2023 Solar Incentives Guide for Santa Monica, CA - Tax Credits & Rebates
In this guide, we'll cover the latest solar incentives and rebates available in Santa Monica.
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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Updated September 15, 2023
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What Solar Tax Credits, Incentives, and Rebates are Available in Santa Monica?
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
Renewable Market Adjusting Tariff (ReMAT)
LADWP - Feed-in Tariff (FiT) Program
Base price will step down over time as certain MW goals are met
Federal Residential Renewable Energy Tax Credit
Source: https://www.dsireusa.org/
Solar incentives help mitigate the cost of installing solar panels on your home. Financial incentives like these are intended to encourage more people to switch to renewable energy. Incentives may include things like discounts, cash back or monthly utility bill credits. Some incentives are offered federally, while others are handled by the state of California or by your specific utility company, county or municipality. You might qualify for any of the following types of solar incentives:
- Rebates: Solar rebates can be offered by your state or county, or by your local utility company. These rebates are essentially partial refunds that are applied after you purchase a solar system and before tax credits are calculated.
- Solar Renewable Energy Certificate (SREC): SRECs and similar performance-based incentives are typically handled by your state government. Once your solar system meets the qualification threshold (normally a small amount of energy production), you are eligible to receive SRECs that can be sold to your utility company or other buyers. The money you receive is usually considered part of your taxable income.
- Tax Exemptions: Tax exemptions can come in one of two forms. First, there is sales tax exemption, applied at the time you purchase your solar panels. The second is property tax exemption. This allows you to exclude the value added by your solar system when paying property tax on your house.
- Tax Credits: Tax credits are dollar-for-dollar reductions (not deductions) in how much in taxes you owe the federal government.
- Net Metering: Be sure to talk to your Santa Monica utility company about signing a net metering contract. This allows you to get a credit towards your monthly utility bill for the value of excess energy generated by your solar panels. You might receive either a dollar-for-dollar credit or a percentage of the value.
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Federal Solar Incentives
Federal solar incentives are likely to be the first thing that comes to mind when you think about solar incentives. An incentive many people are likely to be familiar with is the Federal Solar Investment Tax Credit (ITC). This is a tax credit for a certain percentage of the cost of your solar system.
The ITC applies towards solar systems installed after January 1, 2006 and under this program you can deduct from your taxes a percentage of the total cost of solar panels, labor, accessories and equipment. You can claim this credit for solar panels installed on a primary or secondary residence that you own in the United States. The original amount you could claim 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 claim amount.
Wondering how the ITC applies to your specific situation? Contact your local Santa Monica 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. The Clean Energy Credit runs until 2035. Any solar installation project that is completed between January 1, 2022 and December 31, 2032 may qualify for a 30% tax credit. This amount will decrease slightly each year until the end of the current program. Starting in 2023, the program expansion will also make claiming credit for energy storage systems easier than ever before.
Click here to learn more about the new Inflation Reduction Act. Your local Santa Monica solar panel installation experts can answer your questions and explain how the new Clean Energy Credit applies to you.
State & Local Solar Incentives
Some solar incentives are often also provided at the state and local level. Like with federal incentives, these can include tax credits, rebates and more. Incentives may be provided by the state of California, or by your county or municipality. Certain incentives are available for only a limited time, while others are ongoing.
Next Steps for Installing Solar in Santa Monica
Solar incentives may come from the federal government, the California government or your local utility company. The growing number of incentives available has facilitated the nationwide growth of solar energy use in the last 15 years. Your local Santa Monica solar panel installation company can provide you with more details about which incentives you can apply for, and get you feeling good about making the change to renewable energy today.
EcoWatch's Santa Monica, CA Solar Incentives FAQs
How do I learn if I qualify for certain solar incentives?
It's a good idea to talk to your local Santa Monica solar installer for a better understanding of which incentives your project will qualify for. Typically, solar incentives apply to new solar panel systems installed on a property you own (in the U.S.) between the dates specified by the incentive. Some incentives, like those offered by the government of California, might have other requirements.
How much can I save annually on my electric bill if I add solar panels to my house in Santa Monica?
Once you add solar panels to your house in Santa Monica, you can anticipate savings of about $1,710.64 per year, or about $32,502.14 over the next 20 years.
What are the highest-rated solar panel installation companies near me?
To find the right solar panel installer for you, check out our guide to Santa Monica's top solar panel companies.
When does the federal solar tax credit end?
The federal solar tax credit, previously called the ITC and now titled the Clean Energy Credit, is set to end on January 1, 2035. The current 30% credit will end in 2032, replaced by a 26% credit in 2033 and a 22% credit in 2034.
I want to change out my appliances for ones that are more energy-efficient. Are there any credits I can apply for?
Under the new Inflation Reduction Act, there are a variety of new financial incentives that are available when you make eco-friendly improvements to your home. More details on these incentives, including information about incentives for purchasing new appliances, can be found here.
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.