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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Updated September 15, 2023
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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
Commercial/Multifamily Incentives:
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
Source: https://www.dsireusa.org/
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.
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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
What if I want to add a solar system to a rental property, vacation home or commercial property? Will I still qualify for incentives?
While we recommend talking to your local solar installer and/or tax professional to best understand what solar incentives apply to you, many will apply to a second home, so long as that home is in the United States and owned by you. There may be other incentives available for commercial properties specifically, depending on the specifics.
My home already has solar panels installed. Are there any incentives that I qualify for?
If your solar system was installed after January 1, 2022, you may qualify for the newly increased 30% tax credit under the Inflation Reduction Act. If you installed your system between 2006 and 2021, you might qualify for a tax credit between 26% and 30%, depending on the date of installation. Speaking with the company that installed your system, or any local Sebastopol solar installer, can help you learn more about what incentives you qualify for.
What are some environmental benefits of adding solar panels to my house?
Solar energy is renewable — by switching where you get your energy, you help lessen the strain on our planet's resources. Solar panels can also reduce your home's CO2 emissions by 250 pounds yearly, or roughly 5,000 pounds over 20 years.
If I trade in my appliances for ones that use solar energy, are there any incentives that I can claim?
With the passage of the new Inflation Reduction Act, there are several new financial incentives for making eco-friendly improvements to your home. More details on these incentives, including information about incentives for purchasing new appliances, can be found here.
Can I use a combination of solar and another type of renewable energy to power my home?
You can power your home with multiple types of renewable energy, or a combination of renewable and non-renewable energy. Make sure you talk through your plan with your local Sebastopol solar installer. They can help you as you plan for your project and give you an understanding of various incentives that you will or won't qualify for.
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.