2025 Solar Incentives Guide for Cheltenham, PA - Tax Credits & Rebates
In this guide, we'll cover the latest solar incentives and rebates available in Cheltenham.
You'll learn about:
- Local & State Solar Incentives
- Federal Tax Credits (Updated for 2024 and beyond)
- Ways to optimize your solar investment
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What Solar Tax Credits, Incentives, and Rebates are Available in Cheltenham?
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/
The phrase "solar incentives" refers to financial incentives that are in place to encourage the use of renewable energy by making solar panels more affordable. Different kinds of incentives, such as discounts, cash back or credit towards your monthly utility bill, may be available to you. Certain incentives may be offered by the state of Pennsylvania, by your utility company or by county or municipality, while others are federal. Categories of solar incentives include:
- Solar Renewable Energy Certificate (SREC): SRECs can be sold to your utility company (or other buyers) for cash that typically becomes part of your taxable income. In most cases, a certain (small) threshold of energy production must be met before your solar system can earn SRECs or similar performance-based incentives. SRECs and similar incentives are typically handled by your state government.
- Rebates: Rebates, or cash back after a purchase, are usually given prior to any solar tax credits being calculated. These rebates may be provided by your local utility company, by your county or by your state.
- Tax Credits: Tax credits are dollar-for-dollar reductions that lower the amount of income tax you owe the government. (This is different from a tax deduction.)
- Tax Exemptions: Tax exemptions can come in one of two forms. First, there is sales tax exemption, which is applied when you purchase solar panels. The second is property tax exemption, which allows you to exclude the value added by your solar system when paying property tax on your home.
- Net Metering: You can sign a net metering agreement with your Cheltenham utility company that will apply to all or a percentage of the excess electricity that is generated by your solar panels. They will then subtract this value from your utility bill each month.
Federal Solar Incentives
When people think of solar incentives, federal incentives might be the first thing that comes to mind. A federal incentive many people are likely to be familiar with is the Federal Solar Investment Tax Credit (ITC). The ITC is a tax credit for a specified percentage of the cost of your solar system.
The ITC was originally for 30% of the total cost of installing solar panels, and has fluctuated slightly over the last few 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 can be applied to solar systems installed after January 1, 2006, on your primary or secondary residence. The residence must be owned by you and in the United States.
To best understand how the ITC may apply to you, get in touch with your local Cheltenham solar panel installation expert and ask for more information.
The Inflation Reduction Act, passed in August 2022, added more provisions to the ITC (as well as renaming it to the Clean Energy Credit). The new Clean Energy Credit is valid until 2035. You can now apply for a 30% credit for solar systems that began installation after January 1, 2022, and are completed by the end of 2032. This credit will then see a slight annual decrease until its expiration. Starting in 2023, it will also be easier to obtain credits for energy storage systems under this new program.
More information about the new Inflation Reduction Act can be found here. To better understand how the new Clean Energy Credit applies to you, talk to your local Cheltenham solar installation expert.
State & Local Solar Incentives
In addition to federal solar incentives, there are often also state ones. Tax credits, rebates and more might be available at a more local level. Some incentives are ongoing, while others are available for a limited time. Solar incentives may be offered by the Pennsylvania government, or by your county or municipality.
Next Steps for Installing Solar in Cheltenham
You can receive solar incentives from the federal government and the Pennsylvania government, as well as from your local utility company. Growing availability of solar initiatives in the past 15 years has helped increase nationwide solar energy use enormously. Your local Cheltenham solar panel installer can provide you with more details about which incentives you might qualify for, and get you started on the path to switching to renewable energy today.
EcoWatch's Cheltenham, PA Solar Incentives FAQs
How do I learn if I qualify for different solar incentives?
It's a smart idea to get in touch with your local Cheltenham solar installer to get an understanding of which incentives your project will qualify for. Generally, solar incentives apply to new solar panel systems installed on property you own (in the U.S.) between the dates specified by the incentive. Some incentives, like those provided at the level of the Pennsylvania government, may have additional requirements.
I already have solar panels installed. Do I qualify for any incentives?
An excellent idea would be to talk to someone from the company that installed your solar panels – or speak to a local Cheltenham solar installer — to better understand which incentives you may qualify for. If your solar panels were installed after January 1, 2022, you likely qualify for the recently increased 30% tax credit under the Inflation Reduction Act. Solar systems installed between 2006 and 2021 may qualify for a tax credit of 26-30%.
When does the federal solar tax credit end?
The federal solar tax credit, formerly known as the ITC and now titled the Clean Energy Credit, is scheduled to end January 1, 2035. The current 30% credit will end in 2032, replaced by a 26% credit in 2033 and a 22% credit in 2034.
Can I claim incentives both towards the up-front cost of solar panels, and later as reimbursement?
The order in which incentives are applied may vary depending on which incentives you receive but generally yes, you can claim multiple types of incentives for your solar project. Speak to your solar installer or a local tax professional to verify you are claiming all the incentives you qualify for and applying them in the correct order.
Can I get any financial incentives when I add solar panels to a rental property, vacation home or commercial property?
While we recommend speaking with your local solar installer and/or tax professional to best understand what solar incentives apply to you, many incentives will apply to a second home, so long as that home is in the United States and owned by you. There may be additional incentives available specifically for commercial properties, depending on the details.
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