2023 Solar Incentives Guide for King of Prussia, PA - Tax Credits & Rebates
In this guide, we'll cover the latest solar incentives and rebates available in King of Prussia.
You'll learn about:
- Local & State Solar Incentives
- Federal Tax Credits (Updated for 2023 and beyond)
- Ways to optimize your solar investment
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What Solar Tax Credits, Incentives, and Rebates are Available in King of Prussia?
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
Solar incentives are intended to encourage people to make the switch to renewable energy by providing financial incentives meant to lower the burden of solar panel installation and use. Incentives may include things like discounts, cash back or monthly utility bill credits. Some incentives are offered by the federal government, while others are handled by the state of Pennsylvania or by your specific utility company, county or municipality. Categories of solar incentives include:
- Rebates: Solar rebates might be provided by your local utility company, or by your state or county. These rebates work as cash back that is applied after your purchase of solar panels and before tax credits are calculated.
- Tax Credits: Tax credits reduce, dollar-for-dollar, the total amount of tax you owe the federal government. Tax credits differ from tax deductions.
- Tax Exemptions: Sales tax exemptions are effective at the point of sale for your solar panels. Property tax exemptions let you ignore the added value of your solar system when you're calculating how much property tax you need to pay on your home.
- Solar Renewable Energy Certificate (SREC): Generally, solar systems that produce more than a specified (generally small) amount of electricity qualify for SRECs or other performance-based incentives. SRECs and performance-based incentives in general are typically given by your state government. You can sell SRECs to your utility company or another buyer, and generally the money you make is normally considered part of your taxable income.
- Net Metering: You may be able to sign a net metering contract with your King of Prussia utility company that will apply to all or a percentage of the excess electricity your solar panels generate. Your utility company will then deduct this value from your utility bill each month.
Federal Solar Incentives
When people think of solar incentives, federal incentives are likely the first thing that comes to mind. The Federal Solar Investment Tax Credit, or ITC, is likely the most well-known federal solar incentive. The ITC provides a tax credit for a specific percentage of the cost of your solar system.
The ITC originally covered 30% of the total cost of solar system installation, and has fluctuated slightly over the last few years between 26-30%. The percentage you qualify for will depend on when your solar system was installed. The total installation cost includes the panels themselves as well as the cost of labor, equipment 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 in the United States and owned by you.
Talking to your local King of Prussia solar panel installation expert is the best way to learn more about how the ITC may apply to your situation.
The ITC was renewed and increased in scope after the passage of the Inflation Reduction Act in August 2022. It's also now called the Clean Energy Credit. Under the new program, solar installation projects started after January 1, 2022 and completed by the end of 2032 may be eligible for a 30% tax credit. This credit amount will then see a slight annual decrease until the current Clean Energy Credit expires in 2035. Starting in 2023, the expansion to the program will also make claiming credit for energy storage systems easier than ever before.
More information about the new Inflation Reduction Act can be found here. To best understand how the new Clean Energy Credit will apply to you, speak with your local King of Prussia solar installation expert.
State & Local Solar Incentives
Some solar incentives may be provided at the state and local level. Similar to federal incentives, these may include rebates, tax credits and more. Some incentives are ongoing, while others might only be available for a limited time. Solar incentives may be given by your county or municipality, or by the Pennsylvania government.
Next Steps for Installing Solar in King of Prussia
Solar incentives might come from your local utlity company, the Pennsylvania government or the federal government. The large number of incentives available has contributed to a large increase in solar energy use in the last 15 years. When you're ready to make the change to solar energy, getting in touch with your local King of Prussia solar panel installation expert is an excellent place to start.
EcoWatch's King of Prussia, PA Solar Incentives FAQs
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