2025 Solar Incentives Guide for Franconia, PA - Tax Credits & Rebates

What Solar Tax Credits, Incentives, and Rebates are Available in Franconia?

Source: https://www.dsireusa.org/

The term "solar incentives" refers to financial incentives designed to encourage the adoption and use renewable energy by making solar panels more affordable. You might be eligible for different types of incentives, such as discounts, cash back or credit towards your monthly utility bill, depending on your situation. Certain incentives come from your specific utility company, county or municipality, some from the Pennsylvania government and others from the federal government. Categories of solar incentives include:

• Solar Renewable Energy Certificate (SREC): SRECs and other performance-based incentives are normally 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 you can then sell to your utility company or other buyers. The money you make is generally considered part of your taxable income.
• Tax Credits: Tax credits lower, dollar-for-dollar, how much income tax you owe the federal government. Tax credits differ from tax deductions.
• Net Metering: Be sure to talk to your Franconia utility company about signing a net metering agreement. This will allow you to get a credit towards your monthly utility bill for the value of excess energy your solar panels generate. You could receive either a dollar-for-dollar credit or a percentage of the value.
• Rebates: Your solar installer might help you claim a rebate, or partial refund after purchase, for your solar system. States or counties will also offer limited-time rebates at various times. The value of a rebate will usually be deducted from your total price before tax credits are calculated.
• Tax Exemptions: Tax exemptions can come in one of two forms. First, there is sales tax exemption, which is applied when you purchase solar panels. The second is property tax exemption. This allows you to exclude the added value of your solar system when calculating property tax for your house.

Federal Solar Incentives

When you think about solar incentives, you likely think of federal incentives first. You've likely heard of the Federal Solar Investment Tax Credit, or ITC. The ITC is a tax credit that reduces your taxes by a certain percentage of the money you spend on your solar system.

The ITC applies to the total cost of solar system installation, including the panels themselves as well as labor, accessories and equipment. You can claim this credit for panels installed after January 1, 2006, on a primary or secondary residence that you own and that is located in the United States. From its original value of 30% of the total cost, the credit has fluctuated slightly between 26-30%, and you may qualify for varying percentages depending on when your project was completed. There is no maximum amount you can claim.

To better understand exactly how much money the ITC could save you, get in touch with your local Franconia solar panel installation expert.

In August 2022, the Inflation Reduction Act made revisions to the ITC, now referred to as the Clean Energy Credit. Homeowners are now eligible for a credit of 30% of the total costs of solar system installation for projects started after January 1, 2022, and completed before the end of 2032. The percentage will then begin to decrease annually until the Clean Energy Credit expires in 2035. Starting in 2023, it will also be easier to obtain credits for energy storage systems with the new act.

More information about the new Inflation Reduction Act can be found here. Your local Franconia solar panel installers are the best people to answer your questions about the new Clean Energy Credit and how it will apply to you.

State & Local Solar Incentives

Tax credits, rebates and more can be claimed at multiple levels. In addition to federal solar incentives, there are often state and local ones, too. Incentives may 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 Franconia

Solar energy use nationwide has gone up significantly in the past 15 years, in part thanks to the increase in availability of solar incentives. You may get these incentives from the federal government, the Pennsylvania government or your local utility company. When you're prepared to make the change to solar energy, calling your local Franconia solar panel installation expert is an excellent place to start.