2023 Solar Incentives Guide for Santa Barbara, CA - Tax Credits & Rebates
In this guide, we'll cover the latest solar incentives and rebates available in Santa Barbara.
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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What Solar Tax Credits, Incentives, and Rebates are Available in Santa Barbara?
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 intended to make renewable energy usage more affordable through financial incentives to help people install solar panels on their homes. Incentives may include things like discounts, cash back or monthly utility bill credits. Some incentives are handled federally, while others are provided by the California government or your utility company, county or municipality. Categories of solar incentives include:
- Net Metering: Net metering is an incentive you can get once your solar panels are up and running. If you have a net metering agreement with your Santa Barbara utility company, it will subtract the value of the excess energy produced by your solar system from your monthly utility bill. In some places, this credit is dollar-for-dollar, while in other areas you might receive a refund equivalent to a percentage of the value.
- Solar Renewable Energy Certificate (SREC): SRECs and other performance-based incentives may be available to you if your solar system produces more than a specified (generally small) amount of electricity. Performance-based incentives are normally handled at the state level. You can sell any SRECs you have to your utility company or other buyers, and the money you make is generally considered part of your taxable income.
- Rebates: A rebate is a partial refund credited to your account after you've paid for your solar panels. Rebates 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: These can come in the form of property tax exemptions, which would allow you to exclude the value added by your solar panels when paying property tax on your house. You may also qualify for an exemption on sales tax at the time of purchase.
- Tax Credits: Unlike tax deductions, tax credits are dollar-for-dollar reductions in the amount of income tax that you owe the federal government.
Federal Solar Incentives
Federal solar incentives are likely the first thing that comes to mind when thinking about solar incentives. You've likely heard of the Federal Solar Investment Tax Credit, or ITC. This is a tax credit equal to a specified percentage of the money you spend on your solar system.
The ITC applies towards solar systems installed after January 1, 2006 and allows you to deduct from your taxes a percentage of the total cost of solar panels, accessories, equipment and labor. You can claim this credit for solar panels installed on a primary or secondary residence in the United States that you own. The original claim amount was 30% of the total cost, although depending on when the project was completed, your credit may range from 26-30%. There is no maximum amount you can claim.
To know exactly how much money the ITC could save you, talk to your local Santa Barbara solar panel installer.
The Inflation Reduction Act, passed in August 2022, expanded and extended the ITC (as well as retitling it the Clean Energy Credit). Homeowners can now receive a credit of 30% of the total costs of solar system installation for projects started after January 1, 2022 and completed before the end of 2032. The percentage will then decrease on a yearly basis until the Clean Energy Credit ends in 2035. Beginning in 2023, it will also be easier to obtain credits for energy storage systems with the new act.
More information about the new Inflation Reduction Act can be found here. Your local Santa Barbara solar panel company is the best resource for answering your questions regarding the new Clean Energy Credit and how it will apply to you.
State & Local Solar Incentives
Some solar incentives are often also provided at the state and local level. As with federal incentives, these might include rebates, tax credits and more. Incentives may be handled by your county or municipality, or by the state of California. Certain incentives are available for only a limited time, while others are ongoing.
Next Steps for Installing Solar in Santa Barbara
There are a number of different solar incentives: those provided by the federal government, those provided by the California government and those provided by local utility companies, to name a few. The use of solar energy has increased enormously in the last 15 years, thanks to these incentives. Call your local solar panel installation expert today to learn more and to save the most money possible on solar panels for your Santa Barbara home.
EcoWatch's Santa Barbara, CA Solar Incentives FAQs
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