2025 Solar Incentives Guide for Chester, PA - Tax Credits & Rebates
In this guide, we'll cover the latest solar incentives and rebates available in Chester.
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 Chester?
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 term "solar incentives" covers a 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. Various kinds of incentives, like cash back, discounts or monthly utility bill credits, might be available to you. Some incentives may be provided via the Pennsylvania government, by your utility company or by county or municipality, while others are federal. Types of solar incentives might include:
- 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 (usually small) amount of electricity. These types of incentives are normally handled by the state government. You can sell any SRECs you have to your utility company or other buyers, and the money you make is normally considered part of your taxable income.
- Net Metering: Be sure to talk to your Chester utility company about signing a net metering contract. This allows you to get a credit towards your utility bill every month for the value of excess energy generated by your solar panels. You might receive either a dollar-for-dollar credit or a percentage of the value.
- Rebates: Rebates, or partial refunds after a purchase, are typically given prior to any solar tax credits being calculated. Solar rebates may be offered by your local utility company, by your county or by your state.
- Tax Exemptions: Sales tax exemptions are effective at the time of purchase for your solar panels. Property tax exemptions allow you to exclude the value that your solar panels add when you're calculating how much property tax you need to pay.
- 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.)
Federal Solar Incentives
Federal incentives are the kind of incentives that you are most likely to have some familiarity with. You may have heard of the Federal Solar Investment Tax Credit, or ITC. This incentive is a tax credit equal to a specified percentage of the money you spend on solar panels for your home.
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 and that is located in the United States. The tax credit ranges from 26-30% of total costs 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, talk to your local Chester solar panel installer.
The Inflation Reduction Act, passed in August 2022, expanded and extended the ITC (as well as renaming it to the Clean Energy Credit). Homeowners can now receive a credit equal to 30% of the total solar system installation costs for projects started after January 1, 2022, and completed before the end of 2032. This percentage will then decrease yearly until the Clean Energy Credit expires in 2035. The expansion also makes credits for energy storage systems even easier to claim, starting in 2023.
More information about the new Inflation Reduction Act can be found here. Your local Chester solar panel company is the best resource for answering your questions regarding the new Clean Energy Credit and how it will apply to you.
State & Local Solar Incentives
Some solar incentives are often also offered at the local or state level. As with federal incentives, these could include tax credits, rebates and more. These incentives may be offered by the Pennsylvania government, or by your county or municipality. Certain incentives are available for a limited time, while others are ongoing.
Next Steps for Installing Solar in Chester
Solar incentives may come from your local utility company, the Pennsylvania government or the federal government. The variety of available solar incentives has contributed to a large increase in solar energy use in the last 15 years. Your local Chester solar panel installation company can give you more information about which incentives you should apply for, and get you on track to switch to renewable energy today.
EcoWatch's Chester, PA Solar Incentives FAQs
Who installs solar panels near me?
To find the best solar panel installation companies near you, take a look at our article on the best solar companies in Chester.
If I change out my appliances for ones that can utilize solar energy, are there incentives I can claim?
The recently passed Inflation Reduction Act includes provisions for multiple incentives that reward homeowners for making eco-friendly upgrades. Some of these incentives include tax credits and rebates for installing new electric appliances. You can find more details about these incentives here.
Can I receive 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 are eligible for but in most cases yes, you can receive multiple types of incentives for your solar project. Check with your solar installer or a local tax professional to confirm you are claiming all the incentives you qualify for and applying them in the correct order.
Can I use a combination of solar and another type of renewable energy to power my home?
Yes, you can utilize multiple types of renewable energy to power your home — for example, a combination of wind and solar. You can also use both renewable energy sources and a non-renewable backup source of energy. You should discuss your plan with your local Chester solar installation expert, so that you understand what you'll need and what kinds of incentives you may or may not qualify for.
Can I get any financial incentives when I add solar panels to a vacation home, rental property or commercial property?
Many solar incentives are intended to apply to a property located within the United States that you own; most secondary residences fall under this distinction. Other solar incentives may be available for commercial properties, depending on the details. We recommend talking to your local solar installer and/or tax professional to better understand what incentives apply to your specific situation.
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