2023 Solar Incentives Guide for Exton, PA - Tax Credits & Rebates
In this guide, we'll cover the latest solar incentives and rebates available in Exton.
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
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What Solar Tax Credits, Incentives, and Rebates are Available in Exton?
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" includes a wide range of financial incentives put in place to make installing and using solar panels more affordable. This is done to encourage people to switch to renewable energy. Different kinds of incentives, like cash back, discounts or credit towards your monthly utility bill, may be available to you. Certain incentives may be offered by the state of Pennsylvania, by your utility company or by county or municipality, while others are federal. Some broad categories of solar incentives include:
- Net Metering: You may be able to sign a net metering contract with your Exton utility company, that may apply to all or a percentage of the excess electricity that is generated by your solar panels. Your utility company will then subtract this value from your utility bill each month.
- Tax Exemptions: These could come in the form of property tax exemptions, which can let you exclude the value of your solar system when calculating the taxes you pay on your house. You may also qualify for an exemption on sales tax at the time of purchase.
- Tax Credits: Tax credits are dollar-for-dollar reductions in the amount of income tax that you owe the government. (A tax credit is different from a tax deduction.)
- 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 sometimes offer limited-time rebates. If you receive a rebate, that amount will usually be deducted from the total price before tax credits are calculated.
- Solar Renewable Energy Certificate (SREC): SRECs and similar performance-based incentives are typically handled at the state level. Once your solar panel system meets a predetermined threshold (typically a small amount of energy production), you can receive SRECs that you can then sell to your utility company or other buyers. The money you make is usually considered part of your taxable income.
Federal Solar Incentives
Federal incentives are the type of incentives that you are most likely to have some familiarity with. You've likely heard of the Federal Solar Investment Tax Credit, or ITC. The ITC is a tax credit equal to a predetermined percentage of the money you spend on solar panels for your home.
The ITC covers solar systems installed after January 1, 2006 and allows you to deduct from your taxes a percentage of the total cost of solar panels, equipment, accessories and labor. This credit can apply towards a solar panel system installed on a primary or secondary residence that you own in the United States. The original claim amount was 30% of the total cost, although certain projects may qualify for only 26%, depending on the details. There is no maximum amount you can claim.
To understand exactly how much money the ITC could save you, speak with your local Exton solar panel installer.
The Inflation Reduction Act, passed in August 2022, added more provisions to the ITC (as well as retitling it the Clean Energy Credit). Now, solar installation projects started after January 1, 2022 and completed by the end of 2032 might qualify for a 30% tax credit. This credit amount will then decrease slightly each year until the current Clean Energy Credit expires in 2035. The expansion to the program also makes credits for energy storage systems even easier to claim, beginning in 2023.
Click here to learn more about the new Inflation Reduction Act. Your local Exton solar panel installation experts can answer your questions and explain how the new Clean Energy Credit may apply to you.
State & Local Solar Incentives
Not all solar incentives are federal; tax credits, rebates and more are often offered at the local or state level. Certain incentives are offered for only a limited time, while others are ongoing. Your local incentives could come from the Pennsylvania government, or from your specific county or municipality.
Next Steps for Installing Solar in Exton
You can apply for solar incentives from the federal government and the Pennsylvania government, as well as from your local utility company. The growing availability of solar initiatives over the last 15 years has helped increase solar adoption nationwide. Speaking with your local Exton solar panel installation expert is the best first step towards making sure you get all the incentives you qualify for when you switch to solar energy.
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EcoWatch's Exton, PA Solar Incentives FAQs
What are the highest-rated solar panel installation companies near me?
To find a top-rated solar panel installer, check out our guide to Exton's top solar panel companies.
What are some environmental benefits of installing solar panels on my home?
Solar energy is a renewable energy source — by changing where you get your energy, you help lessen the strain on our planet's resources. A solar system can also lower your home's CO2 emissions by 300 pounds annually, or roughly 5,000 pounds over 20 years.
How long until the federal solar tax credit ends?
The federal solar tax credit, previously called the ITC and now titled the Clean Energy Credit, is slated 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.
If I change out my appliances for ones that use solar energy, are there any incentives that I can claim?
The new Inflation Reduction Act provides a number of incentives designed to reward homeowners for making eco-friendly upgrades. Some of these incentives include tax credits and rebates 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 in which incentives are applied might vary depending on which incentives you are claiming but usually yes, you can claim multiple types of incentives for your solar project. Speak to your solar installer or a local tax professional to make sure you are claiming all of the incentives you qualify for and applying them in the correct order.
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.