2023 Solar Incentives Guide for Birmingham, PA - Tax Credits & Rebates
In this guide, we'll cover the latest solar incentives and rebates available in Birmingham.
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 Birmingham?
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 term "solar incentives" refers to a wide range of financial incentives implemented to make installing and using solar panels more affordable. This is done to encourage people to switch to renewable energy. Incentives might include things like discounts, cash back or credit towards your monthly utility bill. Some incentives are offered by the federal government, while others are provided by the state of Pennsylvania or your specific utility company, county or municipality. Types of solar incentives might include:
- Tax Exemptions: Sales tax exemptions go into effect at the time of purchase for your solar panels. Property tax exemptions let you exclude the value added by your solar system when you calculate the amount of property tax you need to pay on your house.
- 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.
- Net Metering: You may be able to sign a net metering contract with your Birmingham utility company, that may apply to all or a percentage of the excess electricity your solar panels generate. Your utility company will then deduct this value from your utility bill each month.
- Solar Renewable Energy Certificate (SREC): SRECs are credits that can be sold to your utility company (or other buyers) for cash that normally counts as part of your taxable income. Typically, there is a small threshold of energy production to meet before your solar system is eligible for SRECs or other performance-based incentives. These kinds of incentives are generally handled by your state government.
- Tax Credits: Unlike tax deductions, tax credits are dollar-for-dollar reductions in the amount of income tax that you owe the government.
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 likely the best-known federal solar incentive. The ITC provides a tax credit for a set percentage of your solar system's cost.
The ITC applies to solar panels installed after January 1, 2006 on a primary or secondary residence that you own in the United States. The credit initially covered 30% of the total cost — for panels, labor, equipment and accessories — although it may range from 26-30%, depending on when your solar system was installed. There is no cap on the claim amount.
Your local Birmingham solar panel installer can offer more information about the ITC and how it may apply to your situation.
In August 2022, the ITC (now called the Clean Energy Credit) was bolstered by the passage of the Inflation Reduction Act. Now, solar installation projects started after January 1, 2022 and completed by the end of 2032 can qualify for a 30% tax credit. The amount of the credit will then decrease slightly each year until the end of the current Clean Energy Credit in 2035. Starting in 2023, it will also be easier to obtain credits for energy storage systems under this new program.
Click here to learn more about the new Inflation Reduction Act. Your local Birmingham solar panel installer can answer any questions you have and explain how the new Clean Energy Credit will apply to you.
State & Local Solar Incentives
Some solar incentives are often also provided by state and local governments. Similar to federal incentives, these can include tax credits, rebates and more. The incentives — which may be given by the state of Pennsylvania, or by your county or municipality — might be offered for only a limited time, or on an ongoing basis.
Next Steps for Installing Solar in Birmingham
There are many kinds of solar incentives: those offered by the federal government, those offered by the Pennsylvania government and those offered by local utility companies, to name a few. Solar energy utilization has grown enormously in the last 15 years, thanks to these incentives. Your local Birmingham solar panel installation company can help you learn more about which incentives you can apply for, and get you started on the path to switching to renewable energy today.
EcoWatch's Birmingham, PA Solar Incentives FAQs
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