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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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
The term "solar incentives" refers to financial incentives that are in place to encourage increased use of renewable energy by making installing and using solar panels more affordable. Incentives can include things like discounts, cash back or credit on your utility bill each month. Some incentives are offered federally, while others are offered by the Pennsylvania government or your specific utility company, county or municipality. Some broad categories of solar incentives include:
- Rebates: Solar rebates might be offered by your county or state, or by your local utility company. These rebates work as partial refunds that are applied after you purchase solar panels and before tax credits are calculated.
- Net Metering: Net metering becomes relevant 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 produced by your solar system from your monthly utility bill. In some locations, this credit is dollar-for-dollar, while in other areas you may make back a percentage of the value.
- Tax Exemptions: Sales tax exemptions are effective at the time of purchase for your solar panels. Property tax exemptions allow you to exclude the added value of your solar system when you calculate how much property tax you need to pay on your home.
- Solar Renewable Energy Certificate (SREC): SRECs and other performance-based incentives are typically handled at the state level. Once your solar panel system meets a predetermined threshold (normally a small amount of energy production), you are eligible to receive SRECs that can then be sold to your utility company or other buyers. The money you make is usually considered part of your taxable income.
- Tax Credits: Different from tax deductions, tax credits are dollar-for-dollar reductions in the amount of income tax that you owe the federal government.
Federal Solar Incentives
When thinking about solar incentives, you likely think of federal incentives first. The solar incentive that you're most familiar with is probably the Federal Solar Investment Tax Credit (ITC), which gives you a credit on your taxes equal to a predetermined percentage of the cost of your solar system.
The ITC can be applied 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 that you own and that is located in the United States. 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.
Speaking with your local Drexel Hill solar panel installation expert is the best way to learn more about how the ITC could apply to you.
The Inflation Reduction Act, passed in August 2022, expanded and extended the ITC (as well as renaming it to the Clean Energy Credit). For solar system installations that begin after January 1, 2022 and are completed by the end of 2032, homeowners can receive a credit equal to 30% of the total cost. After 2033, the percentage will decrease annually until the Clean Energy Credit ends in 2035. The expansion to the program also makes claiming credit for energy storage systems easier than ever before, beginning in 2023.
Click here to learn more about the new Inflation Reduction Act. To understand how the new Clean Energy Credit might apply to you, speak with your local Drexel Hill solar installation company.
State & Local Solar Incentives
In addition to those provided at the federal level, there are often also state solar incentives. Rebates, tax credits and more might be available at a more local level. Certain incentives are ongoing, while others are available for a limited time. Incentives might be provided by your county or municipality, or by the Pennsylvania government.
Next Steps for Installing Solar in Drexel Hill
There are a number of different solar incentives: those given by local utility companies, those given by the Pennsylvania government and those given by the federal government, to name a few. Solar energy utilization has increased enormously in the last 15 years, partially thanks to these incentives. Reaching out to your local Drexel Hill solar panel installer is a great first step towards making sure you get all the incentives you qualify for when you switch to solar energy.
EcoWatch's Drexel Hill, PA Solar Incentives FAQs
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