2023 Solar Incentives Guide for Tracy, CA - Tax Credits & Rebates
In this guide, we'll cover the latest solar incentives and rebates available in Tracy.
You'll learn about:
- Local & State Solar Incentives
- Federal Tax Credits (Updated for 2023 and beyond)
- Ways to optimize your solar investment
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What Solar Tax Credits, Incentives, and Rebates are Available in Tracy?
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
The term "solar incentives" generally refers to financial incentives that are in place to encourage the use of renewable energy by making installing and using solar panels more affordable. Different types of incentives, such as discounts, cash back or credit towards your monthly utility bill, might be available to you. Certain incentives may be offered by the California government, by your utility company or by county or municipality, while others are federal. Some broad categories of solar incentives include:
- Tax Exemptions: Tax exemptions may come in two forms. The first is sales tax exemption, applied at the time you purchase your solar panels. The second is property tax exemption, which allows you to exclude the added value of your solar system when paying property tax on your house.
- Net Metering: You may be able to sign a net metering contract with your Tracy utility company, that may apply to all or a percentage of the excess electricity that is generated by your solar panels. Your utility company will then deduct this value from your monthly utility bill.
- Rebates: Solar rebates might be provided by your local utility company, or by your state or county. These rebates are essentially partial refunds that are applied after you pay for solar panels and before tax credits are calculated.
- Tax Credits: Different from tax deductions, tax credits reduce, dollar-for-dollar, the amount of income tax that you owe the government.
- Solar Renewable Energy Certificate (SREC): SRECs and other performance-based incentives are typically handled at the state level. Once your solar system meets the threshold (normally a small amount of energy production), you can receive SRECs that you can then sell to your utility company or other buyers. The money you make from the sale is usually considered part of your taxable income.
Federal Solar Incentives
Federal solar incentives are likely to be the first thing that you think of when thinking about solar incentives. The Federal Solar Investment Tax Credit, or ITC, is the most well-known federal solar incentive. The ITC provides you with a tax credit for a specific percentage of your solar system's cost.
The ITC applies to solar panels installed after January 1, 2006 on a primary or secondary residence that you own in the United States. Originally, the tax credit was for 30% of the total cost — for panels, labor, equipment and accessories — although it may range from 26-30%, depending on when your solar system was installed. There is no cap on the claim amount.
Curious how the ITC might apply to your specific situation? Contact your local Tracy solar panel installer to get more information.
In August 2022, the ITC (now called the Clean Energy Credit) was expanded and extended by the passing of the Inflation Reduction Act. The new Clean Energy Credit now runs until 2035. You can now receive a 30% credit for solar systems that began installation after January 1, 2022 and are completed by the end of 2032. This new credit will then be decreased by a few percentage points every year until it expires. 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. To understand how the new Clean Energy Credit might apply to you, talk to your local Tracy solar installation expert.
State & Local Solar Incentives
Some solar incentives are often also provided by state and local governments. As with federal incentives, these may include tax credits, rebates and more. Incentives might be provided by your county or municipality, or by the state of California. Some incentives might only be available for a limited time, while others are ongoing.
Next Steps for Installing Solar in Tracy
Solar energy use nationwide has gone up significantly in the past 15 years, in part thanks to the proliferation of solar incentives. You might receive these incentives from the California government, the federal government or your local utility company. When you're ready to make the change to solar energy, reaching out to your local Tracy solar panel installation expert is an excellent place to start.
EcoWatch's Tracy, CA Solar Incentives FAQs
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