2023 Solar Incentives Guide for Columbia, PA - Tax Credits & Rebates
In this guide, we'll cover the latest solar incentives and rebates available in Columbia.
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 Columbia?
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
Solar incentives are meant to encourage people to switch to renewable energy by providing financial incentives that lower the burden of solar panel installation and use. The incentives may include upfront discounts, cash back or credit towards your monthly utility bill. Some incentives are given by the federal government, some by the state of Pennsylvania and some by your specific utility company, county or municipality. Types of solar incentives might include:
- Tax Credits: Tax credits decrease, dollar-for-dollar, how much income tax you owe the government. These are different from tax deductions.
- Tax Exemptions: Your solar system may qualify for both sales tax and property tax exemptions. Sales tax exemptions are effective at the time of purchase. Property tax exemptions allow you to exclude the added value of the solar panels when you are calculating property taxes on your house.
- Solar Renewable Energy Certificate (SREC): SRECs are credits that can be sold to your utility company (or other buyers) for cash that typically becomes part of your taxable income. In most cases, you must meet a certain (small) threshold of energy production before your solar system is eligible for SRECs or similar performance-based incentives. SRECs and similar incentives are typically handled at the state level.
- Net Metering: Net metering becomes relevant once your solar panels are up and running. If you've signed a net metering agreement with your Columbia utility company, the company will subtract the value of the excess energy your solar system produces from your utility bill each month. In some locations, this is a dollar-for-dollar credit, while in other places you may be refunded a percentage of the value.
- Rebates: A solar rebate is a partial refund credited to your account after you've paid for your solar panels. Rebates may 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 tax credits are calculated.
Federal Solar Incentives
When you think about solar incentives, you likely think of federal incentives first. The solar incentive that you're most likely to have heard of is the Federal Solar Investment Tax Credit (ITC), which provides a credit on your taxes equal to a certain percentage of the cost of your solar system.
The ITC applies to solar panels installed after January 1, 2006 on a primary or secondary residence in the United States that you own. Originally, the tax credit was for 30% of the total cost — for panels, equipment, accessories and labor — although that amount may range from 26-30%, depending on when your solar project was undertaken. There is no cap on the claim amount.
To better understand how the ITC could apply to you, speak to your local Columbia solar panel installation expert and request more information.
The Inflation Reduction Act, passed in August 2022, expanded and extended the ITC (as well as retitling it the Clean Energy Credit). The new Clean Energy Credit extends until 2035. Homeowners 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 new credit will then see a slight annual decrease until its expiration. Starting in 2023, the program expansion will also make it easier to get credit for energy storage systems.
More information about the new Inflation Reduction Act can be found here. To fully understand how the new Clean Energy Credit applies to you, speak with your local Columbia solar installers.
State & Local Solar Incentives
Some solar incentives are often also provided at the state and local level. Like with federal incentives, these may include tax credits, rebates and more. Some incentives are ongoing, while others are only available for a limited time. These incentives might be given by your county or municipality, or by the Pennsylvania government.
Next Steps for Installing Solar in Columbia
Solar energy use nationwide has significantly increased in the last 15 years, in part thanks to the proliferation of solar incentives. You can obtain these incentives from your local utility company, the federal government or the Pennsylvania government. Reach out to your local solar panel installation company today to learn more and to save the most money possible on solar panels for your Columbia home.
EcoWatch's Columbia, PA Solar Incentives FAQs
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