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.
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Updated May 04, 2023
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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
Source: https://www.dsireusa.org/
Solar incentives are meant to encourage people to make the switch to renewable energy by providing incentives meant to lower the financial burden of solar panel installation and use. Various types of incentives, including cash back, discounts or credit towards your monthly utility bill, may be available to you. Certain incentives may be provided via the state of Pennsylvania, by your utility company or by county or municipality, while other incentives are federal. Some solar incentives you might qualify for are:
- Tax Credits: Tax credits are dollar-for-dollar reductions that lower the amount of income tax you owe the federal government. (A tax credit is different from a tax deduction.)
- Tax Exemptions: Your solar panel system may qualify for both sales tax and property tax exemptions. Sales tax exemptions are effective at the time of purchase. Property tax exemptions let you exclude the added value of the solar panels when you are calculating property taxes on your house.
- Rebates: A rebate is a partial refund credited to your account after you've paid for your solar system. Rebates might be offered by your local utility company, your state or your county. The rebates are usually applied before calculating tax credits.
- Solar Renewable Energy Certificate (SREC): SRECs and similar other performance-based incentives may be available to you if your solar system produces more than a specified (usually small) amount of electricity. This category of incentives is normally handled by the state government. You can sell your SRECs to your utility company or other buyers, and the money you receive in return is typically considered part of your taxable income.
- Net Metering: You may be able to sign a net metering contract with your Lancaster utility company, that may apply to all or a percentage of the excess electricity that is generated by your solar panels. They will then subtract this value from your utility bill each month.
Federal Solar Incentives
Federal solar incentives are probably the first thing that you think of when you think about solar incentives. You've likely heard of the Federal Solar Investment Tax Credit, or ITC. This incentive is a tax credit equal to a specified percentage of the money you spend on solar panels for your home.
The ITC applies towards solar systems installed after January 1, 2006 and under this program you can deduct from your taxes a percentage of the total cost of solar panels, equipment, labor and accessories. This credit can apply towards solar panels installed on a primary or secondary residence in the United States that you own. Originally, you could claim 30% of the total cost, although certain projects may qualify for only 26%, depending on the details. There is no maximum amount you can claim.
Your local Lancaster solar panel installation expert can provide more information about the ITC and how it might apply to your situation.
In August 2022, the ITC (now titled the Clean Energy Credit) was expanded and extended by the passage of the Inflation Reduction Act. Homeowners can now qualify for a credit equal to 30% of the total costs of solar system installation for projects started after January 1, 2022 and completed before the end of 2032. The credit percentage will then decrease on a yearly basis until the Clean Energy Credit expires in 2035. The expansion also makes it easier to get credit for energy storage systems, starting in 2023.
Click here to learn more about the new Inflation Reduction Act. Your local Lancaster solar panel company is the best resource for answering your questions regarding the new Clean Energy Credit and how it may apply to you.
State & Local Solar Incentives
Rebates, tax credits and more might be claimed at multiple levels. In addition to federal solar incentives, there are often state and local ones, too. Some incentives are ongoing, while others may only be available for a limited time. They may be given by your county or municipality, or by the Pennsylvania government.
Next Steps for Installing Solar in Lancaster
Solar incentives may be offered by the Pennsylvania government, the federal government or your local utility company. The large number of solar incentives available has contributed to a large increase in solar energy use in the last 15 years. Reach out to your local solar panel installer today to discover more about the various programs and to save the most money possible on solar panels for your Lancaster home.
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EcoWatch's Lancaster, PA Solar Incentives FAQs
I already have solar panels. Does my system qualify for any incentives?
If your solar panels were installed after January 1, 2022, you may qualify for the recently increased 30% tax credit under the Inflation Reduction Act. If your system was installed between 2006 and 2021, you may qualify for a tax credit between 26% and 30%, depending on the year it was installed. Reaching out to the company that installed your solar system, or any local Lancaster solar installer, can help you understand what incentives you can apply for.
How much will solar panels save me annually on my electric bill in Lancaster?
Typically, homeowners in Lancaster who install solar panels save approximately $739.82 per year, or approximately $14,056.59 over 20 years after they make the switch.
What are some of the environmental benefits of switching to solar?
Solar energy is a renewable energy source — by switching where you get your energy, you help lessen the strain on our planet's resources. Solar panels can also reduce the CO2 emissions from your home by 250 pounds annually, or around 5,000 pounds over 20 years.
Can I receive incentives both towards the initial cost of solar panels, and later as reimbursement?
The order your incentives will be applied in could vary depending on which incentives you receive but typically yes, you can claim multiple types of incentives for your solar project. Speak to your solar installer or a local tax professional to be sure you are claiming all possible incentives and applying them in the correct order.
Can I use a combination of solar and another type of renewable energy to power my home?
Yes, you can employ multiple types of renewable energy to power your home — for example, a combination of wind and solar. You can also combine renewable energy generation with a non-renewable backup source of energy. Make sure that you discuss the details of your plan with your local Lancaster solar installation expert, to get an understanding of what will be needed and what incentives you will or won't qualify for.
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.