2023 Solar Incentives Guide for Vallejo, CA - Tax Credits & Rebates
In this guide, we'll cover the latest solar incentives and rebates available in Vallejo.
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 Vallejo?
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 range of financial incentives implemented to make installing and using solar panels more affordable. This is done to encourage people to switch to renewable energy. Solar incentives may include upfront discounts, cash back or credit towards your monthly utility bill. Some incentives are handled by the federal government, some by the California government and some by your utility company, county or municipality. 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 in taxes you owe the government.
- Tax Exemptions: Tax exemptions can come in two forms. First, there is sales tax exemption, applied when you purchase solar panels. The second is property tax exemption. This allows you to exclude the added value of your solar system when paying property tax on your house.
- Rebates: Rebates, or cash back after a purchase, are typically given prior to any solar tax credits being calculated. These rebates may be offered by your local utility company, by your county or by your state.
- Net Metering: Net metering factors in once your solar system is up and running. If you've signed a net metering agreement with your Vallejo utility company, the company 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 others you might get refunded a percentage of the value.
- Solar Renewable Energy Certificate (SREC): In general, solar systems that produce over a specific (usually small) amount of electricity will qualify for SRECs or similar performance-based incentives. SRECs and performance-based incentives in general are typically offered at the state level. You can sell SRECs to your utility company or another buyer, and the money you receive is normally considered part of your taxable income.
Federal Solar Incentives
When people think of solar incentives, federal incentives are likely the first thing that comes to mind. The Federal Solar Investment Tax Credit, or ITC, is the most commonly known federal solar incentive. The ITC provides you with a tax credit for a predetermined percentage of the cost of your solar system.
The ITC applies to the value of 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 claim the credit. Originally, the ITC covered 30% of all costs (panels, accessories, labor and equipment), although this amount has fluctuated slightly over the last few years between 26-30%. The amount you qualify for will depend on when your solar system was installed. There is no cap on the claim amount.
Curious how the ITC might apply to your specific situation? Contact your local Vallejo solar panel installer to get more information.
The ITC was renewed and increased in scope after the passage of the Inflation Reduction Act in August 2022. It's also now called the Clean Energy Credit. With the new provisions, solar installation projects that are completed between 2022 and 2032 may be eligible for a 30% tax credit. This credit amount 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 claiming credit for energy storage systems easier than ever before.
Click here to learn more about the new Inflation Reduction Act. To fully understand how the new Clean Energy Credit will apply to you, speak with your local Vallejo solar installation company.
State & Local Solar Incentives
Tax credits, rebates and more might be claimed at multiple levels. Along with federal solar incentives, there are often state and local ones as well. Certain incentives are offered for only a limited time, while others are ongoing. These local incentives might come from your county or municipality, or from the California government.
Next Steps for Installing Solar in Vallejo
Nationwide solar energy use has gone up tremendously in the past 15 years, in part thanks to the proliferation of solar incentives. You might receive these incentives from your local utility company, the California government or the federal government. Contact your local solar panel installation expert today to learn more and to save as much money as possible on solar panels for your Vallejo home.
EcoWatch's Vallejo, CA Solar Incentives FAQs
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