2023 Solar Incentives Guide for Downingtown, PA - Tax Credits & Rebates
In this guide, we'll cover the latest solar incentives and rebates available in Downingtown.
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 Downingtown?
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 homeowners to switch their home over to renewable energy by providing financial incentives meant to lower the burden of solar panel installation and use. These incentives could include cash back, upfront discounts or monthly credits towards your utility bill. Some incentives are offered by the federal government, some by the state of Pennsylvania and some by your specific utility company, county or municipality. Some solar incentives you might qualify for are:
- Net Metering: You can sign a net metering contract with your Downingtown utility company. This agreement may apply to all or a percentage of the excess electricity that is generated by your solar panels. They will then deduct this value from your monthly utility bill.
- Tax Exemptions: Sales tax exemptions go into effect at the point of sale for your solar system. Property tax exemptions allow you to exclude the value that your solar panels add when calculating the amount of property tax you need to pay on your home.
- Rebates: Your solar installer might help you claim a rebate, or partial refund after purchase, for your solar system. States or counties will also offer limited-time rebates at various times. If you receive a rebate, that amount will usually come off the total price before tax credits are calculated.
- Solar Renewable Energy Certificate (SREC): SRECs and similar performance-based incentives are usually handled by your state government. Once your solar panel system meets a certain threshold (typically a small amount of energy production), you are eligible to receive SRECs that can be sold to your utility company or other buyers. The money you make from the sale is generally considered part of your taxable income.
- Tax Credits: Tax credits are dollar-for-dollar reductions (not deductions) in the amount of tax that you owe the federal government.
Federal Solar Incentives
When you hear the term "solar incentives," federal incentives might be the first thing that comes to mind. The Federal Solar Investment Tax Credit, or ITC, is probably the best-known federal solar incentive. The ITC allows you to claim a tax credit for a set percentage of your solar system's cost.
The ITC can be applied to the total cost of installing a solar system, including the panels themselves as well as labor, equipment 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. From its original value of 30% of the total cost, the credit has fluctuated slightly between 26-30%, and you may qualify for varying percentages depending on when your project was completed. There is no maximum claim amount.
Talking to your local Downingtown solar panel installation expert is the best way to understand how the ITC applies to you.
The ITC has been renewed and expanded following the passage of the Inflation Reduction Act in August 2022. It's also now called the Clean Energy Credit. The Clean Energy Credit bolsters the current credit, increasing it up to 30% for solar installations undertaken between January 1, 2022 and December 31, 2032. At this point, the credit percentage will be reduced slightly each year until the program expires in 2035. Starting in 2023, it will also be easier to qualify for credits for energy storage systems under the new laws.
Click here to learn more about the new Inflation Reduction Act. To better understand how the new Clean Energy Credit will apply to you, speak with your local Downingtown solar installers.
State & Local Solar Incentives
Rebates, tax credits and more can be claimed at multiple levels. In addition to federal solar incentives, there are often state and local ones, too. Certain incentives are ongoing, while others might only be available for a limited time. Solar incentives might be provided by your county or municipality, or by the Pennsylvania government.
Next Steps for Installing Solar in Downingtown
You can qualify for solar incentives from the federal government and the Pennsylvania government, as well as from your local utility company. This increase in availability of solar initiatives over the last 15 years has helped increase nationwide solar energy use enormously. When you're ready to make the change to solar energy, reaching out to your local Downingtown solar panel installation expert is a great first step.
EcoWatch's Downingtown, PA Solar Incentives FAQs
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