2024 Solar Incentives Guide for Rancho Santa Margarita, CA - Tax Credits & Rebates
In this guide, we'll cover the latest solar incentives and rebates available in Rancho Santa Margarita.
You'll learn about:
- Local & State Solar Incentives
- Federal Tax Credits (Updated for 2024 and beyond)
- Ways to optimize your solar investment
Solar installers are experts in maximizing your solar tax credits and rebates.
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What Solar Tax Credits, Incentives, and Rebates are Available in Rancho Santa Margarita?
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 a range of financial incentives put in place to make installing and using solar panels more affordable. This is done to encourage people to switch to renewable energy. Various types of incentives, including cash back, discounts or credit towards your monthly utility bill, 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. Some broad categories of solar incentives include:
- Net Metering: Net metering is an incentive you can get after your solar panels are up and running. If you've signed a net metering agreement with your Rancho Santa Margarita utility company, it will subtract the value of the excess energy produced by your solar system from your monthly utility bill. In some areas, this is a dollar-for-dollar credit, while in other places you may get refunded a percentage of the value.
- Tax Exemptions: Your solar panel system could qualify for both sales tax and property tax exemptions. Sales tax exemptions come into effect at the time of purchase. Property tax exemptions let you exclude the value added by your solar panels when calculating property taxes on your home.
- Rebates: A rebate is a partial refund after the purchase of your solar panels. These could be offered by your local utility company, your county or your state. The rebates are usually applied before calculating tax credits.
- Tax Credits: These credits are dollar-for-dollar reductions (not deductions) in the amount of tax that you owe the government.
- Solar Renewable Energy Certificate (SREC): SRECs can be sold to your utility company (or other buyers) for money that normally counts as part of your taxable income. In most cases, there is a small threshold of energy production to meet before your solar system can earn SRECs or other performance-based incentives. SRECs and similar incentives are typically handled by your state government.
Federal Solar Incentives
Federal incentives are the type of incentives that you are most likely to have some knowledge of. The Federal Solar Investment Tax Credit, or ITC, is likely the most commonly known federal solar incentive. The ITC provides you with 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 a solar panel system installed on a primary or secondary residence in the United States that you own. Originally, you could claim 30% of the total cost, although certain projects may qualify for only 26%, depending on the details. There is no maximum amount you can claim.
To understand exactly how much the ITC could save you, talk to your local Rancho Santa Margarita solar panel installation expert.
In August 2022, the Inflation Reduction Act expanded and extended the ITC, now titled the Clean Energy Credit. The Clean Energy Credit lasts until 2035. Solar installation projects started after January 1, 2022, and completed by the end of 2032 may qualify for a 30% tax credit. This amount will then decrease slightly each year until the end of the current program. Beginning in 2023, it will also be easier to get credits for energy storage systems under this new program.
Click here to learn more about the new Inflation Reduction Act. The easiest way to fully understand how the new Clean Energy Credit will apply to you is to reach out to your local Rancho Santa Margarita solar panel installers with your questions.
State & Local Solar Incentives
Federal solar incentives are not your only option; rebates, tax credits and more are often offered at the state and local level. Certain incentives are ongoing, while others are only available for a limited time. They may be given by the California government, or by your county or municipality.
Next Steps for Installing Solar in Rancho Santa Margarita
Solar incentives may come from your local utility company, the California government or the federal government. The growing number of available solar incentives has facilitated the nationwide growth of solar energy use in the last 15 years. We recommend talking to your local Rancho Santa Margarita solar installation company for more information about these incentives and to be sure that you're getting all the money you can for your solar panels.
EcoWatch's Rancho Santa Margarita, CA Solar Incentives FAQs
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