — which may be handled by your county or municipality, or by the state of California — could be offered on an ongoing basis, or for only a limited time.
Next Steps for Installing Solar in Placentia
The nationwide use of solar energy has gone up tremendously in the past 15 years, in part thanks to the increase in availability of solar incentives. You might receive these incentives from your local utility company, the California government or the federal government. Your local Placentia solar panel installer can help you learn more about which incentives you can apply for, and get you on track to switch to renewable energy today.
EcoWatch's Placentia, CA Solar Incentives FAQs
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