2024 Solar Incentives Guide for Merced, CA - Tax Credits & Rebates
In this guide, we'll cover the latest solar incentives and rebates available in Merced.
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 Merced?
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 term "solar incentives" refers broadly to financial incentives designed to encourage the use of renewable energy by making installing and using solar panels more affordable. Various types of incentives, like cash back, discounts or monthly utility bill credits, might be available to you. Some incentives may be provided via the California government, by your utility company or by county or municipality, while other incentives are federal. Some solar incentives you might qualify for are:
- Net Metering: You may be able to sign a net metering contract with your Merced utility company. This agreement may apply to all or a percentage of the excess electricity that is generated by your solar panels. They will then deduct this value from your monthly utility bill.
- Tax Exemptions: Sales tax exemptions go into effect at the point of sale for your solar system. Property tax exemptions let you exclude the value added by your solar system when you're calculating how much property tax you need to pay.
- Rebates: A solar rebate is a partial refund given after you've purchased your solar panels. These might be offered by your local utility company, your state or your county. The discount that rebates offer is normally applied to the price of solar panels before calculating tax credits.
- Tax Credits: Tax credits reduce, dollar-for-dollar, the total amount of tax you owe the government. These are different from tax deductions.
- 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 other similar performance-based incentives. SRECs and performance-based incentives in general are typically offered by your state government. You can sell SRECs to your utility company or another buyer, and this is usually considered part of your taxable income.
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
Best Social Impact
Palmetto Solar
- Expansive service area
- Makes charitable contributions
- Certified B Corp
- No leases or PPAs
- Quality of installation may vary by location
Federal Solar Incentives
Federal incentives are the type of incentives that you are most likely to have some familiarity with. A federal incentive many people are likely to be familiar with is the Federal Solar Investment Tax Credit (ITC). This incentive is a tax credit for a specific percentage of the cost of your solar system.
The ITC can be applied to the total cost of installing a solar system, including the panels themselves as well as equipment, accessories and labor. This credit can be claimed for panels installed after January 1, 2006, on a primary or secondary residence that you own and that is located in the United States. The tax credit ranges from 26-30% of total costs depending on when your project was completed. There is no maximum claim amount.
Wondering how the ITC applies to your specific situation? Contact your local Merced solar panel installation expert to get more information.
The Inflation Reduction Act, passed in August 2022, made some changes to the ITC (as well as retitling it the Clean Energy Credit). For solar system installations that begin after January 1, 2022, and are completed by the end of 2032, homeowners may be eligible for a credit for 30% of the total cost. The percentage will then decrease annually until the Clean Energy Credit expires in 2035. Starting in 2023, it will also be easier to get credits for energy storage systems under the new laws.
Click here to learn more about the new Inflation Reduction Act. Your local Merced solar panel installers are the best people to answer your questions about the new Clean Energy Credit and how it applies to you.
State & Local Solar Incentives
In addition to those provided at the federal level, there are often also state solar incentives. Rebates, tax credits and more might be available at a more local level. These incentives — which may be given by the state of California, or by your county or municipality — may be offered for only a limited time, or on an ongoing basis.
Next Steps for Installing Solar in Merced
There are a variety of solar incentives: those offered by local utility companies, those offered by the California government and those offered by the federal government, to name a few. Solar energy utilization has grown enormously in the last 15 years, partially thanks to these incentives. Your local Merced solar panel installer can give you more information about which incentives you should apply for, and get you started on the path to switching to renewable energy today.
EcoWatch's Merced, CA Solar Incentives FAQs
How can I find out if I qualify for certain solar incentives?
It's a smart idea to get in touch with your local Merced solar installer for a better understanding of which incentives your project will qualify for. Typically, solar incentives apply to new solar systems installed on property you own (in the U.S.) within a specified date range. Some incentives, such as those provided at the level of the California government, might have additional requirements.
What are the highest-rated solar panel installation companies near me?
To find the right solar panel installer for you, check out our guide to the top solar companies in Merced.
I want to change out my appliances for ones that are more energy-efficient. Are there any credits I can claim?
The new Inflation Reduction Act creates several new financial incentives for making eco-friendly improvements to your home. More details about these incentives, including information about incentives for purchasing new appliances, can be found here.
Can I use a combination of 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. Be sure to talk through your plan with your local Merced solar installer. They can help you as you plan for your project and educate you on the various incentives that you will or won't qualify for.
Can I receive any incentives when I add solar panels to a rental property, vacation home or commercial property?
Many solar incentives apply to a property you own that is located within the United States, and most secondary residences fall into this category. There may be other solar incentives available for commercial properties, depending on the details. We recommend talking to your local solar installer and/or tax professional to better understand what incentives will apply to your specific situation.
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.