2023 Solar Incentives Guide for Kennett Square, PA - Tax Credits & Rebates
In this guide, we'll cover the latest solar incentives and rebates available in Kennett Square.
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 May 04, 2023
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What Solar Tax Credits, Incentives, and Rebates are Available in Kennett Square?
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
Source: https://www.dsireusa.org/
Solar incentives are meant to encourage homeowners to switch to renewable energy by providing financial incentives meant to lower the burden of solar panel installation and use. Solar incentives may include upfront discounts, cash back or credit towards your monthly utility bill. Some incentives are given by the federal government, some by the Pennsylvania government and some by your utility company, county or municipality. Some solar incentives you might qualify for are:
- Solar Renewable Energy Certificate (SREC): SRECs and similar performance-based incentives are usually handled by your state government. Once your solar system meets the qualification threshold (generally 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 receive from the sale is generally considered part of your taxable income.
- Rebates: Some solar companies will help you claim a rebate, or partial refund of your purchase, for your solar panels. States or counties will also offer limited-time rebates at various times. If you receive a rebate, that amount will usually come off the total price before any tax credits are calculated.
- Tax Credits: These credits are dollar-for-dollar reductions (not deductions) in how much in taxes you owe the federal government.
- Net Metering: Be sure to speak with your Kennett Square utility company about signing a net metering agreement. This will allow you to receive credit towards your utility bill every month 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.
- Tax Exemptions: These might come in the form of property tax exemptions, which can let you exclude the value added by your solar panels when calculating the taxes you pay on your house. You may also qualify for an exemption on sales tax at the time of purchase.
Federal Solar Incentives
When someone says "solar incentives," you probably think of federal incentives first. The solar incentive that you're most familiar with is probably the Federal Solar Investment Tax Credit (ITC), which provides a credit on your taxes equal to a certain percentage of your solar system's cost.
The ITC can be credited towards the value of solar panels installed on your primary or secondary residence in the United States. The solar system has to have been installed on a property you own after January 1, 2006 for you to be eligible for the credit. The ITC initially covered 30% of all installation costs (panels, labor, equipment and accessories), although the covered amount has fluctuated slightly over time between 26-30%. The amount you qualify for will depend on when your solar system was installed. There is no cap on the claim amount.
To better understand how the ITC will apply to you, contact your local Kennett Square solar panel installer and request more information.
In August 2022, the ITC (now called the Clean Energy Credit) was expanded and extended by the passage of the Inflation Reduction Act. The Clean Energy Credit lasts until 2035. Solar installation projects started after January 1, 2022 and completed by the end of 2032 may qualify for a 30% tax credit. This amount will decrease slightly on a yearly basis until the end of the current program. The program expansion also makes credits for energy storage systems even easier to claim, starting in 2023.
More information about the new Inflation Reduction Act can be found here. The easiest way to fully understand how the new Clean Energy Credit applies to you is to talk with your local Kennett Square solar panel installation expert.
State & Local Solar Incentives
In addition to federal solar incentives, there are often also state ones. Tax credits, rebates and more may be available at a more local level. These incentives may be handled by your county or municipality, or by the Pennsylvania government. Some incentives may be ongoing, while others are available for a limited time.
Next Steps for Installing Solar in Kennett Square
You can qualify for solar incentives from the Pennsylvania government and the federal government, as well as from your local utility company. This increase in availability of solar initiatives in the past 15 years has helped increase nationwide solar energy use enormously. Speaking with your local Kennett Square solar panel installer is the right first step towards getting the most money possible when you switch to solar energy.
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EcoWatch's Kennett Square, PA Solar Incentives FAQs
My home already has solar panels installed. Do I qualify for any incentives?
An excellent idea would be to talk to a representative from the company that installed your solar panels — or speak to a local Kennett Square solar installer — to clarify which incentives you may qualify for. If your system was installed after January 1, 2022, you likely qualify for the recently increased 30% tax credit under the Inflation Reduction Act. Systems installed between 2006 and 2021 may qualify for a tax credit of 26-30%.
Who installs solar panels near me?
To find the top solar panel installation companies near you, take a look at our article on Kennett Square's top solar panel companies.
What are some of the environmental benefits of switching to solar?
Solar energy is renewable — by changing where you get your energy, you can help reduce the strain on our planet's resources. Solar panels can also reduce your home's CO2 emissions by 300 pounds a year, or around 5,000 pounds over 20 years.
How long until the federal solar tax credit ends?
The federal solar tax credit, formerly known as the ITC and now called the Clean Energy Credit, is scheduled 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 trade in my appliances for ones that use solar energy, are there benefits that I can claim?
Under the new Inflation Reduction Act, there are several new financial incentives that are available when you make eco-friendly improvements to your home. More details on these incentives, including information about incentives for purchasing new appliances, can be found here.
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.