2024 Solar Incentives Guide for Modesto, CA - Tax Credits & Rebates
In this guide, we'll cover the latest solar incentives and rebates available in Modesto.
You'll learn about:
- Local & State Solar Incentives
- Federal Tax Credits (Updated for 2024 and beyond)
- Ways to optimize your solar investment
Solar installers are experts in maximizing your solar tax credits and rebates.
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What Solar Tax Credits, Incentives, and Rebates are Available in Modesto?
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 propertyThe 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/
The phrase "solar incentives" broadly refers to financial incentives that are in place to encourage the use of renewable energy by making installing and using solar panels more affordable. Incentives might include things like discounts, cash back or credit on your utility bill each month. Some incentives are provided by the federal government, while others are provided by the California government or by your specific utility company, county or municipality. Types of solar incentives might include:
- Rebates: Rebates, or cash back after a purchase, are usually given before any solar tax credits are calculated. Rebates might be provided by your local utility company, by your state or by your county.
- Net Metering: Don't forget to speak to your Modesto utility company about signing a net metering agreement. This will allow you to receive credit towards your utility bill every month for the value of excess energy your solar panels generate. You could receive either a dollar-for-dollar credit or a percentage of the value.
- Tax Exemptions: Sales tax exemptions are applied at the time of purchase for your solar panels. Property tax exemptions allow you to exclude the added value of your solar system when calculating how much property tax you need to pay on your house.
- Solar Renewable Energy Certificate (SREC): In most cases, solar systems that produce more than a specified (usually small) amount of electricity qualify for SRECs or similar performance-based incentives. SRECs and similar incentives are typically given by your state government. SRECs can be sold to your utility company or another buyer, and this is usually considered part of your taxable income.
- Tax Credits: Tax credits are dollar-for-dollar reductions in the amount of income tax that you owe the government. (A tax credit is different from a tax deduction.)
Best National Provider
SunPower
- Most efficient panels on the market
- National coverage
- Cradle to Cradle sustainability certification
- Great warranty coverage
- Expensive
- Customer service varies by local dealer
Best Regional Coverage
Momentum Solar
- Great warranty coverage
- Representatives are experts on local policies
- Concierge service ensures steady communication
- Slightly limited service offerings
Best for Leasing
Sunrun
- Expansive service area
- Many financing options
- Some reported issues with customer service
- Some reported issues with door-to-door sales
Federal Solar Incentives
When someone says "solar incentives," you probably think of federal incentives first. One of the incentives that most people are probably familiar with is the Federal Solar Investment Tax Credit (ITC). This is a tax credit for a specific percentage of the cost of your solar system.
The ITC applies to a solar system installed on your primary or secondary residence in the United States. The solar panels have 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 costs (panels, equipment, labor and accessories), although the covered amount has fluctuated 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.
To best understand how the ITC will apply to you, get in touch with your local Modesto solar panel installer and ask for more information.
In August 2022, the ITC (now referred to as the Clean Energy Credit) was expanded and extended by the passage of the Inflation Reduction Act. For solar systems installed between January 1, 2022, and December 31, 2032, homeowners can apply for a credit for 30% of the total cost. After 2033, the percentage will decrease annually until the Clean Energy Credit expires in 2035. Starting in 2023, the expansion will also make credits for energy storage systems even easier to claim.
More information about the new Inflation Reduction Act can be found here. Your local Modesto solar panel installation expert is the best person to answer your questions regarding the new Clean Energy Credit and how it applies to you.
State & Local Solar Incentives
Some solar incentives may be provided by state and local governments. As with federal incentives, these may include tax credits, rebates and more. These incentives may be offered by your county or municipality, or by the California government. Certain incentives are ongoing, while others are available for a limited time.
Next Steps for Installing Solar in Modesto
The expanding number of available solar incentives has helped tremendously increase the use of solar power nationwide over the last 15 years. You can get solar incentives from the California government, the federal government or your local utility company. We recommend talking to your local Modesto solar installer to learn more about these incentives and to make sure that you're getting the most money possible for your solar system.
EcoWatch's Modesto, CA Solar Incentives FAQs
How do I learn if I qualify for specific solar incentives?
It's best to speak with your local Modesto solar installer for a better understanding of which incentives your project may qualify for. Generally, solar incentives apply to new solar systems installed on a property you own (in the U.S.) between the dates specified by the incentive. Some incentives, like those offered by the government of California, may have other requirements.
How much will solar panels save me annually on my electric bill in Modesto?
Once you add solar panels to your Modesto home, you can anticipate savings of around $1,727.73 per year, or around $32,826.82 over the next 20 years.
What are some environmental benefits of installing solar panels on my house?
Solar energy is a renewable energy source — by switching where you get your energy, you help reduce the strain on our planet's resources. Solar panels can also reduce your home's CO2 emissions by 250 pounds annually, or around 5,000 pounds in 20 years.
If I change out my appliances for ones that can utilize solar energy, are there benefits that I can claim?
Under the new Inflation Reduction Act, there are a variety of new financial incentives to encourage you to make eco-friendly improvements to your home. More details on these incentives, including information about incentives for purchasing new appliances, can be found here.
Can I claim incentives both towards the up-front cost of solar panels, and later as reimbursement?
Yes, you can receive both tax credits and rebates towards the cost of your solar panels. Depending on which incentives you are receiving, they may apply in a different order. Make sure that you speak with your solar installer or a local tax professional to verify that you are claiming the correct incentives and getting the most money you can.
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.