2023 Solar Incentives Guide for Bethlehem, PA - Tax Credits & Rebates
In this guide, we'll cover the latest solar incentives and rebates available in Bethlehem.
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 Bethlehem?
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
First Energy (MetEdison, Penelec, Penn Power, West Penn Power) - Residential Solar Water Heating Program
FirstEnergy (MetEdison, Penelec, Penn Power, West Penn Power) - Residential Energy Efficiency Programs
Clothes Washer: $25- $50
Clothes Dryer: $50
Fridge/Freezer Recycling: $50
HVAC tune up: $50
Furnace Fan Motor: $150
Ductless Minisplit AC : $200
Central AC: $100 - $200
Air Source Heat pump: $250 - $500
Geothermal Heat Pump: $600
Packaged Terminal AC: $75
Packaged Terminal Heat Pump: $150
Programmable Thermostat: $25
Solar Water Heat: $500
Heat Pump Water Heater: $500
Home Energy Audit: $250
Lighting: Available as in-store discount in participating stores
Federal Residential Renewable Energy Tax Credit
The phrase "solar incentives" generally refers to financial incentives implemented by the government and by solar companies to encourage the adoption and use renewable energy by making solar panels more affordable. Incentives may include things like discounts, cash back or credit towards your monthly utility bill. Some incentives are offered federally, while others are provided by the Pennsylvania government or by your utility company, county or municipality. Types of solar incentives might include:
- Tax Credits: Tax credits are dollar-for-dollar reductions (not deductions) in the amount of tax that you owe the government.
- Tax Exemptions: Sales tax exemptions are effective 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 on your home.
- Net Metering: Net metering is an incentive you can get after your solar panels are up and running. If you have a net metering agreement with your Bethlehem utility company, the company will subtract the value of the excess energy your solar system produces from your monthly utility bill. In some areas, this credit is dollar-for-dollar, while in other areas you may receive a refund equivalent to a percentage of the value.
- Rebates: A rebate is a partial refund given after you've purchased your solar system. Rebates may be offered by your local utility company, your county or your state. The discount that rebates offer is normally applied to the price of solar panels before calculating tax credits.
- Solar Renewable Energy Certificate (SREC): In general, solar systems that produce more than a predetermined (usually small) amount of electricity can qualify for SRECs or other similar performance-based incentives. SRECs and the like are typically given by your state government. SRECs can be sold to your utility company or another buyer, and this is usually considered part of your taxable income.
Federal Solar Incentives
Federal incentives are the kind of incentives that you are most likely to have some knowledge of. 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 specific percentage of the cost of your solar system.
The ITC initially applied to 30% of the total cost of installing solar panels, and has fluctuated slightly over the years between 26-30%. The installation date of your solar system will determine what percentage you qualify for. The total installation cost includes the panels themselves as well as the cost of labor, equipment and accessories. There is no maximum amount you can claim. The ITC applies to solar systems installed after January 1, 2006 on your primary or secondary residence. The residence must be in the United States and owned by you.
To more fully understand how the ITC might apply to you, speak to your local Bethlehem solar panel installer and request more information.
In August 2022, the ITC (now called the Clean Energy Credit) was bolstered by the passing of the Inflation Reduction Act. The Clean Energy Credit bolsters the current credit, increasing it up to 30% for solar systems installed between 2022 and 2032. At this point, the credit percentage will be reduced slightly each year until the end of the program in 2035. The expansion to the program also makes it easier to get credit for energy storage systems, starting in 2023.
More information about the new Inflation Reduction Act can be found here. Your local Bethlehem 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 might be provided at multiple levels. On top of federal solar incentives, there are often state and local ones, too. These incentives — which might be provided by your county or municipality, or by the state of Pennsylvania — may be offered for only a limited time, or on an ongoing basis.
Next Steps for Installing Solar in Bethlehem
Nationwide solar energy use has increased enormously in the last 15 years, in part thanks to the increase in availability of solar incentives. You might receive these incentives from your local utility company, the federal government or the Pennsylvania government. Talking to your local Bethlehem solar panel installer is an excellent first step towards getting all the incentives you qualify for when you switch to solar energy.
EcoWatch's Bethlehem, PA Solar Incentives FAQs
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