2023 Solar Incentives Guide for Saratoga, CA - Tax Credits & Rebates
In this guide, we'll cover the latest solar incentives and rebates available in Saratoga.
You'll learn about:
- Local & State Solar Incentives
- Federal Tax Credits (Updated for 2023 and beyond)
- Ways to optimize your solar investment
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What Solar Tax Credits, Incentives, and Rebates are Available in Saratoga?
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
City of Palo Alto Utilities - Solar Water Heating Program
Single-family residential electricity or propane-displacing systems: $0.54 per kWh displaced
Multifamily and Commercial gas-displacing systems: $14.53 per therm displaced
Multifamily and Commercial electricity or propane-displacing systems: $0.42 per kWh displaced
Low-Income Multifamily gas-displacing systems: $19.23/therm displaced
Low-Income Multifamily Electric or Propane Displacing systems: $0.56/kWh displaced
Federal Residential Renewable Energy Tax Credit
Solar incentives are meant to help mitigate the cost of installing a solar panel system on your home. These financial incentives are intended to encourage more Americans to convert their home partially or fully to renewable energy. Incentives may include things like discounts, cash back or credit towards your monthly utility bill. Some incentives are offered federally, while others are offered 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: Rebates, or cash back after a purchase, are usually given before any solar tax credits are calculated. Rebates can be offered by your local utility company, by your state or by your county.
- Tax Exemptions: Tax exemptions can come in two forms. First, there is sales tax exemption, applied when you purchase solar panels. The second is property tax exemption. This allows you to exclude the value added by your solar system when calculating property tax for your home.
- Net Metering: Net metering becomes relevant once your solar panels are up and running. If you have in place a net metering agreement with your Saratoga 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 is a dollar-for-dollar credit, while in others you might make back a percentage of the value.
- Tax Credits: Tax credits are dollar-for-dollar reductions (not deductions) in the amount of tax that you owe the government.
- Solar Renewable Energy Certificate (SREC): Typically, solar systems that produce more than a specified (usually small) amount of electricity qualify for SRECs or similar performance-based incentives. SRECs and performance-based incentives in general are typically offered at the state level. 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 people think of solar incentives, federal incentives may be the first thing that comes to mind. The solar incentive that you may be most familiar with is the Federal Solar Investment Tax Credit (ITC), which gives you a credit on your taxes equal to a predetermined percentage of the cost of your solar system.
The ITC can be applied to the total cost of installing solar panels, including the panels themselves as well as accessories, labor and equipment. This credit can be claimed for panels installed after January 1, 2006 on a primary or secondary residence located in the United States that you own. The tax credit ranges from 26-30% of total costs depending on when your project was completed. There is no maximum claim amount.
Curious how the ITC might apply to your specific situation? Get in touch with your local Saratoga solar panel installer to get more information.
In August 2022, the ITC (now called the Clean Energy Credit) was expanded and extended by the passage of the Inflation Reduction Act. For solar system installations that begin after January 1, 2022 and are completed by the end of 2032, homeowners can receive a credit equal to 30% of the total cost. After 2033, the percentage will decrease annually until the Clean Energy Credit expires in 2035. Starting in 2023, the expansion will also make claiming credit for energy storage systems easier than ever before.
More information about the new Inflation Reduction Act can be found here. Your local Saratoga solar panel installer can answer any questions you have and explain how the new Clean Energy Credit may apply to you.
State & Local Solar Incentives
There are often also state solar incentives in addition to those provided by the federal government. Rebates, tax credits and more can be offered at a more local level. Some incentives are ongoing, while others are offered for only a limited time. These local incentives could come from your county or municipality, or from the California government.
Next Steps for Installing Solar in Saratoga
You can apply for solar incentives from the California government and the federal government, as well as from your local utility company. This increase in availability of solar initiatives over the last 15 years has helped increase nationwide solar energy use enormously. Reach out to your local solar panel installation company today to discover more about the various programs and to save the most money possible on solar panels for your Saratoga home.
EcoWatch's Saratoga, CA Solar Incentives FAQs
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