2023 Solar Incentives Guide for Allentown, PA - Tax Credits & Rebates
In this guide, we'll cover the latest solar incentives and rebates available in Allentown.
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 Allentown?
High Performance Buildings Incentive Program
Commercial loans/loan guarantees: $2 million
Grants: Lesser of 10% of project costs or $500,000
Wind and Geothermal Incentives Program
Manufacturer grants: $5,000 per job created within 3 years
Loans for geothermal systems: $3 per square foot of space served up to $5 million; also limited to 50% of eligible costs for residential systems.
Loans for wind energy production projects: $5 million
Grants for wind energy production projects: $1 million
Grants for feasibility studies: 50% of cost up to $175,000
Loan guarantee grants: Up to 75% of deficient funds up to $5 million
Solar Alternative Energy Credits
High Performance Building Incentives Program
Federal Residential Renewable Energy Tax Credit
The phrase "solar incentives" generally refers to financial incentives put in place by solar companies and the government to encourage increased use of renewable energy by making solar panels more affordable. The incentives may include upfront discounts, cash back or credit towards your monthly utility bill. Some incentives are handled by the federal government, some by the Pennsylvania government and some by your specific utility company, county or municipality. Types of solar incentives might include:
- Net Metering: Don't forget to speak to your Allentown utility company about signing a net metering contract. This allows you to receive credit towards your utility bill every month for the value of excess energy your solar panels generate. You could receive either a dollar-for-dollar credit or a percentage of the value.
- Tax Credits: These credits are dollar-for-dollar reductions (not deductions) in how much income tax you owe the federal government.
- Tax Exemptions: These might come in the form of property tax exemptions, which allow you to ignore the value added by your solar panels when paying property tax on your home. You may also qualify for an exemption on sales tax at the time of purchase.
- Solar Renewable Energy Certificate (SREC): SRECs and similar performance-based incentives are usually handled by your state government. Once your solar panel system meets the threshold (usually a small amount of energy production), you are eligible to receive SRECs that you can then sell to your utility company or other buyers. The money you make from the sale is generally considered part of your taxable income.
- Rebates: Rebates, or partial refunds after a purchase, are typically applied prior to any solar tax credits being calculated. Rebates might be given by your local utility company, by your county or by your state.
Federal Solar Incentives
Federal incentives are the kind of incentives that you are most likely to have heard of. The Federal Solar Investment Tax Credit, or ITC, is the most commonly known federal solar incentive. The ITC allows you to claim a tax credit for a predetermined percentage of your solar system's cost.
The ITC was originally for 30% of the total cost of installing solar panels, although that number has fluctuated slightly over the last few years between 26-30%. The percentage you qualify for will depend on when your solar system was installed. The total installation cost includes the panels themselves as well as the cost of accessories, labor and equipment. There is no maximum amount you can claim. The ITC applies to solar panels installed after January 1, 2006 on your primary or secondary residence. The residence must be in the United States and owned by you.
To better understand exactly how much money the ITC could save you, talk to your local Allentown solar panel installer.
The Inflation Reduction Act, passed in August 2022, made some changes to the ITC (as well as renaming it to the Clean Energy Credit). The new Clean Energy Credit is valid until 2035. Homeowners can now receive a 30% credit for solar systems installed between 2022 and 2032. The credit will then see a slight annual decrease until its expiration. Starting in 2023, the expansion to the program will also make credits for energy storage systems even easier to claim.
More information about the new Inflation Reduction Act can be found here. Your local Allentown solar panel installer can answer any questions you have and explain how the new Clean Energy Credit may apply to you.
State & Local Solar Incentives
Tax credits, rebates and more might be provided at multiple levels. Along with federal solar incentives, there are often state and local ones, too. Certain incentives are ongoing, while others may only be available for a limited time. Incentives might be provided by the Pennsylvania government, or by your county or municipality.
Next Steps for Installing Solar in Allentown
There are a variety of solar incentives: those given by the federal government, those given by the Pennsylvania government and those given 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. When you're ready to make the change to solar energy, reaching out to your local Allentown solar panel installation expert is a great first step.
EcoWatch's Allentown, PA Solar Incentives FAQs
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.