2023 Solar Incentives Guide for Simi Valley, CA - Tax Credits & Rebates
In this guide, we'll cover the latest solar incentives and rebates available in Simi Valley.
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 Simi Valley?
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/
The phrase "solar incentives" refers broadly to financial incentives put in place by solar companies and the government to encourage the use of renewable energy by making solar panels more affordable. The incentives can include cash back, upfront discounts or credit towards your monthly utility bill. Some incentives are handled by the federal government, some by the California government and some by your specific utility company, county or municipality. Some solar incentives you might qualify for are:
- Solar Renewable Energy Certificate (SREC): SRECs and other performance-based incentives are usually handled at the state level. Once your solar system meets a certain threshold (normally a small amount of energy production), you are eligible to receive SRECs that you can then sell to your utility company or other buyers. The money you receive is usually considered part of your taxable income.
- Tax Credits: These credits are dollar-for-dollar reductions (not deductions) in the amount of tax that you owe the federal government.
- 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 ignore the added value of your solar system when calculating property tax for your home.
- Rebates: Some solar companies will help you claim a rebate, or partial refund of your purchase, for your solar panels. States or counties will also offer limited-time rebates at various times. The value of a rebate will usually be deducted from your total price before tax credits are calculated.
- Net Metering: Net metering becomes relevant once your solar panels are up and running. If you have a net metering agreement with your Simi Valley utility company, it will subtract the value of the excess energy your solar system produces from your monthly utility bill. In some areas, this is a dollar-for-dollar credit, while in other places you may receive a refund equivalent to a percentage of the value.
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Federal Solar Incentives
Federal solar incentives are likely the first thing that comes to mind when thinking about solar incentives. The Federal Solar Investment Tax Credit, or ITC, is the most commonly known federal solar incentive. The ITC offers a tax credit for a set percentage of the cost of your solar system.
The ITC can be applied to solar panels installed on your primary or secondary residence in the United States. The solar panels must have been installed on a property you own after January 1, 2006 for you to be eligible for the credit. The ITC originally paid out 30% of all system costs (panels, accessories, labor and equipment), although the amount has fluctuated over time between 26-30%. The installation date of your solar system will determine what percentage you are eligible for. There is no cap on the claim amount.
Talking to your local Simi Valley solar panel installation expert is the best way to learn more about how the ITC may apply to you.
In August 2022, the Inflation Reduction Act laid out new provisions for the ITC, now called the Clean Energy Credit. For solar systems installed between January 1, 2022 and December 31, 2032, homeowners can apply for 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, it will also be easier to claim credits for energy storage systems with the new act.
More information about the new Inflation Reduction Act can be found here. Your local Simi Valley solar panel company is the best resource for answering your questions regarding the new Clean Energy Credit and how it applies to you.
State & Local Solar Incentives
There are often state solar incentives available in addition to federal ones. Tax credits, rebates and more may be available at a more local level. Some incentives are offered for only a limited time, while others are ongoing. Your local solar incentives could come from your county or municipality, or from the California government.
Next Steps for Installing Solar in Simi Valley
The large number of solar incentives available has enormously increased the adoption of solar energy nationwide over the past 15 years. You may receive solar incentives from your local utility company, the federal government or the California government. Your local Simi Valley solar panel installation company can give you more information about which incentives you can apply for, and get you on track to switch to renewable energy today.
EcoWatch's Simi Valley, CA Solar Incentives FAQs
Can I receive any incentives when I add solar panels to a rental property, vacation home or commercial property?
Many solar incentives apply to a property you own that is located within the United States; most secondary residences fall into this category. Other solar incentives may be available for commercial properties, depending on the specifics. We recommend getting in touch with your local solar installer and/or tax professional to better understand what incentives will apply to your specific situation.
How much will solar panels save me annually on my electric bill in Simi Valley?
Typically, Simi Valley homeowners who install solar panels save approximately $1,310.51 per year, or approximately $24,899.75 over 20 years after making the switch.
Who installs solar panels near me?
To discover the best solar panel installation companies near you, take a look at our article on the best solar companies in Simi Valley.
How long until the federal solar tax credit ends?
The Clean Energy Credit (formerly called the federal solar tax credit, or the ITC), is scheduled to end on January 1, 2035. Currently set at 30%, the credit will drop to 26% in 2033 and to 22% in 2034.
Can I receive incentives both towards the up-front cost of solar panels, and later as reimbursement?
Yes, you can claim both tax credits and rebates towards the cost of solar panels. Depending on which incentives you are applying for, they may apply in a different order. Make sure that you talk to your solar installer or a local tax professional to ensure that you are claiming incentives correctly 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.