2023 Solar Incentives Guide for Ephrata, PA - Tax Credits & Rebates
In this guide, we'll cover the latest solar incentives and rebates available in Ephrata.
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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By EcoWatch Local Advisors
Data Analysis: James Savino
Ranking Methodology: Karsten Neumeister
Updated March 14, 2023
Why you can trust EcoWatch
What Solar Tax Credits, Incentives, and Rebates are Available in Ephrata?
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 phrase "solar incentives" broadly refers to financial incentives put in place by solar companies and the government to encourage the use of renewable energy by making the installation and use of solar panels more affordable. Incentives might include things like discounts, cash back or monthly utility bill credits. Some incentives are handled federally, while others are provided by the state of Pennsylvania or your specific utility company, county or municipality. Types of solar incentives might include:
- Solar Renewable Energy Certificate (SREC): In most cases, solar systems that produce more than a predetermined (generally small) amount of electricity qualify for SRECs or similar performance-based incentives. SRECs and similar incentives are typically given by your state government. When you receive an SREC, you can sell it to your utility company or another buyer, and this is usually considered part of your taxable income.
- Rebates: Solar rebates may be provided by your county or state, or by your local utility company. These rebates work as cash back that is applied after your purchase of a solar system and before tax credits are calculated.
- Net Metering: Net metering factors in after your solar panels are up and running. If you have in place a net metering agreement with your Ephrata utility company, it will subtract the value of the excess energy your solar system produces from your monthly utility bill. In some areas, this is a dollar-for-dollar credit, while in other places you might receive a refund equivalent to a percentage of the value.
- Tax Credits: Tax credits reduce, dollar-for-dollar, the total amount of tax you owe the government. Tax credits differ from tax deductions.
- Tax Exemptions: These might come in the form of property tax exemptions, which let you exclude the value added by your solar panels when paying property tax on your house. You could also look for exemptions on sales tax at the time of purchase.
Federal Solar Incentives
Federal incentives are the kind of incentives that you are most likely to have some familiarity with. You might have heard of the Federal Solar Investment Tax Credit, or ITC. This is a tax credit that reduces your taxes by a specified percentage of the money you spend installing solar panels.
The ITC was originally for 30% of the total cost of solar system installation, although that number has fluctuated slightly over the last few years between 26-30%. The installation date of your solar system will determine what percentage you qualify for. The total installation cost includes the panels themselves as well as the cost of equipment, labor and accessories. There is no maximum amount you can claim. The ITC can be applied to solar panels installed after January 1, 2006 on your primary or secondary residence. The residence must be owned by you and in the United States.
To best understand how the ITC might apply to your situation, get in touch with your local Ephrata solar panel installation expert and ask for more information.
The Inflation Reduction Act, passed in August 2022, expanded and extended the ITC (as well as retitling it the Clean Energy Credit). The Clean Energy Credit has increased the current credit up to 30% for solar systems installed between 2022 and 2032. After 2032, the percentage will decrease slightly each year until the program expires in 2035. Starting in 2023, the program expansion will also make it easier to get credit for energy storage systems.
More information about the new Inflation Reduction Act can be found here. Your local Ephrata solar panel installation experts can answer any questions you have and explain how the new Clean Energy Credit may apply to you.
State & Local Solar Incentives
Some solar incentives are often also provided by state and local governments. Similar to federal incentives, these can include rebates, tax credits and more. Some incentives are ongoing, while others might only be available for a limited time. These incentives may be provided by your county or municipality, or by the Pennsylvania government.
Next Steps for Installing Solar in Ephrata
Solar incentives can come from your local utility company, the federal government or the Pennsylvania government. The large number of solar incentives available has contributed to a large increase in solar energy use in the last 15 years. Your local Ephrata solar panel installation expert can provide you with more details about which incentives you can apply for, and get you on track to switch to renewable energy today.
Best Regional Coverage
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EcoWatch's Ephrata, 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, and most secondary residences will fall under this distinction. Other solar incentives may be available for commercial properties, depending on the details. We recommend talking to your local solar installer and/or tax professional to better understand what incentives will apply to your specific situation.
If I already have a solar system installed on my house, can I still claim incentives?
You should plan to talk to someone from the company that installed your solar panels — or reach out to a local Ephrata solar installer — to clarify which incentives you may qualify for. If your system was installed after January 1, 2022, you likely qualify for the newly 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 the best solar panel installation companies near me?
To find the best solar panel installer in your area, check out our guide to Ephrata's top solar panel companies.
When does the federal solar tax credit end?
The Clean Energy Credit (formerly named the federal solar tax credit, or the ITC), currently ends on January 1, 2035. Currently set at 30%, the credit will drop to 26% in 2033 and to 22% in 2034.
Can I use solar and another type of renewable energy in combination to power my home?
Yes, you can employ multiple types of renewable energy to power your home, such as a combination of solar and wind power. You can also use both renewable energy sources and a backup source of non-renewable energy. You should discuss your proposed plan with your local Ephrata solar installation expert, to make sure you know what you'll need and what kinds of incentives you might or might not qualify for.
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.