2023 Solar Incentives Guide for Drexel Hill, PA - Tax Credits & Rebates
In this guide, we'll cover the latest solar incentives and rebates available in Drexel Hill.
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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Updated May 04, 2023
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What Solar Tax Credits, Incentives, and Rebates are Available in Drexel Hill?
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 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. You might qualify for several kinds of incentives, such as discounts, cash back or credit towards your monthly utility bill, depending on your situation. Certain incentives come from your specific utility company, county or municipality, some from the Pennsylvania government and others from the federal government. Types of solar incentives might include:
- Rebates: Solar rebates can be offered by your local utility company, or by your county or state. These rebates are essentially cash back that is applied after you purchase solar panels and before tax credits are calculated.
- Net Metering: Net metering is an incentive you can get once your solar system is up and running. If you've signed a net metering agreement with your Drexel Hill utility company, the company will subtract the value of the excess energy your solar system produces from your utility bill each month. In some areas, this credit is dollar-for-dollar, while in other areas you might receive a refund equivalent to a percentage of the value.
- Tax Credits: Different from tax deductions, tax credits reduce, dollar-for-dollar, the amount of income tax that you owe the government.
- Solar Renewable Energy Certificate (SREC): SRECs and other performance-based incentives are normally handled at the state level. Once your solar panel system meets a certain threshold (generally a small amount of energy production), you can receive SRECs that can then be sold to your utility company or other buyers. The money you make from the sale is usually considered part of your taxable income.
- Tax Exemptions: These may come in the form of property tax exemptions, which can let you exclude the value of your solar system when paying property tax on your home. They may also include exemptions on sales tax at the time of purchase.
Federal Solar Incentives
Federal solar incentives are probably the first thing that comes to mind when you think about solar incentives. A federal incentive that most people are likely to be familiar with is the Federal Solar Investment Tax Credit (ITC). The ITC is a tax credit for a given 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. Initially, the credit applied to 30% of the total cost — for panels, accessories, labor and equipment — although it may range from 26-30%, depending on when your solar project was undertaken. There is no cap on the amount you can claim.
Reaching out to your local Drexel Hill solar panel installation expert is the best way to understand how the ITC applies to your situation.
In August 2022, the Inflation Reduction Act laid out new provisions for the ITC, now called the Clean Energy Credit. The Clean Energy Credit re-raises the credit up to 30% for solar systems installed between 2022 and 2032. After 2032, the credit percentage will be reduced slightly each year until the end of the program in 2035. Beginning in 2023, it will also be easier to claim credits for energy storage systems under the new laws.
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 Drexel Hill solar installation expert.
State & Local Solar Incentives
Tax credits, rebates and more can be provided at multiple levels. In addition to federal solar incentives, there are often state and local ones as well. Certain incentives are offered for only a limited time, while others are ongoing. These local incentives might come from the Pennsylvania government, or from your specific county or municipality.
Next Steps for Installing Solar in Drexel Hill
Solar incentives can be offered by your local utility company, the federal government or the Pennsylvania government. The variety of available solar incentives has contributed to a large increase in solar energy use in the last 15 years. When you're ready to make the switch to solar energy, calling your local Drexel Hill solar panel installation expert is a great first step.
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EcoWatch's Drexel Hill, PA Solar Incentives FAQs
What are the top solar panel installation companies near me?
To find a top-rated solar panel installer, check out our guide to Drexel Hill's best solar panel companies.
How long until the federal solar tax credit ends?
The Clean Energy Credit (previously referred to as the federal solar tax credit, or ITC), currently ends on January 1, 2035. Currently set at 30%, the credit will drop to 26% in 2033 and to 22% in 2034.
I want to change out my appliances for ones that are more energy-efficient. Are there any benefits I can claim?
Under the new Inflation Reduction Act, there are a number of new financial incentives for making eco-friendly improvements to your home. More details regarding these incentives, including information about incentives for purchasing new appliances, can be found here.
Can I receive incentives both towards the initial cost of solar panels, and later as reimbursement?
Yes, you can receive 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 speak with your solar installer or a local tax professional to ensure that you are claiming the correct incentives and getting the most money possible.
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.