In an effort to encourage consumers to use clean energy, homes and commercial establishments that will install solar panels until 2022 can enjoy California solar incentives that include a 26% tax credit.
The 26% solar incentives will continue until December 31, 2022, before it will decline to 22% the following year. In 2024, this tax credit for residential homes will end, according to professional roofing and solar installation expert Roofing Yorkshire website.
Sample Computation
As of this writing, the average cost of solar panel installation in California is between $12,000 and $16,500 (or $2.4 and $3.30 cost per watt).
But with 26% solar incentives, most homeowners can expect a $3,120-$4,290 discount, bringing down the final installation cost between $8,880 and $12,210.
A word of caution: Homeowners should have their solar panel system installed before 2024 to take advantage of the tax incentives.
Other Possible Solar Incentives
Aside from the 26% tax incentives, PG&E, SoCalGas, SDG&E, and SCE customers may be eligible for a rebate if they buy a battery system along with their solar roof panels. This rebate can be as high as $200 per kilowatt-hour (kW).
To further encourage the widespread adoption of clean energy, homeowners with solar panels can expect no property tax increase until the end of 2024.
Meanwhile, SMUD provides rebates worth $300 to residential customers in Sacramento who will install a new solar panel system, whereas residents covered by the City of San Francisco GoSolarSF program can expect cash incentives amounting to $100-$2,000 per kW for a maximum of 4 kW (this wide variation is due to different factors such as the applicant’s income, the solar system size, and the location of the house).
For low-income residents who receive service from PG&E, SDG&E, and SCE, they may qualify for a program called Single-Family Affordable Solar Housing or SASH which comes with a capacity incentive worth $3,000 for every kW of solar panels installed.
To qualify for SASH, the homeowner must occupy the property where the solar panels will be installed, and the total household income should be 80% of the region’s median income or less based on the recent income tax returns.
Claiming Your California Solar Incentives and Taxes: Step-by-Step Process
Your eligibility for the solar incentives and other rebates depends on several factors, including the type of your solar panels, whether you purchase or lease a home where the panels will be installed, and the continued subsidization in your state.
You may also want to consult a professional tax preparer to make sure that you enjoy all the solar tax benefits and incentives you are eligible to receive.
- Complete the IRS Form 5965 or the Federal Solar Tax Credit Form.
- Enter the entire cost of your solar panel installation in the “Qualified solar electric property costs” box.
- On line 6, multiply the total by 26% to get tax rebates.
- Enter the amount on Form 1040’s “Residential energy credits” section.
- Include the Form 5965 with your tax submission.
Final Thought
Make sure that your solar roof panel system is installed by a licensed and insured roofing company with a proven track record. This will ensure that you can enjoy all the solar incentives and rebates and maximize the energy efficiency of your panels.
Contact Yorkshire Roofing and RoofMax Solar if you want to take advantage of clean energy and its substantial tax rebates. Because the company has years of experience as a roofing contractor, they can ensure that your solar panels will not compromise the structural integrity of your roof.
Before installation, Yorkshire Roofing technicians will examine your roof design, the orientation of your house, and the amount of sunshine in your region to ensure that your solar panel can harvest and generate the optimal amount of sun-derived energy.
