2023 Solar Incentives Guide for Santa Cruz, CA - Tax Credits & Rebates
In this guide, we'll cover the latest solar incentives and rebates available in Santa Cruz.
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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By EcoWatch Local Advisors
Data Analysis: James Savino
Ranking Methodology: Karsten Neumeister
Updated May 04, 2023
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What Solar Tax Credits, Incentives, and Rebates are Available in Santa Cruz?
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 encourage homeowners to switch to renewable energy by providing financial incentives that lower the burden of solar panel installation and use. Incentives might include things like discounts, cash back or credit on your utility bill each month. Some incentives are handled federally, while others are offered by the California government or by your utility company, county or municipality. Some broad categories of solar incentives include:
- Rebates: A solar rebate is a partial refund after the purchase of your solar panels. Rebates could be offered by your local utility company, your county or your state. The cash back that you get from the rebates is normally applied before calculating tax credits.
- Net Metering: Net metering factors in once your solar panels are up and running. If you've signed a net metering agreement with your Santa Cruz utility company, the company 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 be refunded a percentage of the value.
- Tax Exemptions: These may come in the form of property tax exemptions, which allow you to exclude the value added by your solar panels when paying taxes on your home. They may also include exemptions on sales tax at the time of purchase.
- Tax Credits: Tax credits reduce, dollar-for-dollar, how much income tax you owe the government. Tax credits are different from tax deductions.
- Solar Renewable Energy Certificate (SREC): In general, solar systems that produce over a specific (usually small) amount of electricity qualify for SRECs or other performance-based incentives. SRECs and similar incentives are typically offered by your state government. When you receive an SREC, you can sell it to your utility company or another buyer, and generally the money you make is normally considered part of your taxable income.
Federal Solar Incentives
When you hear the term "solar incentives," federal incentives may be the first thing that comes to mind. You've likely heard of the Federal Solar Investment Tax Credit, or ITC. The ITC is a tax credit equal to a certain percentage of the money you spend on solar panels for your home.
The ITC is applied to the total cost of solar panel installation, including the panels themselves as well as accessories, equipment and labor. You can claim this credit for panels installed after January 1, 2006 on a primary or secondary residence that you own and that is located in the United States. From its original value of 30% of the total cost, the credit has fluctuated slightly between 26-30%, and you may qualify for varying percentages depending on when your project was completed. There is no maximum amount you can claim.
To know exactly how much the ITC could save you, contact your local Santa Cruz solar panel installation expert.
In August 2022, the ITC (now referred to as the Clean Energy Credit) was bolstered by the passage of the Inflation Reduction Act. With the new provisions, solar installation projects that are completed between 2022 and 2032 might qualify for a 30% tax credit. This percentage will then see a slight annual decrease until the current Clean Energy Credit expires in 2035. The program expansion also makes it easier to get credit for energy storage systems, starting in 2023.
Click here to learn more about the new Inflation Reduction Act. Your local Santa Cruz solar panel installer can answer your questions and explain how the new Clean Energy Credit will apply to you.
State & Local Solar Incentives
Some solar incentives may be provided by state and local governments. As with federal incentives, these can include rebates, tax credits and more. Some incentives are ongoing, while others are available for a limited time. These incentives may be given by your county or municipality, or by the California government.
Next Steps for Installing Solar in Santa Cruz
The nationwide use of solar energy has gone up tremendously in the last 15 years, in part thanks to the proliferation of solar incentives. You might receive these incentives from the California government, the federal government or your local utility company. Your local Santa Cruz solar panel installation expert can help you learn more about which incentives you might qualify for, and get you feeling good about making the change to renewable energy today.
Best Regional Coverage
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Best Warranty Coverage
- Industry-leading warranty coverage
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EcoWatch's Santa Cruz, CA Solar Incentives FAQs
Can I get any financial incentives when I add solar panels to a rental property, vacation home or commercial property?
While we recommend getting in touch with your local solar installer and/or tax professional to fully understand what solar incentives apply to you, many apply to a second home, provided that it is in the United States and owned by you. There may be other incentives available for commercial properties specifically, depending on the details.
How much can I save on my electric bill annually if I add solar panels to my Santa Cruz home?
Once you add solar panels to your home in Santa Cruz, you can anticipate savings of about $1,713.87 per year, or about $32,563.49 over 20 years.
What are some environmental benefits of installing solar panels on my house?
You can decrease your carbon footprint by 250 pounds of CO2 a year by installing solar panels. This adds up to around 5,000 pounds over 20 years. Solar is also a renewable energy source, meaning that switching your home over reduces the drain on our planet's resources.
I want to change out my appliances for ones that are more energy-efficient. Are there any incentives I can get?
The recently passed Inflation Reduction Act provides multiple incentives designed to reward homeowners for making eco-friendly upgrades. Some of these incentives include rebates and tax credits for installing new electric appliances. You can find more details about these incentives here.
Can I apply for incentives both towards the up-front cost of solar panels, and later as reimbursement?
Yes, you can receive both tax credits and rebates towards the cost of your solar panels. Depending on precisely which incentives you are claiming, they may apply in a different order. Make sure that you speak with your solar installer or a local tax professional to confirm that you are claiming the correct incentives and getting the most money possible.
Our goal is to reach as many people as we can with sensible solutions like solar energy. Our team of full-time local researchers collects solar price and installation data for every city in America then compiles it to create these digestible city guides. If you want to read our solar expert's opinion on the top solar companies featured here, follow this link.
Solar incentive research was conducted by Melissa Smith and Karsten Neumeister. Local data analysis was conducted by James Savino. See something we missed or could do better? Email the editor.