2023 Solar Incentives Guide for Erie, PA - Tax Credits & Rebates
In this guide, we'll cover the latest solar incentives and rebates available in Erie.
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 September 15, 2023
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What Solar Tax Credits, Incentives, and Rebates are Available in Erie?
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
First Energy (MetEdison, Penelec, Penn Power, West Penn Power) - Residential Solar Water Heating Program
FirstEnergy (MetEdison, Penelec, Penn Power, West Penn Power) - Residential Energy Efficiency Programs
Refrigerator: $75
Clothes Washer: $25- $50
Clothes Dryer: $50
Freezers: $25
Dehumidifiers: $25
Fridge/Freezer Recycling: $50
HVAC
HVAC tune up: $50
Furnace Fan Motor: $150
Ductless Minisplit AC : $200
Central AC: $100 - $200
Air Source Heat pump: $250 - $500
Geothermal Heat Pump: $600
Packaged Terminal AC: $75
Packaged Terminal Heat Pump: $150
Programmable Thermostat: $25
Others
Solar Water Heat: $500
Heat Pump Water Heater: $500
Home Energy Audit: $250
Lighting: Available as in-store discount in participating stores
Federal Residential Renewable Energy Tax Credit
Source: https://www.dsireusa.org/
The term "solar incentives" includes 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. Different types of incentives, such as cash back, discounts or monthly utility bill credits, may be available to you. Certain incentives may be handled by the Pennsylvania government, by your utility company or by county or municipality, while others are federal. You might qualify for any of the following types of solar incentives:
- Solar Renewable Energy Certificate (SREC): SRECs and similar other performance-based incentives may be available to you if your solar system produces over a specified (generally small) amount of electricity. This category of incentives is generally handled at the state level. You can sell SRECs to your utility company or other buyers, and the money you receive in return is generally considered part of your taxable income.
- Net Metering: You may be able to sign a net metering agreement with your Erie utility company, that may apply to all or a percentage of the excess electricity your solar panels generate. Your utility company will then subtract this value from your monthly utility bill.
- Rebates: Your solar installer might help you claim a rebate, or partial refund of your purchase, for your solar system. States or counties will also offer limited-time rebates at various times. Any rebates you receive will usually come off your total price before any tax credits are calculated.
- Tax Credits: Tax credits reduce, dollar-for-dollar, the amount of income tax you owe the government. These differ from tax deductions.
- Tax Exemptions: Your solar panel system may qualify for both sales tax and property tax exemptions. Sales tax exemptions come into effect at the time of purchase. Property tax exemptions allow you to ignore the value added by your solar panels when calculating property taxes on your home.
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Federal Solar Incentives
When you think about solar incentives, you likely think of federal incentives first. A federal incentive that most people are likely familiar with is the Federal Solar Investment Tax Credit (ITC). This incentive is a tax credit for a specific percentage of the cost of your solar system.
The ITC applies to the value of solar panels installed on your primary or secondary residence in the United States. The solar system has to have been installed after January 1, 2006 on a property you own for you to be eligible for the credit. The ITC initially covered 30% of all installation costs (panels, labor, equipment and accessories), although the total amount has fluctuated over the years 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.
Wondering how the ITC applies to your specific situation? Reach out to your local Erie solar panel installer to get more information.
In August 2022, the Inflation Reduction Act laid out new provisions for the ITC, now called the Clean Energy Credit. The Clean Energy Credit is valid until 2035. Your solar installation project undertaken between 2022 and 2032 may qualify for a 30% tax credit. This amount will be decreased slightly each year until the current program ends. Starting in 2023, it will also be easier to obtain credits for energy storage systems under the new laws.
Click here to learn more about the new Inflation Reduction Act. To better understand how the new Clean Energy Credit applies to you, speak with your local Erie solar installers.
State & Local Solar Incentives
Rebates, tax credits and more might be provided at multiple levels. Along with federal solar incentives, there are often state and local ones as well. Incentives may be provided by your county or municipality, or by the state of Pennsylvania. Some incentives might only be available for a limited time, while others are ongoing.
Next Steps for Installing Solar in Erie
Solar incentives can be provided by your local utility company, the federal government or the Pennsylvania government. The large number of available solar incentives has facilitated the nationwide growth of solar energy use in the last 15 years. When you're prepared to make the switch to solar energy, getting in touch with your local Erie solar panel installation expert is an excellent place to start.
EcoWatch's Erie, PA Solar Incentives FAQs
What are some environmental benefits of installing solar panels on my house?
Solar energy is renewable — by changing where you get your energy, you can help reduce the strain on our planet's resources. A solar system can also lower the CO2 emissions from your home by 250 pounds annually, or around 5,000 pounds in 20 years.
When does the federal solar tax credit end?
The Clean Energy Credit (previously called the federal solar tax credit, or ITC), is slated to end on January 1, 2035. Currently set at 30%, the credit will drop to 26% in 2033 and to 22% in 2034.
If I change out my appliances for ones that utilize solar energy, are there any credits that I can claim?
The new Inflation Reduction Act introduces a number of incentives designed to reward homeowners who make eco-friendly upgrades. Some of these incentives include rebates and tax credits for installing new electric appliances. You can find more details about these incentives here.
Can I receive incentives both towards the up-front cost of solar panels, and later as reimbursement?
The order that incentives will be applied in may vary depending on which incentives you are claiming but usually yes, you can receive multiple types of incentives for your solar project. Check with your solar installer or a local tax professional to ensure you are claiming all of the incentives you qualify for and applying them in the correct order.
Can I use a combination of solar and another type of renewable energy to power my home?
Yes, you can use multiple types of renewable energy to power your home, such as a combination of wind and solar. You can also combine renewable energy generation with a backup source of non-renewable energy. You should discuss your plan with your local Erie solar installation expert, so that you understand what you'll need and what types 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.