Solar energy has been around for quite a while as a great alternative energy option for those looking to reduce their reliance on fossil fuels. As solar technology has become more affordable for the average homeowner, more and more homes have begun using this alternative energy source. Currently, California is offering solar energy incentives to help encourage more homeowners to make the switch.
Federal Solar Tax Credit
This tax credit has been around for years and offers homeowners the ability to claim a tax incentive to help recoup some of the costs of their new solar power system. Originally, this program had a cap of 26% of the price of the new system.
However, the recent passing of the Inflation Reduction Act of 2022 increased this cap rate to 30% of the price of the new system installation. It’s important to note that this cap rate will decrease steadily after 2032. Starting with 26% in 2033, 22% in 2034, and so on.
Under this program, homeowners will receive a credit on their federal tax returns for the cap amount. For instance, if you pay a total of $35,000 for both labor and equipment for the installation of your new home solar system, you can claim a tax credit of $10,500 on your federal tax return for the 2024 year.
It’s very important to note that there are some key restrictions that are required for eligibility for this tax credit. You may not claim this incentive if you install used solar panels. Additionally, you may not be eligible for this tax credit if you rent and don’t fully purchase the solar panels.
This incentive is only offered as a credit to your federal taxes. You will not get a refund check. However, you may rollover the tax credit into future tax years if you can’t use the entire amount during the 2024 tax year.
Solar System Property Tax Exemption
Typically, when you increase the value of your home in California, that increases the property’s overall assessed value. This translates to a larger tax bill. However, under the Solar System Property Tax Exemption, homes that see an increase in property value due to the addition of a solar energy system will not see an increase in their taxes.
Disadvantaged Communities – Single-Family Solar Homes (DAC-SASH) Program
Known as the DAC-SASH program, this tax incentive is specifically designed for homeowners living in disadvantaged communities that have a low income. Homeowners can receive a tax credit of up to $3.00 per watt that the new solar system can produce. This can provide a significant amount of money to help cover a large portion or even the full cost of a new solar energy system.
California’s Net Energy Metering (NEM) Program
Another key incentive that homeowners can enjoy when installing a new solar energy system is net metering. This is where a home’s surplus of energy is directed into its local power grid. In return, these homeowners receive a credit on their energy bills. This helps to reduce the cost of monthly electricity bills for Californians.
Self-Generation Incentive Program (SGIP)
The SGIP is geared toward providing incentives to homeowners who invest in solar energy storage systems. The amount of the incentive will vary depending on numerous factors. Those homeowners in high fire risk areas or in areas that have public safety power shutoff events are eligible for the highest incentives under this state program.
San Diego Green Building Incentive Program
It’s very common for local areas throughout California to offer their own incentives to homeowners to further encourage the installation of these solar energy systems. San Diego currently will waive the building permit and plan check fees when it comes to the installation of solar panel systems.
CleanPowerSF Solar Inverter Replacement Program
Homeowners who already have a solar energy system that is over 10 years old and doesn’t have any remaining warranty coverage are eligible for this incentive. It’s offered by the San Francisco Public Utilities Commission and CleanPowerSF. Homeowners can receive up to $3,000 to help cover the cost of replacing their damaged or old solar inverter. It’s vital to note that you will need to use one of the participating installers outlined on the CleanPowerSF Fact Sheet to receive this incentive.
Alameda Municipal Power Income-Qualified Solar Rebate
Homeowners who are customers of Alameda Municipal Power are eligible to receive this tax incentive for installing solar panels on their homes. Those who earn less than $106,000 a year and have a home that was built before January 1, 2020, can receive a $500 rebate.
Property Assessed Clean Energy Program
Known as PACE financing, this offers homeowners who invest in solar energy systems a favorable financing option. You can enjoy a $0 down payment with no monthly payment. Instead, you pay for your solar panels through your annual property taxes. Depending on your specific solar system choice, the repayment period will run between 10 and 30 years. It’s important to note that there is a lien placed on your home until the amount of property taxes repaid fully covers the cost of the solar energy system installation.
Los Angeles Department of Water and Power Solar Rooftops Program
If you don’t have the money to invest in a home solar energy system, you can enter into the LADWP’s Solar Rooftops Program. Under this program, the LADWP will install, connect, and maintain solar panels at your home without any cost to you. In fact, you’ll receive an annual payment from LADWP for the next 20 years. The yearly payment amount will vary from a low of $240 to a high of $600. Your normal electric bills will not be affected under this program.
Lancaster Energy Power Choice
If you like the idea of having a solar energy system installed at your home but don’t have the funds to do so, Lancaster Energy may be able to help. Under this program, Tesla will install rooftop solar panels and a battery storage system at your home at no cost to you. You simply pay your normal electric bill.
While there is no incentive amount you can receive from this program, it can help to reduce your household’s carbon footprint. It’s crucial to note that you’ll need to buy out the solar equipment and battery if you decide to leave this Power Choice Program.
Silicon Valley Power Low-Income Solar Grant Program
Under this program, customers of Silicon Valley Power can be eligible to receive a grant for the installation of a brand-new solar energy system for their homes. These homeowners must be part of the Financial Rate Assistance Program to qualify. Incentives are $3.50 per watt for solar energy systems up to a maximum of 3 kilowatts of power.
Reliable Solar Panel Installation Service
Loves Air offers reliable solar panel installation services to the Modesto, CA community. We can also help with all your heating, air conditioning, whole house fan, thermostat, water heater, duct sealing, and window needs. Give us a call today to book your next service appointment with one of our solar professionals.
