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.
Get a free quote from one of our trusted Tracy solar installers to see how much you can save.

By EcoWatch Local Advisors

Data Analysis: James Savino

Ranking Methodology: Karsten Neumeister

Updated January 20, 2023

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We work with a panel of solar experts to create unbiased reviews that empower you to make the right choice for your home. No other site has covered renewables as long as us, which means we have more data and insider information than other sites. Our rankings are never affected by revenue or partnerships.

What Solar Tax Credits, Incentives, and Rebates are Available in Tracy?

Property Tax Exclusion for Solar Energy Systems and Solar Plus Storage System

Incentive Type:
Property Tax Incentive
100% of system value; 75% of system value exemption for dual-use equipment

Western Riverside Council of Governments - Home Energy Renovation Opportunity (HERO) Financing Program

Incentive Type:
PACE Financing
Eligible products can be financed for up to 25 years, depending on the useful life of the eligible product.
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

Incentive Type:
PACE Financing
Locally determined

Self-Generation Incentive Program

Incentive Type:
Rebate Program
For projects 30 kW or larger, 50% of incentive will be received up-front; 50% will be received based on actual kWh production over the first 5 years. For projects under 30kW, 100% of the incentive will be paid up front.
Incentives will step down over time. See below for incentive amounts.

Renewable Market Adjusting Tariff (ReMAT)

Incentive Type:
Feed-in Tariff

LADWP - Feed-in Tariff (FiT) Program

Incentive Type:
Feed-in Tariff
$0.17/kWh adjusted by a time of delivery multiplier
Base price will step down over time as certain MW goals are met

California Solar Initiative - Solar Thermal Program

Incentive Type:
Rebate Program
Step 1 Incentive Rates (contact utility to determine current incentive levels):
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

Incentive Type:
Personal Tax Credit
30% federal tax credit for systems placed in service after 12/31/2021 and before 01/01/2033. Good for: solar water heat, solar photovoltaics, biomass, geothermal heat pumps, wind (small), fuel cells using renewable fuels.

Source: https://www.dsireusa.org/


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.

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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:

  1. a new solar system
  2. installed on property you own
  3. within the U.S.
  4. 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.

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