2025 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 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 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 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/
Solar incentives are intended to make renewable energy usage more affordable via financial incentives to help people install solar panels on their homes. You might be eligible for different types of incentives, including cash back, discounts or monthly utility bill credits, depending on your situation. Certain incentives come from your specific utility company, county or municipality, some from the state of California and others from the federal government. Types of solar incentives might include:
- Tax Credits: Tax credits decrease, dollar-for-dollar, how much income tax you owe the government. Tax credits differ from tax deductions.
- Solar Renewable Energy Certificate (SREC): SRECs and similar other performance-based incentives may be available to you if you have a solar system that produces over a specified (generally small) amount of electricity. These types of incentives are normally handled at the state level. You can sell your SRECs to your utility company or other buyers, and the money you make is typically considered part of your taxable income.
- Rebates: Solar rebates can be provided by your state or county, or by your local utility company. These rebates are essentially cash back that is applied after your purchase of solar panels and before tax credits are calculated.
- Net Metering: Be sure to speak with your Tracy utility company about signing a net metering contract. This allows you to get a credit towards your utility bill every month 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.
- Tax Exemptions: These may come in the form of property tax exemptions, which let you ignore the value added by your solar panels when calculating the taxes you pay on your house. You may also qualify for an exemption on sales tax at the time of purchase.
Federal Solar Incentives
Federal solar incentives are likely to be the first thing that you think of when thinking about solar incentives. A federal incentive many people are likely familiar with is the Federal Solar Investment Tax Credit (ITC). This is a tax credit for a specified percentage of your solar system's cost.
The ITC can be applied to the total cost of installing a solar system, including the panels themselves as well as accessories, labor and equipment. You can claim this credit for panels installed after January 1, 2006, on a primary or secondary residence located in the United States that you own. The tax credit ranges from 26-30% of total costs depending on when your project was completed. There is no maximum claim amount.
To find out exactly how much the ITC could save you, talk to your local Tracy solar panel installer.
In August 2022, the ITC (now titled the Clean Energy Credit) was bolstered by the passage of the Inflation Reduction Act. The Clean Energy Credit is valid until 2035. Solar installation projects started after January 1, 2022, and completed by the end of 2032 may qualify for a 30% tax credit. The amount will then decrease slightly on a yearly basis until the end of the current program. Starting in 2023, the expansion will also make claiming credit for energy storage systems easier than ever before.
Click here to learn more about the new Inflation Reduction Act. Your local Tracy solar panel installation experts can answer any questions you have and explain how the new Clean Energy Credit applies to you.
State & Local Solar Incentives
Some solar incentives are often also provided by state and local governments. As with federal incentives, these can include rebates, tax credits and more. These incentives might be given out by the California government, or by your county or municipality. Some are ongoing, while others are available for a limited time.
Next Steps for Installing Solar in Tracy
There are a variety of solar incentives: those offered by the federal government, those given by the California government and those offered by local utility companies, to name a few. The use of solar energy has grown enormously in the last 15 years, partially thanks to these incentives. Call your local solar panel installation expert today to discover more about the various programs and to save the most money possible on solar panels for your Tracy home.
EcoWatch's Tracy, CA Solar Incentives FAQs
If my house already has solar panels, can I still claim incentives?
An excellent idea would be to talk to someone from the company that installed your solar panels – or reach out to a local Tracy solar installer — to better understand which incentives you might qualify for. If your solar panels were installed after January 1, 2022, you likely qualify for the recently increased 30% tax credit under the Inflation Reduction Act. Solar panels installed between 2006 and 2021 may qualify for a tax credit of 26-30%.
How much can I save on my electric bill annually if I add solar panels to my Tracy home?
After adding solar panels to your house in Tracy, you can expect to save around $1,738.28 per year, or about $33,027.23 over the next 20 years.
Who installs solar panel systems near me?
To find the right solar panel installer for you, check out our guide to Tracy's best solar panel companies.
I want to change out my appliances for ones that are more energy-efficient. Are there any incentives I can apply for?
Under the new Inflation Reduction Act, there are a number of new financial incentives that are available when you 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 use multiple types of renewable energy to power my home?
You can use multiple types of renewable energy, or a combination of renewable and non-renewable energy, to power your home. Make sure you talk through your ideas with your local Tracy solar installation expert. They can help you with the plan for your project and give you an understanding of various incentives that you may or may not qualify for.
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