2023 Solar Incentives Guide for Tustin, CA - Tax Credits & Rebates
In this guide, we'll cover the latest solar incentives and rebates available in Tustin.
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 Tustin?
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 designed to mitigate the cost of installing a solar panel system on your home. Financial incentives like these are designed to encourage more homeowners to switch to renewable energy. Solar incentives might 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:
- Net Metering: You may be able to sign a net metering agreement with your Tustin utility company, that may apply to all or a percentage of the excess electricity your solar panels generate. They will then deduct this value from your monthly utility bill.
- Solar Renewable Energy Certificate (SREC): SRECs and other performance-based incentives may be available to you if the solar system on your home produces over a specified (generally small) amount of electricity. These types of incentives are generally handled at the state level. You can sell the SRECs you receive to your utility company or other buyers, and the money you receive in return is usually considered part of your taxable income.
- Rebates: Some solar companies will help you claim a rebate, or partial refund after purchase, for your solar panels. Counties or states will also sometimes offer limited-time rebates. The value of a rebate will usually be deducted from your total price before any tax credits are calculated.
- Tax Credits: Tax credits lower, dollar-for-dollar, the amount of income tax you owe the federal government. Tax credits differ from tax deductions.
- Tax Exemptions: Tax exemptions may come in one of two forms. First, there is sales tax exemption, which is applied at the time you purchase your solar panels. The second is property tax exemption. This allows you to ignore the value added by your solar system when paying property tax on your home.
Federal Solar Incentives
When you think about solar incentives, you probably think of federal incentives first. The solar incentive that you may be most familiar with is the Federal Solar Investment Tax Credit (ITC), which provides a credit on your taxes equal to a percentage of your solar system's cost.
The ITC can be applied to solar systems installed after January 1, 2006 and lets you deduct from your taxes a percentage of the total cost of solar panels, labor, equipment and accessories. This credit can be claimed on a solar panel system 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.
Talking to your local Tustin solar panel installer is the best way to understand how the ITC may apply to your situation.
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. With the new provisions, solar installation projects begun after January 1, 2022 and finished by December 31, 2032 can qualify for a 30% tax credit. The amount of the credit will then see a slight annual decrease until the current Clean Energy Credit expires in 2035. 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. Your local Tustin solar panel company can answer your questions and explain how the new Clean Energy Credit may apply to you.
State & Local Solar Incentives
There are more than just federal solar incentives; tax credits, rebates and more might also be offered at the local or state level. These solar incentives — which might be handled by your county or municipality, or by the state of California — might be offered on an ongoing basis, or for only a limited time.
Next Steps for Installing Solar in Tustin
The expanding number of available solar incentives has contributed greatly to the increase in the use of solar power nationwide over the past 15 years. You can get solar incentives from your local utility company, the California government or the federal government. Getting in touch with your local Tustin solar panel installer is the best first step towards getting all the incentives you qualify for when you switch to solar energy.
EcoWatch's Tustin, CA Solar Incentives FAQs
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