2023 Solar Incentives Guide for Sebastopol, CA - Tax Credits & Rebates
In this guide, we'll cover the latest solar incentives and rebates available in Sebastopol.
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 Sebastopol?
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 can include things like discounts, cash back or monthly utility bill credits. Some incentives are offered federally, while others are provided by the California government or your utility company, county or municipality. Categories of solar incentives include:
- Rebates: Solar rebates can be provided by your county or state, or by your local utility company. These rebates are essentially cash back that is applied after you purchase a solar system and before tax credits are calculated.
- Tax Exemptions: These can come in the form of property tax exemptions, which would allow you to exclude the value of your solar system when paying taxes on your house. They may also include exemptions on sales tax at the time of purchase.
- Net Metering: Be sure to talk with your Sebastopol utility company about signing a net metering agreement. This allows you to receive credit towards your monthly utility bill for the value of excess energy your solar panels generate. You might receive either a dollar-for-dollar credit or a percentage of the value.
- Solar Renewable Energy Certificate (SREC): SRECs and other performance-based incentives are generally handled by your state government. Once your solar system meets a predetermined threshold (normally a small amount of energy production), you are eligible to receive SRECs that can then be sold to your utility company or other buyers. The money you receive is usually considered part of your taxable income.
- Tax Credits: Tax credits decrease, dollar-for-dollar, the amount of income tax you owe the government. Tax credits differ from tax deductions.
Federal Solar Incentives
When thinking about solar incentives, federal incentives are likely the first thing that comes to mind. An incentive many people are likely to be familiar with is the Federal Solar Investment Tax Credit (ITC). The ITC is a tax credit for a specific percentage of the cost of your solar system.
The ITC covers 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, equipment, labor and accessories. You can receive this credit for a solar panel system 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 certain projects may qualify for only 26%, depending on the details. There is no maximum claim amount.
To know exactly how much the ITC could save you, talk to your local Sebastopol solar panel installation expert.
In August 2022, the ITC (now referred to as the Clean Energy Credit) was expanded and extended by the passing of the Inflation Reduction Act. The new Clean Energy Credit extends until 2035. American homeowners can now receive a 30% credit for solar systems installed between January 1, 2022 and December 31, 2032. This credit will then be decreased by a few percentage points every year until its expiration. The expansion also makes credits for energy storage systems even easier to claim, starting in 2023.
Click here to learn more about the new Inflation Reduction Act. To fully understand how the new Clean Energy Credit will apply to you, speak with your local Sebastopol solar installation expert.
State & Local Solar Incentives
Some solar incentives may be provided at the state and local level. As with federal incentives, these might include tax credits, rebates and more. These incentives — which might be provided by the state of California, or by your county or municipality — may be offered on an ongoing basis, or for only a limited time.
Next Steps for Installing Solar in Sebastopol
Solar incentives might be offered by the California government, the federal government or your local utility company. The large number of incentives available has facilitated the nationwide growth of solar energy use in the last 15 years. We suggest talking to your local Sebastopol solar installer for more information about these incentives and to be sure that you're getting the most money possible for your solar system.
EcoWatch's Sebastopol, CA Solar Incentives FAQs
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