2025 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 2024 and beyond)
- Ways to optimize your solar investment
Solar installers are experts in maximizing your solar tax credits and rebates.
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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 term "solar incentives" broadly refers to financial incentives designed to encourage the use of renewable energy by making solar panels more affordable. Solar incentives might 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 utility company, county or municipality. Some broad categories of solar incentives include:
- Solar Renewable Energy Certificate (SREC): SRECs and other similar performance-based incentives are normally handled by your state government. Once your solar panel system meets the threshold (normally a small amount of energy production), you can receive SRECs that can be sold to your utility company or other buyers. The money you receive 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 ignore the value added by your solar panels when paying property tax on your home. They may also include exemptions on sales tax at the time of purchase.
- Tax Credits: Tax credits decrease, dollar-for-dollar, how much income tax you owe the government. These are different from tax deductions.
- Net Metering: Net metering factors in after your solar panels are 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 monthly utility bill. In some locations, this is a dollar-for-dollar credit, while in others you might get refunded a percentage of the value.
- Rebates: A rebate is a partial refund after the purchase of your solar system. Rebates might be offered by your local utility company, your state or your county. The rebates are usually applied before calculating tax credits.
Federal Solar Incentives
When thinking 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 gives you a credit on your taxes equal to a certain percentage of your solar system's cost.
The ITC can be credited towards the value of solar panels installed on your primary or secondary residence in the United States. The solar system has to have been installed on a property you own after January 1, 2006, for you to claim the credit. Originally, the ITC covered 30% of all costs (panels, labor, accessories and equipment), although the total amount has fluctuated slightly over time between 26-30%. The installation date of your solar system will determine what percentage you are eligible for. There is no cap on the claim amount.
To best understand how the ITC may apply to you, call your local Drexel Hill solar panel installer and ask for more information.
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. For solar system installations that begin after January 1, 2022, and are completed by the end of 2032, homeowners can apply for a credit for 30% of the total cost. This percentage will decrease annually after 2032 until the Clean Energy Credit ends in 2035. The expansion also makes it easier to get credit for energy storage systems, beginning in 2023.
Click here to learn more about the new Inflation Reduction Act. Your local Drexel Hill solar panel installers are the best people to answer your questions regarding the new Clean Energy Credit and how it may apply to you.
State & Local Solar Incentives
Federal solar incentives are not your only option; rebates, tax credits and more are often offered at the local or state level. Incentives might be offered by the state of Pennsylvania, or by your county or municipality. Some incentives are available for only a limited time, while others are ongoing.
Next Steps for Installing Solar in Drexel Hill
Solar energy use nationwide has gone up tremendously in the last 15 years, in part thanks to the growth in the number of solar incentives. You might receive these incentives from your local utility company, the Pennsylvania government or the federal government. Reach out to your local solar panel installation company today to discover more about the various programs and to save the most money possible on solar panels for your Drexel Hill home.
EcoWatch's Drexel Hill, PA Solar Incentives FAQs
How can I find out if I qualify for solar incentives?
Broadly, solar incentives apply to:
- a new solar system
- installed on property that you own
- within the U.S.
- within the date range specified by a particular incentive.
Specific incentives, including ones handled by the Pennsylvania government or by your county/municipality, might have additional qualifications. Talk to your local Drexel Hill solar installer to find out what incentives your project may qualify for.
I already have solar panels. Are there any incentives that I qualify for?
An excellent idea would be to talk to a representative from the company that installed your solar system – or get in touch with a local Drexel Hill solar installer — to clarify which incentives you may qualify for. If your solar panels were installed after January 1, 2022, you likely qualify for the recently increased 30% tax credit under the Inflation Reduction Act. Systems installed between 2006 and 2021 may qualify for a tax credit of 26-30%.
What are the environmental benefits of switching to solar energy?
You can lower your carbon footprint by 300 pounds of CO2 annually when you install solar panels. This adds up to roughly 5,000 pounds over 20 years. Solar is also a renewable energy source, which means that making the switch reduces the drain on our planet's resources.
How long until the federal solar tax credit ends?
The federal solar tax credit, previously called the ITC and now named the Clean Energy Credit, is scheduled to end January 1, 2035. The current 30% credit will end in 2032, replaced by a 26% credit in 2033 and a 22% credit in 2034.
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, such as a combination of geothermal and solar. You can also use both renewable energy sources and a backup source of non-renewable energy. Be sure to discuss your proposed plan with your local Drexel Hill solar panel installer, so that you understand what you'll need and what incentives you might or might not qualify for.
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