2023 Solar Incentives Guide for Merced, CA - Tax Credits & Rebates
In this guide, we'll cover the latest solar incentives and rebates available in Merced.
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.
Get a free quote from one of our trusted Merced solar installers to see how much you can save.
Please enter a valid 5-digit zip code!
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 Merced?
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
Solar incentives are meant to encourage people to make the switch to renewable energy by offering financial incentives meant to lower the burden of solar panel installation and use. Various types of incentives, such as cash back, discounts or monthly utility bill credits, might be available to you. Some incentives may be handled by the state of California, by your utility company or by county or municipality, while other incentives are federal. Some broad categories of solar incentives include:
- Net Metering: Net metering is an incentive you can get once your solar panels are up and running. If you have in place a net metering agreement with your Merced utility company, the company will subtract the value of the excess energy your solar system produces from your monthly utility bill. In some locations, this is a dollar-for-dollar credit, while in other places you might make back a percentage of the value.
- Tax Exemptions: Your solar panel system might qualify for both sales tax and property tax exemptions. Sales tax exemptions are effective at the time of purchase. Property tax exemptions let you ignore the value that solar panels add when you are calculating property taxes on your home.
- Rebates: Rebates, or partial refunds after a purchase, are typically given prior to any solar tax credits being calculated. These rebates may be offered by your local utility company, by your state or by your county.
- Tax Credits: Tax credits are dollar-for-dollar reductions that lower the amount of income tax you owe the federal government. (This is different from a tax deduction.)
- Solar Renewable Energy Certificate (SREC): Typically, solar systems that produce more than a predetermined (generally small) amount of electricity will qualify for SRECs or other performance-based incentives. SRECs and similar incentives are typically provided by your state government. When you receive an SREC, you can sell it to your utility company or another buyer, and this is usually considered part of your taxable income.
Federal Solar Incentives
When you hear the term "solar incentives," federal incentives may be the first thing that comes to mind. The solar incentive that you may be most familiar with is the Federal Solar Investment Tax Credit (ITC), which provides a credit on your taxes equal to a predetermined percentage of your solar system's cost.
The ITC was originally for 30% of the cost of installing solar panels, and has fluctuated slightly over time between 26-30%. The installation date of your solar system will determine what percentage you qualify for. The cost of installation includes the panels themselves as well as the cost of equipment, labor and accessories. There is no maximum claim amount. The ITC applies to solar panels installed after January 1, 2006 on your primary or secondary residence. The residence must be in the United States and owned by you.
Talking to your local Merced solar panel installer is the best way to learn more about how the ITC could apply to your situation.
In August 2022, the ITC (now referred to as the Clean Energy Credit) was expanded and extended by the passing of the Inflation Reduction Act. With the new provisions, solar installation projects that are completed between 2022 and 2032 may be eligible for a 30% tax credit. This percentage will then see a slight annual decrease until the current Clean Energy Credit expires in 2035. The expansion to the program also makes claiming credit for energy storage systems easier than ever before, starting in 2023.
Click here to learn more about the new Inflation Reduction Act. Your local Merced solar panel company is the best resource for answering your questions about the new Clean Energy Credit and how it applies to you.
State & Local Solar Incentives
Some solar incentives may be provided at the state and local level. Like with federal incentives, these might include rebates, tax credits and more. These incentives may be given out by your county or municipality, or by the California government. Some incentives may be ongoing, while others are available for a limited time.
Next Steps for Installing Solar in Merced
You can receive solar incentives from the federal government and the California government, as well as from your local utility company. The growing availability of solar initiatives over the last 15 years has helped increase solar adoption nationwide. Speaking with your local Merced solar panel installer is a great first step towards getting all the incentives you qualify for when you switch to solar energy.
Best Regional Coverage
- Great warranty coverage
- Representatives are experts on local policies
- Concierge service ensures steady communication
- Slightly limited service offerings
- Price-match guarantee
- Sleek, efficient, and durable solar panels
- Best solar battery on the market
- Some reported issues with customer service
- Customer service varies by local dealer
EcoWatch's Merced, CA Solar Incentives FAQs
Can I get any financial incentives when I add solar panels to a vacation home, rental property or commercial property?
Many solar incentives apply to a property located within the United States that you own, and most secondary residences fall under this distinction. There may be other solar incentives available for commercial properties, depending on the specifics. We recommend speaking with your local solar installer and/or tax professional to better understand what incentives will apply to your specific situation.
How much can I save annually on my electric bill if I add solar panels to my Merced home?
Generally, Merced homeowners who install solar panels save around $1,712.29 per year, or around $32,533.51 over 20 years after making the switch.
Who installs solar panels near me?
To find the top solar panel installation companies near you, read our article on the best solar companies in Merced.
How long until the federal solar tax credit ends?
The federal solar tax credit, previously called the ITC and now titled the Clean Energy Credit, is scheduled to end January 1, 2035. The current 30% credit will end in 2032, replaced by a 26% credit in 2033 and a 22% credit in 2034.
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.