2023 Solar Incentives Guide for Lancaster, PA - Tax Credits & Rebates
In this guide, we'll cover the latest solar incentives and rebates available in Lancaster.
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 Lancaster?
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 phrase "solar incentives" refers to financial incentives that are in place to encourage the adoption and use renewable energy by making solar panels more affordable. Different types of incentives, such as discounts, cash back or monthly utility bill credits, might be available to you. Some incentives may be provided via 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: Don't forget to talk with your Lancaster 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 may 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 of your purchase, for your solar system. States or counties will also sometimes offer limited-time rebates. Any rebates you receive will usually come off the total price before any tax credits are calculated.
- Tax Credits: Unlike tax deductions, tax credits are dollar-for-dollar reductions in the amount of income tax that you owe the government.
- Solar Renewable Energy Certificate (SREC): SRECs and similar performance-based incentives may be available to you if the solar system on your home produces more than a specified (usually small) amount of electricity. This category of incentives is typically handled at the state level. You can sell your SRECs to your utility company or other buyers, and the money you make is usually considered part of your taxable income.
- Tax Exemptions: Your solar panels might qualify for both sales tax and property tax exemptions. Sales tax exemptions come into effect at the time of purchase. Property tax exemptions let you ignore the value that solar panels add when calculating property taxes on your home.
Federal Solar Incentives
Federal solar incentives are likely to be the first thing that comes to mind when you think about solar incentives. 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 specified percentage of your solar system's cost.
The ITC can be applied to 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. You can receive this credit for a solar panel system installed on a primary or secondary residence that you own in the United States. The original amount you could claim was 30% of the total cost, although certain projects may qualify for only 26%, depending on the details. There is no maximum claim amount.
To better understand exactly how much the ITC could save you, speak with your local Lancaster solar panel installer.
The ITC was both renewed and expanded by 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 begun after January 1, 2022 and finished by December 31, 2032 might qualify for a 30% tax credit. This percentage will then see a slight annual decrease until the current Clean Energy Credit expires in 2035. The expansion also makes claiming credit for energy storage systems easier than ever before, beginning in 2023.
Click here to learn more about the new Inflation Reduction Act. The best way to understand how the new Clean Energy Credit will apply to you is to speak with your local Lancaster solar panel company directly.
State & Local Solar Incentives
Federal solar incentives are not your only option; rebates, tax credits and more may be offered at the state and local level. These incentives may be handled by the Pennsylvania government, or by your county or municipality. Some are available for a limited time, while others are ongoing.
Next Steps for Installing Solar in Lancaster
There are a variety of solar incentives: those given by the federal government, those given by the Pennsylvania government and those given by local utility companies, to name a few. The use of solar energy has grown tremendously in the last 15 years, thanks to these incentives. Speak with your local solar panel installation expert today to find out more information and to save the most money possible on solar panels for your Lancaster home.
EcoWatch's Lancaster, PA Solar Incentives FAQs
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