2024 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 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 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
Source: https://www.dsireusa.org/
Solar incentives are intended to encourage homeowners to make the switch to renewable energy by providing financial incentives that lower the burden of solar panel installation and use. You may qualify for different 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 state of Pennsylvania and others from the federal government. You might qualify for any of the following types of solar incentives:
- Tax Credits: Unlike 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 might be available to you if you have a solar system that produces more than a specified (generally small) amount of electricity. Performance-based incentives are typically handled at the state level. You can sell SRECs to your utility company or other buyers, and the money you make is usually 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. These rebates may be given by your local utility company, by your county or by your state.
- Net Metering: Be sure to talk with your Allentown utility company about signing a net metering agreement. This allows you to receive 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: Sales tax exemptions go into effect at the time of purchase for your solar system. Property tax exemptions let you ignore the value that your solar panels add when you're calculating the amount of property tax you need to pay.
Best National Provider
SunPower
- Most efficient panels on the market
- National coverage
- Cradle to Cradle sustainability certification
- Great warranty coverage
- Expensive
- Customer service varies by local dealer
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
Federal Solar Incentives
Federal solar incentives are likely the first thing that you think of when you think about solar incentives. It's likely that you've heard of the Federal Solar Investment Tax Credit, or ITC. The ITC is a tax credit that reduces your taxes by a predetermined percentage of the money you spend installing solar panels.
The ITC applies towards solar systems installed after January 1, 2006, and allows you to deduct from your taxes a percentage of the total cost of solar panels, equipment, labor and accessories. You can claim this credit for a solar panel system installed on a primary or secondary residence in the United States that you own. Originally, you could claim 30% of the total cost, although depending on when the project was completed, your credit may range from 26-30%. There is no maximum amount you can claim.
Talking to your local Allentown solar panel installer is the best way to learn more about how the ITC could apply to your situation.
The Inflation Reduction Act, passed in August 2022, added more provisions to the ITC (as well as renaming it to the Clean Energy Credit). For solar systems installed between January 1, 2022, and December 31, 2032, homeowners can apply for a credit equal to 30% of the total cost. This percentage will decrease annually after 2032 until the Clean Energy Credit expires in 2035. Starting in 2023, it will also be easier to claim credits for energy storage systems with the new act.
Click here to learn more about the new Inflation Reduction Act. Your local Allentown solar panel installer 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 offered at the local or state level. As with federal incentives, these might include tax credits, rebates and more. These incentives — which may be provided by your county or municipality, or by the state of Pennsylvania — may be offered on an ongoing basis, or for only a limited time.
Next Steps for Installing Solar in Allentown
Solar incentives might be offered by the federal government, the Pennsylvania government or your local utility company. The growing number of available solar incentives has contributed to a large increase in solar energy use in the last 15 years. We suggest talking to your local Allentown solar installer to learn more about these incentives and to be sure that you're getting the most money possible for your solar system.
EcoWatch's Allentown, PA Solar Incentives FAQs
How can I learn if I qualify for different solar incentives?
It's a smart idea to get in touch with your local Allentown solar installer to get an understanding of which incentives your project will qualify for. Usually, solar incentives apply to new solar systems installed on a property you own (in the U.S.) between the dates specified by the incentive. Some incentives, like those given by the state of Pennsylvania, may have other requirements.
How much can I save annually on my electric bill if I add solar panels to my house in Allentown?
When you add solar panels to your Allentown home, you can expect to save approximately $728.23 per year, or around $13,836.45 over the next 20 years.
What are the best solar panel installation companies near me?
To discover the top solar panel installation companies near you, read our article on the best solar companies in Allentown.
If I switch my appliances out for ones that can use solar energy, are there any credits that I can claim?
Under the new Inflation Reduction Act, there are a number of new financial incentives to encourage you to make eco-friendly improvements to your home. More details on these incentives, including information about incentives for purchasing new appliances, can be found here.
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.