2023 Solar Incentives Guide for South Pasadena, CA - Tax Credits & Rebates
In this guide, we'll cover the latest solar incentives and rebates available in South Pasadena.
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 March 14, 2023
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What Solar Tax Credits, Incentives, and Rebates are Available in South Pasadena?
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 designed to mitigate the cost of installing solar panels on your home. These financial incentives are designed to encourage more Americans to convert their home partially or fully to renewable energy. Different types of incentives, like discounts, cash back or monthly utility bill credits, might be available to you. Certain incentives may be handled by the California government, by your utility company or by county or municipality, while other incentives are federal. You might qualify for any of the following types of solar incentives:
- Tax Credits: Tax credits are dollar-for-dollar reductions (not deductions) in how much income tax you owe the federal government.
- Rebates: Rebates, or cash back after a purchase, are typically given prior to any solar tax credits being calculated. These rebates might be offered by your local utility company, by your state or by your county.
- Tax Exemptions: These may come in the form of property tax exemptions, which allow you to exclude the value added by your solar panels when paying taxes on your home. You could also look for exemptions on sales tax at the time of purchase.
- Net Metering: Make sure you talk to your South Pasadena utility company about signing a net metering agreement. This will allow you to get a credit towards your monthly utility bill for the value of excess energy generated by your solar panels. You may receive either a dollar-for-dollar credit or a percentage of the value.
- Solar Renewable Energy Certificate (SREC): SRECs and similar performance-based incentives might be available to you if you have a solar system that produces more than a specified (usually small) amount of electricity. This category of incentives is normally handled at the state level. You can sell any SRECs you have to your utility company or other buyers, and the money you make is typically considered part of your taxable income.
Federal Solar Incentives
Federal incentives are the kind of incentives that you are most likely to have some knowledge of. You've likely heard of the Federal Solar Investment Tax Credit, or ITC. This incentive is a tax credit equal to a predetermined percentage of the money you spend installing solar panels.
The ITC applies to solar panels installed after January 1, 2006 on a primary or secondary residence that you own in the United States. The credit initially covered 30% of the total cost — for panels, equipment, accessories and labor — although the percentage may range from 26-30%, depending on when your solar project was undertaken. There is no cap on the amount you can claim.
To best understand how the ITC might apply to your situation, reach out to your local South Pasadena solar panel installation expert and request more information.
The Inflation Reduction Act, passed in August 2022, expanded and extended the ITC (as well as retitling it the Clean Energy Credit). The Clean Energy Credit has increased the current credit up to 30% for solar systems installed between 2022 and 2032. After this, the credit percentage will be reduced slightly each year until the end of the program in 2035. 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 South Pasadena solar panel installation experts can answer your questions and explain how the new Clean Energy Credit will apply to you.
State & Local Solar Incentives
Some solar incentives may be provided at the state and local level. Like with federal incentives, these can include tax credits, rebates and more. These incentives may be offered by your county or municipality, or by the California government. Certain incentives are available for a limited time, while others are ongoing.
Next Steps for Installing Solar in South Pasadena
You can receive solar incentives from the federal government and the California government, as well as from your local utility company. The growing availability of solar initiatives over the last 15 years has helped increase solar adoption nationwide. We suggest talking to your local South Pasadena solar installation company to learn more about these incentives and to be sure that you're getting the most money possible for your solar panels.
Best Regional Coverage
Momentum Solar
- Great warranty coverage
- Representatives are experts on local policies
- Concierge service ensures steady communication
- Slightly limited service offerings
Best Technology
Tesla Energy
- Price-match guarantee
- Sleek, efficient, and durable solar panels
- Best solar battery on the market
- Some reported issues with customer service
- Customer service varies by local dealer
EcoWatch's South Pasadena, CA Solar Incentives FAQs
What if I add solar panels to a vacation home, rental property or commercial property? Will I still qualify for incentives?
While we recommend talking to your local solar installer and/or tax professional to better understand what solar incentives apply to you, many incentives can be claimed on a second home, as long as it is in the United States and owned by you. There may be other incentives available specifically for commercial properties, depending on the details.
How can I find out if I qualify for certain solar incentives?
It's best to speak with your local South Pasadena solar installer for a better understanding of which incentives your project may qualify for. Usually, solar incentives apply to new solar panel systems installed on a property you own (in the U.S.) within a specified date range. Some incentives, such as those provided at the level of the California government, might have additional requirements.
If I installed solar panels on my house a few years ago, can I still claim incentives?
You should plan to talk to the company that installed your system — or reach out to a local South Pasadena solar installer — to better understand which incentives you might qualify for. If your system was installed after January 1, 2022, you likely qualify for the newly increased 30% tax credit under the Inflation Reduction Act. Solar systems installed between 2006 and 2021 may qualify for a tax credit of 26-30%.
How much can I save on my electric bill annually if I add solar panels to my house in South Pasadena?
Once you add solar panels to your South Pasadena home, you can expect to save around $1,554.54 per year, or around $29,536.18 over the next 20 years.
What are the environmental benefits of switching to solar?
Solar energy is a renewable energy source — by switching where you get your energy, you help reduce the strain on our planet's resources. You can also lower the CO2 emissions from your home by 250 pounds annually, or roughly 5,000 pounds in 20 years.
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.