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
Solar installers are experts in maximizing your solar tax credits and rebates.
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Updated September 15, 2023
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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
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 implemented by the government and by solar companies to encourage increased use of renewable energy by making installing and using solar panels more affordable. You might be eligible for several kinds of incentives, such as cash back, discounts or credit towards your monthly utility bill, depending on your situation. Some incentives come from your specific utility company, county or municipality, some from the California government and others from the federal government. Types of solar incentives might include:
- Tax Credits: Unlike tax deductions, tax credits are dollar-for-dollar reductions in the amount of income tax that you owe the federal government.
- Tax Exemptions: These can come in the form of property tax exemptions, which let you ignore the value added by your solar panels when paying property tax on your home. They may also include exemptions on sales tax at the time of purchase.
- Rebates: A solar rebate is a partial refund given after you've purchased your solar system. Rebates might be offered by your local utility company, your state or your county. The rebates are usually applied before calculating tax credits.
- Net Metering: Make sure you speak with your Tracy utility company about signing a net metering agreement. This allows you to receive credit towards your monthly utility bill for the value of excess energy generated by your solar panels. You may receive either a dollar-for-dollar credit or a percentage of the value.
- Solar Renewable Energy Certificate (SREC): SRECs and other similar performance-based incentives are typically handled at the state level. Once your solar system meets a certain threshold (typically a small amount of energy production), you are eligible to receive SRECs that can be sold to your utility company or other buyers. The money you make from the sale is generally considered part of your taxable income.
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Federal Solar Incentives
Federal solar incentives are likely to be the first thing that comes to mind when thinking about solar incentives. You might have heard of the Federal Solar Investment Tax Credit, or ITC. This incentive is a tax credit that reduces your taxes by a predetermined percentage of the money you spend on your solar system.
The ITC applies to the total cost of installing a solar system, including the panels themselves as well as labor, accessories and equipment. This credit can be claimed for panels installed after January 1, 2006 on a primary or secondary residence that you own, as long as it is located in the United States. From its original value of 30% of the total cost, the credit has fluctuated slightly between 26-30%, and you may qualify for varying percentages depending on when your project was completed. There is no maximum amount you can claim.
Your local Tracy solar panel installation expert can give you more information about the ITC and how it may apply to your situation.
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
How can I learn if I qualify for different solar incentives?
In most cases, solar incentives apply to:
- a new solar system
- installed on property you own
- within the U.S.
- between the dates specified by a particular incentive.
Specific incentives, including those given out by the California government or by your county/municipality, might have additional qualifications. Speak with your local Tracy solar installer to learn more about what incentives your project will qualify for.
If I already have a solar system installed on my house, can I still claim incentives?
If your solar panels were installed after January 1, 2022, you may qualify for the recently increased 30% tax credit under the Inflation Reduction Act. If your system was installed between 2006 and 2021, you might qualify for a tax credit between 26% and 30%, depending on the date of installation. Speaking with the company that installed your solar system, or any local Tracy solar installer, can help you learn more about what incentives you qualify for.
How much can I save annually on my electric bill if I install solar panels on my Tracy home?
Typically, Tracy homeowners who install solar panels save about $1,738.28 per year, or about $33,027.23 over 20 years after making the switch.
Who installs solar panel systems near me?
To find the right solar panel installer for you, check out our guide to the best solar companies in Tracy.
What are the environmental benefits of switching to solar energy?
You can reduce your carbon footprint by 250 pounds of CO2 annually when you install solar panels. This adds up to around 5,000 pounds over 20 years. In addition, solar power is a renewable energy source, which means that switching your home over lessens the drain on our planet's resources.
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.