2023 Solar Incentives Guide for Redlands, CO - Tax Credits & Rebates

What Solar Tax Credits, Incentives, and Rebates are Available in Redlands?

Source: https://www.dsireusa.org/

The phrase "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. Different kinds of incentives, including discounts, cash back or credit towards your monthly utility bill, might be available to you. Certain incentives may be provided via the state of Colorado, by your utility company or by county or municipality, while other incentives are federal. Types of solar incentives might include:

• Rebates: Some solar companies will help you claim a rebate, or partial refund of your purchase, for your solar system. Counties or states will also offer limited-time rebates at various times. Any rebates you receive will usually come off the total price before tax credits are calculated.
• Tax Credits: These credits are dollar-for-dollar reductions (not deductions) in the amount of tax that you owe the government.
• Net Metering: Net metering is an incentive you can get after your solar system is up and running. If you have a net metering agreement in place with your Redlands utility company, they 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 areas you might receive a refund equivalent to a percentage of the value.
• Tax Exemptions: Your solar panel system may qualify for both sales tax and property tax exemptions. Sales tax exemptions are effective at the time of purchase. Property tax exemptions let you exclude the value that solar panels add when calculating property taxes on your home.

Federal Solar Incentives

Federal incentives are the kind of incentives that you are most likely to have some knowledge of. The solar incentive that you may be most familiar with is the Federal Solar Investment Tax Credit (ITC), which gives you a credit on your taxes equal to a certain percentage of the cost of your solar system.

The ITC can be applied to a solar system 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 be eligible for the credit. Initially, the ITC applied to 30% of all system installation costs (panels, equipment, accessories and labor), although the 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 amount you can claim.

Your local Redlands solar panel installation expert can provide 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). For solar system installations that begin after January 1, 2022 and are completed by the end of 2032, homeowners can apply for a credit for 30% of the total cost. The percentage will then decrease annually until the Clean Energy Credit expires in 2035. Starting in 2023, the expansion to the program will also make credits for energy storage systems even easier to claim.

Click here to learn more about the new Inflation Reduction Act. Your local Redlands solar panel installer can answer any questions you have and explain how the new Clean Energy Credit applies to you.

State & Local Solar Incentives

Some solar incentives are often also provided at the state and local level. Like with federal incentives, these might include tax credits, rebates and more. Incentives may be handled by your county or municipality, or by the state of Colorado. Some incentives may be available for only a limited time, while others are ongoing.

Next Steps for Installing Solar in Redlands

Solar energy use nationwide has increased enormously in the past 15 years, in part due to the proliferation of solar incentives. You might receive these incentives from the federal government, the Colorado government or your local utility company. Speaking with your local Redlands solar panel installation expert is an excellent first step towards getting the most money possible when you switch to solar energy.