2024 Solar Incentives Guide for Redding, CA - Tax Credits & Rebates

What Solar Tax Credits, Incentives, and Rebates are Available in Redding?

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Solar incentives are meant to encourage people to switch to renewable energy by offering financial incentives that lower the burden of solar panel installation and use. Incentives could include things like discounts, cash back or credit towards your monthly utility bill. Some incentives are offered by the federal government, while others are handled by the state of California or your specific utility company, county or municipality. Types of solar incentives might include:

• Rebates: A rebate is a partial refund credited to your account after you've paid for your solar panels. These may 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: Tax exemptions can come in two forms. First, there is sales tax exemption, which is applied when you purchase solar panels. The second is property tax exemption, which allows you to ignore the added value of your solar system when calculating property tax for your home.
• Tax Credits: Unlike tax deductions, tax credits reduce, dollar-for-dollar, the amount of income tax that you owe the government.
• Net Metering: Net metering becomes relevant once your solar system is up and running. If you've signed a net metering agreement with your Redding utility company, they will subtract the value of the excess energy your solar system produces from your monthly utility bill. In some places, this credit is dollar-for-dollar, while in others you may receive a refund equivalent to a percentage of the value.
• Solar Renewable Energy Certificate (SREC): SRECs and other performance-based incentives are generally handled by your state government. Once your solar system meets a certain threshold (normally a small amount of energy production), you are eligible to receive SRECs that you can then sell to your utility company or other buyers. The money you receive from the sale is generally considered part of your taxable income.

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Federal Solar Incentives

Federal incentives are the kind of incentives that you are most likely to have some familiarity with. It's likely that you've heard of the Federal Solar Investment Tax Credit, or ITC. This incentive is a tax credit equal to a specified percentage of the money you spend on solar panels for your home.

The ITC applies to the value of a solar system installed on your primary or secondary residence in the United States. The solar system has to have been installed after January 1, 2006, on a property you own for you to claim the credit. Originally, the ITC covered 30% of all installation costs (panels, equipment, labor and accessories), although the covered amount has fluctuated slightly over time between 26-30%. The amount you qualify for will depend on when your solar system was installed. There is no cap on the amount you can claim.

Wondering how the ITC applies to your specific situation? Contact your local Redding solar panel installer to get more information.

In August 2022, the Inflation Reduction Act laid out new provisions for the ITC, now titled the Clean Energy Credit. Homeowners can now qualify for a credit equal to 30% of the total costs of solar system installation for projects that began after January 1, 2022, and will be finished by the end of 2032. The credit percentage will then begin to decrease on a yearly basis until the Clean Energy Credit expires in 2035. The expansion also makes credits for energy storage systems even easier to claim, starting in 2023.

More information about the new Inflation Reduction Act can be found here. The best way to fully understand how the new Clean Energy Credit might apply to you is to get in touch with your local Redding solar panel installers.

State & Local Solar Incentives

Rebates, tax credits and more might be provided at multiple levels. Along with federal solar incentives, there are often state and local ones, too. These incentives — which might be provided by the state of California, or by your county or municipality — might be offered for only a limited time, or on an ongoing basis.

Next Steps for Installing Solar in Redding

There are a variety of solar incentives: those offered by local utility companies, those offered by the federal government and those given by the California government, to name a few. The use of solar energy has increased enormously in the last 15 years, partially thanks to these incentives. It is a good idea to talk to your local Redding solar installation expert for more information about these incentives and to ensure that you're getting the most money possible for your solar system.