2023 Solar Incentives Guide for Santa Clarita, CA - Tax Credits & Rebates
In this guide, we'll cover the latest solar incentives and rebates available in Santa Clarita.
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 Clarita?
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 phrase "solar incentives" generally refers to financial incentives designed to encourage increased use of renewable energy by making the installation and use of solar panels more affordable. You may qualify for various kinds of incentives, such as discounts, cash back or monthly utility bill credits, depending on your situation. Some incentives come from your specific utility company, county or municipality, some from the state of California and others from the federal government. Some broad categories of solar incentives include:
- Tax Credits: These credits are dollar-for-dollar reductions (not deductions) in the amount of tax that you owe the federal government.
- Rebates: Solar companies may help you claim a rebate, or partial refund after purchase, for your solar system. States or counties will also sometimes offer limited-time rebates. If you receive a rebate, that amount will usually come off your total price before tax credits are calculated.
- Net Metering: Net metering is an incentive you can get after your solar system is up and running. If you have a net metering agreement with your Santa Clarita utility company, they will subtract the value of the excess energy your solar system produces from your monthly utility bill. In some locations, this is a dollar-for-dollar credit, while in other areas you might receive a refund equivalent to a percentage of the value.
- Solar Renewable Energy Certificate (SREC): SRECs and similar performance-based incentives are usually handled by your state government. Once your solar panel system meets a predetermined threshold (usually 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 make is usually considered part of your taxable income.
- Tax Exemptions: Tax exemptions can come in one of two forms. The first is sales tax exemption, applied at the time you purchase your solar panels. The second is property tax exemption, which allows you to exclude the added value of your solar system when paying property tax on your home.
Federal Solar Incentives
Federal solar incentives are likely the first thing that you think of 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 that reduces your taxes by a specified percentage of the money you spend on solar panels for your home.
The ITC applies to a solar system installed on your primary or secondary residence in the United States. The solar panels must have been installed after January 1, 2006 on a property you own for you to be eligible for the credit. The ITC initially covered 30% of all system installation costs (panels, accessories, labor and equipment), although the 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 claim amount.
To find out exactly how much the ITC could save you, contact your local Santa Clarita solar panel installation expert.
The Inflation Reduction Act, passed in August 2022, expanded and extended the ITC (as well as renaming it to the Clean Energy Credit). Homeowners are now eligible 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 decrease yearly until the Clean Energy Credit expires in 2035. Starting in 2023, the program 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 Santa Clarita solar panel installers are the best people to answer your questions about the new Clean Energy Credit and how it may apply to you.
State & Local Solar Incentives
Some solar incentives are often also provided at the state and local level. Like with federal incentives, these could include tax credits, rebates and more. These incentives might be handled by your county or municipality, or by the California government. Some incentives may be available for a limited time, while others are ongoing.
Next Steps for Installing Solar in Santa Clarita
Solar incentives might come from the federal government, the California government or your local utility company. The growing number of solar incentives available has facilitated the nationwide growth of solar energy use in the last 15 years. We recommend talking to your local Santa Clarita solar installer to learn more about these incentives and to be sure that you're getting the most money possible for your solar panels.
EcoWatch's Santa Clarita, CA Solar Incentives FAQs
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