2023 Solar Incentives Guide for Vacaville, CA - Tax Credits & Rebates
In this guide, we'll cover the latest solar incentives and rebates available in Vacaville.
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 Vacaville?
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
The term "solar incentives" covers a wide range of financial incentives put in place to make installing and using solar panels more affordable. This is done to encourage people to switch to renewable energy. You might be eligible for different kinds of incentives, including cash back, discounts or monthly utility bill credits, depending on your situation. Some incentives come from your specific utility company, county or municipality, some from the state of California and others from the federal government. Categories of solar incentives include:
- Solar Renewable Energy Certificate (SREC): SRECs and other performance-based incentives may be available to you if your solar system produces more than a specified (usually small) amount of electricity. Performance-based incentives are usually handled by the state government. You can sell the SRECs you receive to your utility company or other buyers, and the money you receive in return is generally considered part of your taxable income.
- 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 calculating the taxes you pay on your house. You may also qualify for an exemption on sales tax at the time of purchase.
- Net Metering: Net metering factors in once your solar panels are up and running. If you have in place a net metering agreement with your Vacaville utility company, it will subtract the value of the excess energy your solar system produces from your utility bill each month. In some areas, this credit is dollar-for-dollar, while in other places you may get refunded a percentage of the value.
- Rebates: Some solar companies will help you claim a rebate, or partial refund after purchase, for your solar system. States or counties will also offer limited-time rebates at various times. Any rebates you receive will usually be deducted from the total price before tax credits are calculated.
- Tax Credits: Unlike tax deductions, tax credits reduce, dollar-for-dollar, the amount of income tax that you owe the federal government.
Federal Solar Incentives
Federal solar incentives are likely to be the first thing that you think of when thinking about solar incentives. The Federal Solar Investment Tax Credit, or ITC, is likely the best-known federal solar incentive. The ITC allows you to claim a tax credit for a predetermined percentage of the cost of your solar system.
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. You can claim this credit for a solar panel system installed on a primary or secondary residence that you own in the United States. The original claim amount was 30% of the total cost, although certain projects may qualify for only 26%, depending on the details. There is no maximum claim amount.
Your local Vacaville solar panel installer can offer more information about the ITC and how it may apply to your situation.
In August 2022, the Inflation Reduction Act laid out new provisions for the ITC, now titled the Clean Energy Credit. For solar system installations that begin after January 1, 2022 and are completed by the end of 2032, homeowners can apply for a credit equal to 30% of the total cost. The percentage will then decrease annually until the Clean Energy Credit expires in 2035. Beginning in 2023, it will also be easier to obtain credits for energy storage systems under this new program.
More information about the new Inflation Reduction Act can be found here. Your local Vacaville solar panel installation experts can answer any questions you have and explain how the new Clean Energy Credit may apply to you.
State & Local Solar Incentives
Tax credits, rebates and more can be claimed at multiple levels. Along with federal solar incentives, there are often state and local ones, too. Incentives may be handled by the state of California, or by your county or municipality. Some incentives are available for only a limited time, while others are ongoing.
Next Steps for Installing Solar in Vacaville
The variety of solar incentives available has enormously increased the adoption of solar energy nationwide over the last 15 years. You may receive solar incentives from the federal government, the California government or from your local utility company. Contact your local solar panel installer today to discover more about the various programs and to save the most money possible on a solar system for your Vacaville home.
EcoWatch's Vacaville, CA Solar Incentives FAQs
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