2023 Solar Incentives Guide for West Covina, CA - Tax Credits & Rebates
In this guide, we'll cover the latest solar incentives and rebates available in West Covina.
You'll learn about:
- Local & State Solar Incentives
- Federal Tax Credits (Updated for 2023 and beyond)
- Ways to optimize your solar investment
Solar installers are experts in maximizing your solar tax credits and rebates.
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By EcoWatch Local Advisors
Data Analysis: James Savino
Ranking Methodology: Karsten Neumeister
Updated March 14, 2023
Why you can trust EcoWatch
What Solar Tax Credits, Incentives, and Rebates are Available in West Covina?
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 phrase "solar incentives" refers broadly to financial incentives put in place by solar companies and the government to encourage the use of renewable energy by making the installation and use of solar panels more affordable. Incentives might include things like discounts, cash back or credit on your utility bill each month. Some incentives are offered federally, while others are offered by the state of California or by your utility company, county or municipality. Some solar incentives you might qualify for are:
- Tax Credits: Tax credits lower, dollar-for-dollar, the amount of income tax you owe the government. These differ from tax deductions.
- Solar Renewable Energy Certificate (SREC): In most cases, solar systems that produce over a specific (generally small) amount of electricity can qualify for SRECs or other 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.
- Rebates: Solar companies may help you claim a rebate, or partial refund after purchase, for your solar panels. Counties or states will also sometimes offer limited-time rebates. Any rebates you receive will usually come off the total price before tax credits are calculated.
- Net Metering: You may be able to sign a net metering agreement with your West Covina utility company that will apply to all or a percentage of the excess electricity that is generated by your solar panels. They will then deduct this value from your monthly utility bill.
- Tax Exemptions: Tax exemptions can come in one of two forms. First, there is sales tax exemption, applied at the time you purchase your solar panels. The second is property tax exemption, which allows you to exclude the value added by your solar system when paying property tax on your home.
Federal Solar Incentives
Federal incentives are the type of incentives that you are most likely to have some familiarity with. A federal incentive many people are probably familiar with is the Federal Solar Investment Tax Credit (ITC). This is a tax credit for a specified percentage of your solar system's cost.
The ITC was originally for 30% of the cost of solar panel installation, and has fluctuated slightly over the last few years between 26-30%. The installation date of your solar system will determine what percentage you qualify for. The total installation cost includes the panels themselves as well as the cost of equipment, labor and accessories. There is no maximum amount you can claim. The ITC can be applied to solar panels installed after January 1, 2006 on your primary or secondary residence. The residence must be owned by you and in the United States.
Contacting your local West Covina solar panel installation expert is the best way to learn more about how the ITC may apply to your situation.
In August 2022, the Inflation Reduction Act expanded and extended the ITC, now referred to as the Clean Energy Credit. For solar systems installed between January 1, 2022 and December 31, 2032, homeowners can receive a credit for 30% of the total cost. The percentage will then decrease annually until the Clean Energy Credit ends in 2035. Starting in 2023, the program expansion will also make it easier to get credit for energy storage systems.
Click here to learn more about the new Inflation Reduction Act. Your local West Covina solar panel installers are the best people to answer your questions regarding the new Clean Energy Credit and how it may apply to you.
State & Local Solar Incentives
There are often state solar incentives available in addition to federal ones. Tax credits, rebates and more may be available at a more local level. Some incentives are ongoing, while others may only be available for a limited time. Incentives may be given by the California government, or by your county or municipality.
Next Steps for Installing Solar in West Covina
The nationwide use of solar energy has gone up tremendously in the last 15 years, in part due to the growth in the number of solar incentives. You might receive these incentives from your local utility company, the California government or the federal government. It is a good idea to talk to your local West Covina solar installer to learn more about these incentives and to be sure that you're getting all of the money you can for your solar panels.
Best Regional Coverage
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EcoWatch's West Covina, CA Solar Incentives FAQs
What if I want to add a solar system to a rental property, vacation home or commercial property? Can I still qualify for incentives?
While we recommend talking to your local solar installer and/or tax professional to fully understand what solar incentives apply to you, many can be claimed on a second home, as long as it is in the United States and owned by you. There may be additional incentives available specifically for commercial properties, depending on the specifics.
If my house already has solar panels, can I still claim incentives?
If your solar panels were installed after January 1, 2022, you may qualify for the recently increased 30% tax credit under the Inflation Reduction Act. If your system was installed between 2006 and 2021, you may qualify for a tax credit between 26% and 30%, depending on the year it was installed. Reaching out to the company that installed your system, or any local West Covina solar installer, can help you learn what incentives you qualify for.
How much will solar panels save me on my electric bill in West Covina annually?
Typically, West Covina homeowners who install solar panels save around $1,317.57 per year, or around $25,033.85 over 20 years after they make the switch.
What are some environmental benefits of adding solar panels to my home?
Solar energy is a renewable energy source — by switching where you get your energy, you help lessen the strain on our planet's resources. Solar panels can also lower the CO2 emissions from your home by 250 pounds a year, or roughly 5,000 pounds in 20 years.
I want to change out my appliances for ones that are more energy-efficient. Are there any credits I can get?
With the passage of the new Inflation Reduction Act, there are a number of new financial incentives for making eco-friendly improvements to your home. More details about these incentives, including information about incentives for purchasing new appliances, can be found here.
Our goal is to reach as many people as we can with sensible solutions like solar energy. Our team of full-time local researchers collects solar price and installation data for every city in America then compiles it to create these digestible city guides. If you want to read our solar expert's opinion on the top solar companies featured here, follow this link.
Solar incentive research was conducted by Melissa Smith and Karsten Neumeister. Local data analysis was conducted by James Savino. See something we missed or could do better? Email the editor.