2023 Solar Incentives Guide for Topanga, CA - Tax Credits & Rebates
In this guide, we'll cover the latest solar incentives and rebates available in Topanga.
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 Topanga?
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 homeowners to make the switch to renewable energy by offering incentives that lower the financial burden of solar panel installation and use. Incentives can include things like discounts, cash back or credit on your utility bill each month. Some incentives are offered by the federal government, while others are provided by the state of California or by your utility company, county or municipality. Some solar incentives you might qualify for are:
- Net Metering: Net metering becomes relevant after your solar system is up and running. If you've signed a net metering agreement with your Topanga utility company, they will subtract the value of the excess energy your solar system produces from your monthly utility bill. In some areas, this credit is dollar-for-dollar, while in other areas you might receive a refund equivalent to a percentage of the value.
- Solar Renewable Energy Certificate (SREC): SRECs and similar performance-based incentives are generally handled by your state government. Once your solar system meets the threshold (usually a small amount of energy production), you can receive SRECs that can then be sold to your utility company or other buyers. The money you make is usually considered part of your taxable income.
- Rebates: Rebates, or partial refunds after a purchase, are typically applied before any solar tax credits are calculated. Solar rebates might be provided by your local utility company, by your county or by your state.
- Tax Exemptions: Sales tax exemptions are effective at the point of sale for your solar system. Property tax exemptions let you exclude the value that your solar panels add when you calculate how much property tax you need to pay on your house.
- Tax Credits: Tax credits lower, dollar-for-dollar, how much income tax you owe the federal government. These are different from tax deductions.
Federal Solar Incentives
Federal incentives are the kind of incentives that you are most likely to have some knowledge of. The solar incentive that you're most likely to have heard of is the Federal Solar Investment Tax Credit (ITC), which gives you a credit on your taxes equal to a certain percentage of your solar system's cost.
The ITC covers solar systems installed after January 1, 2006 and lets you deduct from your taxes a percentage of the total cost of solar panels, accessories, labor and equipment. This credit can apply towards solar panels installed on a primary or secondary residence in the United States that you own. The original claim amount was 30% of the total cost, although the amount you can claim may range between 26-30%. There is no maximum amount you can claim.
Wondering how the ITC applies to your specific situation? Get in touch with your local Topanga solar panel installer to get more information.
In August 2022, the Inflation Reduction Act made revisions to the ITC, now dubbed the Clean Energy Credit. Homeowners can now qualify for a credit of 30% of the total solar system installation costs for projects started after January 1, 2022 and completed before the end of 2032. The percentage will then begin to decrease annually until the Clean Energy Credit ends in 2035. Beginning in 2023, it will also be easier to obtain credits for energy storage systems with the new act.
More information about the new Inflation Reduction Act can be found here. The best way to fully understand how the new Clean Energy Credit might apply to you is to reach out to your local Topanga solar panel company with your questions.
State & Local Solar Incentives
Federal solar incentives are not your only option; rebates, tax credits and more might also be offered at the local or state level. Certain incentives are offered for only a limited time, while others are ongoing. Your local solar incentives might come from your county or municipality, or from the California government.
Next Steps for Installing Solar in Topanga
There are a number of different solar incentives: those provided by local utility companies, those provided by the California government and those provided by the federal government, to name a few. The use of solar energy has increased tremendously in the last 15 years, partially thanks to these incentives. When you're ready to switch over to solar energy, talking to your local Topanga solar panel installation expert is an excellent place to start.
EcoWatch's Topanga, CA Solar Incentives FAQs
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