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
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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
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 encourage people to make the switch to renewable energy by offering incentives that lower the financial burden of solar panel installation and use. Different types of incentives, such as 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. Types of solar incentives might include:
- Net Metering: Be sure to speak with your South Pasadena utility company about signing a net metering agreement. This allows you to receive credit towards your utility bill every month for the value of excess energy generated by your solar panels. You could receive either a dollar-for-dollar credit or a percentage of the value.
- Tax Credits: Tax credits are dollar-for-dollar reductions that lower the amount of income tax you owe the government. (This is different from a tax deduction.)
- Tax Exemptions: Your solar system could qualify for both sales tax and property tax exemptions. Sales tax exemptions are applied at the time of purchase. Property tax exemptions let you ignore the value that solar panels add when you are calculating property taxes on your house.
- Solar Renewable Energy Certificate (SREC): SRECs and similar performance-based incentives are typically handled by your state government. Once your solar panel system meets the threshold (typically 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.
- Rebates: Rebates, or cash back after a purchase, are typically given prior to any solar tax credits being calculated. These rebates may be given by your local utility company, by your county or by your state.
Federal Solar Incentives
Federal solar incentives are probably the first thing that comes to mind when you think about solar incentives. 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 predetermined percentage of your solar system's cost.
The ITC applies to solar panels installed on your primary or secondary residence in the United States. The solar system has to have been installed on a property you own after January 1, 2006 for you to be eligible for the credit. The ITC initially covered 30% of all installation costs (panels, equipment, labor and accessories), although the total amount has fluctuated slightly over time between 26-30%. The amount you qualify for will depend on when your solar system was installed. There is no cap on the amount you can claim.
To better understand exactly how much money the ITC could save you, contact your local South Pasadena solar panel installation expert.
The Inflation Reduction Act, passed in August 2022, expanded and extended the ITC (as well as retitling it the Clean Energy Credit). The new Clean Energy Credit is valid until 2035. You can now receive a 30% credit for solar systems installed between January 1, 2022 and December 31, 2032. The total credit will then be decreased by a few percentage points every year until the date of expiration. Starting in 2023, the program expansion will also make it easier to get credit for energy storage systems.
More information about the new Inflation Reduction Act can be found here. To understand how the new Clean Energy Credit might apply to you, get in touch with your local South Pasadena solar installation company.
State & Local Solar Incentives
Some solar incentives may be offered at the local or state level. Similar to federal incentives, these can include tax credits, rebates and more. Certain incentives are ongoing, while others are offered for only a limited time. Local solar incentives may come from your county or municipality, or from the California government.
Next Steps for Installing Solar in South Pasadena
The expanding number of available solar incentives has contributed greatly to the increase in the nationwide adoption of solar energy over the past 15 years. You can get solar incentives from the California government, the federal government or your local utility company. Getting in touch with your local South Pasadena solar panel installation expert is the right first step towards making sure you get all the incentives you qualify for when you switch to solar energy.
EcoWatch's South Pasadena, CA Solar Incentives FAQs
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