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

Solar installers are experts in maximizing your solar tax credits and rebates.
Get a free quote from one of our trusted Lancaster solar installers to see how much you can save.

By EcoWatch Local Advisors

Data Analysis: James Savino

Ranking Methodology: Karsten Neumeister

Updated January 20, 2023

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We work with a panel of solar experts to create unbiased reviews that empower you to make the right choice for your home. No other site has covered renewables as long as us, which means we have more data and insider information than other sites. Our rankings are never affected by revenue or partnerships.

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

High Performance Buildings Incentive Program

Incentive Type:
Loan Program
Residential loans/loan guarantees: $100,000
Commercial loans/loan guarantees: $2 million
Grants: Lesser of 10% of project costs or $500,000

Wind and Geothermal Incentives Program

Incentive Type:
Loan Program
Manufacturer loans: $40,000 per job created within 3 years
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

Incentive Type:
Solar Renewable Energy Credit Program
Varies based on market conditions; during 2015 the market price for PA-sourced SRECs has ranged from approximately $32 - $55/MWh ($0.032 - $0.055/kWh) although individual trades have taken place at substantially lower and higher prices.
Learn more:

High Performance Building Incentives Program

Incentive Type:
Grant Program
Vary by project, but program generally requires matching funds at least equivalent to DCED funding

Federal Residential Renewable Energy Tax Credit

Incentive Type:
Personal Tax Credit
30% federal tax credit for systems placed in service after 12/31/2021 and before 01/01/2033. Good for: solar water heat, solar photovoltaics, biomass, geothermal heat pumps, wind (small), fuel cells using renewable fuels.

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


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.

Best National Provider

SunPower

★★★★★
5.0

  • Most efficient panels on the market
  • National coverage
  • Cradle to Cradle sustainability certification
  • Great warranty coverage
  • Expensive
  • Customer service varies by local dealer

Best Regional Coverage

Momentum Solar

★★★★★
4.5

  • Great warranty coverage
  • Representatives are experts on local policies
  • Concierge service ensures steady communication
  • Slightly limited service offerings

Best Technology

Tesla Energy

★★★★★
4.5

  • Price-match guarantee
  • Sleek, efficient, and durable solar panels
  • Best solar battery on the market
  • Some reported issues with customer service
  • Customer service varies by local dealer

EcoWatch's Lancaster, PA Solar Incentives FAQs

What if I want to add a solar system to a vacation home, rental property or commercial property? Do I still qualify for incentives?

Many solar incentives apply to a property you own that is located within the United States; most secondary residences fall into this category. There may be other solar incentives available for commercial properties, depending on the details. We recommend getting in touch with your local solar installer and/or tax professional to best understand what incentives may apply to your specific situation.

How can I find out if I qualify for certain solar incentives?

Typically, solar incentives apply to:

  1. a new solar system
  2. installed on a property that you own
  3. within the U.S.
  4. between the dates specified by a particular incentive.

Specific incentives, including ones handled by the Pennsylvania government or by your county/municipality, may have additional qualifications. Get in touch with your local Lancaster solar installer to find out what incentives your project may qualify for.

When does the federal solar tax credit end?

The federal solar tax credit, previously called the ITC and now named the Clean Energy Credit, is slated to end on 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 switch my appliances out for ones that use solar energy, are there any credits I can claim?

The new Inflation Reduction Act provides multiple incentives designed to reward homeowners for making eco-friendly upgrades. Some of these incentives include rebates and tax credits for installing new electric appliances. You can find more details about these incentives here.

Can I qualify for incentives both towards the up-front cost of solar panels, and later as reimbursement?

Yes, you can receive both rebates and tax credits towards the cost of solar panels. Depending on which incentives you are applying for, they may apply in a different order. Be sure to speak with your solar installer or a local tax professional to ensure that you are claiming the correct incentives and that you're getting the most money you can.

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.

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