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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Updated September 15, 2023
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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
Commercial/Multifamily Incentives:
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
Source: https://www.dsireusa.org/
Solar incentives are meant to help mitigate the cost of installing solar panels on your home. These financial incentives are in place to encourage more homeowners to convert their home partially or fully to renewable energy. Various types of incentives, such as discounts, cash back or monthly utility bill credits, may be available to you. Some incentives may be offered by the state of California, by your utility company or by county or municipality, while others are federal. Some broad categories of solar incentives include:
- Solar Renewable Energy Certificate (SREC): SRECs are credits that can be sold to your utility company (or other buyers) for money that typically becomes part of your taxable income. In most cases, there is a small threshold of energy production to meet before your solar system qualifies for SRECs or other performance-based incentives. These kinds of incentives are generally handled by your state government.
- Net Metering: Net metering becomes relevant once your solar panels are up and running. If you've signed a net metering agreement with your West Covina utility company, the company will subtract the value of the excess energy produced by your solar system from your utility bill each month. In some locations, this is a dollar-for-dollar credit, while in other areas you may receive a refund equivalent to a percentage of the value.
- Rebates: Solar companies may 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. If you receive a rebate, that amount will usually be deducted from your total price before any tax credits are calculated.
- Tax Credits: Tax credits reduce, dollar-for-dollar, how much income tax you owe the government. Tax credits differ from tax deductions.
- Tax Exemptions: Your solar panel system could qualify for both sales tax and property tax exemptions. Sales tax exemptions are applied at the time of purchase. Property tax exemptions let you ignore the value added by your solar panels when calculating property taxes on your home.
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Momentum Solar
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Federal Solar Incentives
When you think about solar incentives, you probably think of federal incentives first. An incentive that most people are likely familiar with is the Federal Solar Investment Tax Credit (ITC). The ITC is a tax credit for a predetermined percentage of the cost of your solar system.
The ITC can be applied to solar panels installed after January 1, 2006 on a primary or secondary residence that you own in the United States. The credit initially covered 30% of the total cost — for panels, accessories, labor and equipment — although that amount may range from 26-30%, depending on when your solar system was installed. There is no cap on the amount you can claim.
Your local West Covina solar panel installation expert can provide you with more information about the ITC and how it may apply to your situation.
The Inflation Reduction Act, passed in August 2022, made some changes to the ITC (as well as renaming it to the Clean Energy Credit). Homeowners can now receive a credit of 30% of the total costs of solar system installation for projects that began after January 1, 2022 and will be finished by the end of 2032. The credit percentage will then begin to decrease on a yearly basis until the Clean Energy Credit ends in 2035. The expansion to the program also makes credits for energy storage systems even easier to claim, starting in 2023.
More information about the new Inflation Reduction Act can be found here. Your local West Covina solar panel installation expert is the best person to answer your questions about the new Clean Energy Credit and how it will apply to you.
State & Local Solar Incentives
Rebates, tax credits and more might be provided at multiple levels. On top of federal solar incentives, there are often state and local ones, too. These solar incentives — which may be provided 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 West Covina
The nationwide use of solar energy has significantly increased in the past 15 years, in part due to the increase in availability of solar incentives. You can obtain these incentives from your local utility company, the California government or the federal government. Speaking with your local West Covina solar panel installer is a great first step towards making sure you get all the incentives you qualify for when you switch to solar energy.
EcoWatch's West Covina, CA Solar Incentives FAQs
What if I add solar panels to a rental property, vacation home or commercial property? Can I still qualify for incentives?
Many solar incentives apply to a property located within the United States that you own; most secondary residences will fall under this distinction. Other solar incentives may be available for commercial properties, depending on the specifics. We recommend reaching out to your local solar installer and/or tax professional to best understand what incentives will apply to your specific situation.
How do I learn if I qualify for specific solar incentives?
It's best to speak with your local West Covina solar installer for a better understanding of which incentives your project will qualify for. Typically, solar incentives apply to new solar systems installed on a property you own (in the U.S.) within a specified date range. Some incentives, such as those given by the state of California, might have additional requirements.
If I already have solar panels, can I still claim incentives?
If your solar panels were installed after January 1, 2022, you may qualify for the newly increased 30% tax credit under the Inflation Reduction Act. If your system was installed between 2006 and 2021, you might qualify for a tax credit between 26% and 30%, depending on the exact installation date. Speaking with the company that installed your system, or any local West Covina solar installer, can help you understand what incentives you might want to apply for.
Who installs solar panels near me?
To find the best solar panel installer in your area, check out our guide to the best solar companies in West Covina.
What are some environmental benefits of adding solar panels to my house?
Solar energy is renewable — by switching where you get your energy, you help reduce 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.
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.