2025 Solar Incentives Guide for Allentown, PA - Tax Credits & Rebates

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

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

Solar incentives are designed to encourage homeowners to switch to renewable energy by providing incentives meant to lower the financial burden of solar panel installation and use. The incentives could include upfront discounts, cash back or monthly credits towards your utility bill. Some incentives are offered by the federal government, some by the state of Pennsylvania and some by your specific utility company, county or municipality. Categories of solar incentives include:

• 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): In general, solar systems that produce over a specific (usually small) amount of electricity qualify for SRECs or similar performance-based incentives. SRECs and similar incentives are typically given by your state government. SRECs can be sold to your utility company or another buyer, and generally the money you make is normally considered part of your taxable income.
• Rebates: A solar rebate is a partial refund credited to your account after you've paid for your solar panels. These might be offered by your local utility company, your county or your state. The rebates are usually applied before tax credits are calculated.
• Net Metering: Don't forget to speak to your Allentown utility company about signing a net metering agreement. This will allow you to receive credit towards your monthly utility bill for the value of excess energy generated by your solar panels. You could receive either a dollar-for-dollar credit or a percentage of the value.
• Tax Exemptions: These could come in the form of property tax exemptions, which allow you to ignore the value of your solar system when paying taxes on your home. You could also look for exemptions on sales tax at the time of purchase.

Federal Solar Incentives

Federal solar incentives are probably the first thing that you think of when thinking about solar incentives. A federal incentive many people are likely to be familiar with is the Federal Solar Investment Tax Credit (ITC). This is a tax credit for a specified percentage of the cost of your solar system.

The ITC applies to the total cost of solar panel installation, including the panels themselves as well as equipment, labor and accessories. This credit can be claimed for panels installed after January 1, 2006, on a primary or secondary residence that you own, as long as it is located in the United States. Originally set at 30% of total costs, the credit has fluctuated over time, and you may qualify for different amounts depending on when your project was completed. There is no maximum claim amount.

To better understand exactly how much money the ITC could save you, speak with your local Allentown solar panel installation expert.

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 Clean Energy Credit runs until 2035. Solar installation projects started after January 1, 2022, and completed by the end of 2032 may qualify for a 30% tax credit; this amount will be decreased slightly each year until the end of the current program. Starting in 2023, it will also be easier to obtain credits for energy storage systems under the new laws.

More information about the new Inflation Reduction Act can be found here. Your local Allentown 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

Rebates, tax credits and more can be provided at multiple levels. Along with federal solar incentives, there are often state and local ones as well. These incentives — which may be provided by your county or municipality, or by the state of Pennsylvania — could be offered for only a limited time, or on an ongoing basis.

Next Steps for Installing Solar in Allentown

You can receive solar incentives from the federal government and the Pennsylvania government, as well as from your local utility company. The increased availability of solar initiatives in the past 15 years has helped increase solar adoption nationwide. Reaching out to your local Allentown solar panel installer is the best first step towards making sure you get all the incentives you qualify for when you switch to solar energy.