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
Solar installers are experts in maximizing your solar tax credits and rebates.
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Updated March 14, 2023
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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
Source: https://www.dsireusa.org/
The phrase "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. These incentives can include upfront discounts, cash back or monthly credits towards your utility bill. Some incentives are handled by the federal government, some by the Pennsylvania government and some by your utility company, county or municipality. Some broad categories of solar incentives include:
- Tax Exemptions: These can come in the form of property tax exemptions, which can let you ignore the value added by your solar panels when calculating the taxes you pay on your home. They may also include exemptions on sales tax at the time of purchase.
- Net Metering: Don't forget to talk with your Downingtown utility company about signing a net metering contract. This will allow you to receive credit towards your utility bill every month for the value of excess energy your solar panels generate. You could receive either a dollar-for-dollar credit or a percentage of the value.
- Solar Renewable Energy Certificate (SREC): SRECs and other performance-based incentives are usually handled by your state government. Once your solar system meets a certain threshold (typically a small amount of energy production), you are eligible to receive SRECs that you can then sell to your utility company or other buyers. The money you receive from the sale is generally considered part of your taxable income.
- Rebates: Solar rebates might be provided by your state or county, or by your local utility company. These rebates are essentially partial refunds that are applied after you purchase a solar system and before tax credits are calculated.
- Tax Credits: Different from tax deductions, tax credits reduce, dollar-for-dollar, the amount of income tax that you owe the government.
Federal Solar Incentives
When you hear the term "solar incentives," federal incentives might be the first thing that comes to mind. One of the incentives that most people are likely to be familiar with is the Federal Solar Investment Tax Credit (ITC). This is a tax credit for a specified percentage of your solar system's cost.
The ITC applies to the total cost of solar panel installation, including the panels themselves as well as labor, accessories and equipment. This credit can be claimed for panels installed after January 1, 2006 on a primary or secondary residence located in the United States that you own. The tax credit ranges from 26-30% of total costs depending on when your project was completed. There is no maximum amount you can claim.
Your local Downingtown solar panel installer can give you more information about the ITC and how it applies to your situation.
The ITC was renewed and increased in scope after the passage of the Inflation Reduction Act in August 2022. It's also now called the Clean Energy Credit. The Clean Energy Credit is valid until 2035. Any solar installation project that is completed between January 1, 2022 and December 31, 2032 may qualify for a 30% tax credit. The amount will then decrease slightly each year until the current program ends. Starting in 2023, it will also be easier to get credits for energy storage systems with the new act.
Click here to learn more about the new Inflation Reduction Act. To best understand how the new Clean Energy Credit might apply to you, get in touch with your local Downingtown solar installers.
State & Local Solar Incentives
Tax credits, rebates and more might be provided at multiple levels. On top of federal solar incentives, there are often state and local ones as well. These incentives — which might be provided by the state of Pennsylvania, or by your county or municipality — may be offered on an ongoing basis, or for only a limited time.
Next Steps for Installing Solar in Downingtown
You can apply for solar incentives from the Pennsylvania government and the federal government, as well as from your local utility company. The growing availability of solar initiatives over the last 15 years has helped increase nationwide solar energy use enormously. Talking to your local Downingtown solar panel installer is an excellent first step towards getting all the incentives you qualify for when you switch to solar energy.
Best Regional Coverage
Momentum Solar
- Great warranty coverage
- Representatives are experts on local policies
- Concierge service ensures steady communication
- Slightly limited service offerings
Best Technology
Tesla Energy
- Price-match guarantee
- Sleek, efficient, and durable solar panels
- Best solar battery on the market
- Some reported issues with customer service
- Customer service varies by local dealer
EcoWatch's Downingtown, PA Solar Incentives FAQs
Can I get any financial incentives when I add solar panels to a rental property, vacation home 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 into this category. Other solar incentives may be available for commercial properties, depending on the specifics. We recommend getting in touch with your local solar installer and/or tax professional to fully understand what incentives apply to your specific situation.
How can I learn if I qualify for certain solar incentives?
It's a good idea to talk to your local Downingtown solar installer for a better understanding of which incentives your project may qualify for. Generally, solar incentives apply to new solar 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 other requirements.
If I installed solar panels on my house a few years ago, can I still claim incentives?
Your best bet is to talk to someone from the company that installed your solar panels — or get in touch with a local Downingtown solar installer — to clarify which incentives you may qualify for. If your system was 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%.
What are some environmental benefits of installing solar panels on my house?
You can lower your carbon footprint by 300 pounds of CO2 a year by switching to solar panels. This adds up to approximately 5,000 pounds in 20 years. Solar is also a renewable energy source, meaning that making the switch reduces the drain on our planet's resources.
Can I claim incentives both towards the up-front cost of solar panels, and later as reimbursement?
Yes, you can claim both tax credits and rebates towards the cost of solar panels. Depending on which incentives you are receiving, they may apply in a different order. Be sure to talk to your solar installer or a local tax professional to confirm that you are claiming incentives correctly and getting the most money you can.
Our goal is to reach as many people as we can with sensible solutions like solar energy. Our team of full-time local researchers collects solar price and installation data for every city in America then compiles it to create these digestible city guides. If you want to read our solar expert's opinion on the top solar companies featured here, follow this link.
Solar incentive research was conducted by Melissa Smith and Karsten Neumeister. Local data analysis was conducted by James Savino. See something we missed or could do better? Email the editor.