2023 Solar Incentives Guide for Lehigh, PA - Tax Credits & Rebates
In this guide, we'll cover the latest solar incentives and rebates available in Lehigh.
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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By EcoWatch Local Advisors
Data Analysis: James Savino
Ranking Methodology: Karsten Neumeister
Updated March 14, 2023
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What Solar Tax Credits, Incentives, and Rebates are Available in Lehigh?
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
First Energy (MetEdison, Penelec, Penn Power, West Penn Power) - Residential Solar Water Heating Program
FirstEnergy (MetEdison, Penelec, Penn Power, West Penn Power) - Residential Energy Efficiency Programs
Clothes Washer: $25- $50
Clothes Dryer: $50
Fridge/Freezer Recycling: $50
HVAC tune up: $50
Furnace Fan Motor: $150
Ductless Minisplit AC : $200
Central AC: $100 - $200
Air Source Heat pump: $250 - $500
Geothermal Heat Pump: $600
Packaged Terminal AC: $75
Packaged Terminal Heat Pump: $150
Programmable Thermostat: $25
Solar Water Heat: $500
Heat Pump Water Heater: $500
Home Energy Audit: $250
Lighting: Available as in-store discount in participating stores
Federal Residential Renewable Energy Tax Credit
The term "solar incentives" refers broadly to financial incentives designed to encourage increased use of renewable energy by making installing and using solar panels more affordable. Incentives could include things like discounts, cash back or monthly utility bill credits. Some incentives are offered federally, while others are offered by the state of Pennsylvania or by your specific utility company, county or municipality. Types of solar incentives might include:
- Rebates: A solar rebate is a partial refund given after you've purchased your solar system. Rebates might be offered by your local utility company, your county or your state. The discount that rebates offer is normally applied to the price of solar panels before tax credits are calculated.
- Tax Exemptions: Your solar panels could 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 exclude the value added by your solar panels when you are calculating property taxes on your home.
- Solar Renewable Energy Certificate (SREC): SRECs can be sold to your utility company (or other buyers) for cash that is generally considered part of your taxable income. Typically, a certain (small) threshold of energy production must be met before your solar system is eligible for SRECs or similar performance-based incentives. SRECs and similar incentives are generally handled by your state government.
- Tax Credits: These credits are dollar-for-dollar reductions (not deductions) in how much income tax you owe the federal government.
- Net Metering: You may be able to sign a net metering contract with your Lehigh utility company. This agreement 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 likely the first thing that comes to mind when thinking about solar incentives. The Federal Solar Investment Tax Credit, or ITC, is likely the most commonly known federal solar incentive. The ITC offers a tax credit for a set percentage of your solar system's cost.
The ITC originally covered 30% of the total cost of installing solar panels, and has fluctuated slightly over time between 26-30%. The installation date of your solar system will determine what percentage you qualify for. The total installation cost includes the panels themselves as well as the cost of accessories, equipment and labor. There is no maximum claim amount. The ITC can be applied to solar systems installed after January 1, 2006 on your primary or secondary residence. The residence must be in the United States and owned by you.
Reaching out to your local Lehigh solar panel installation expert is the best way to learn more about how the ITC applies to your situation.
In August 2022, the ITC (now referred to as the Clean Energy Credit) was expanded and extended by the passing of the Inflation Reduction Act. The new Clean Energy Credit extends until 2035. You can now apply for a 30% credit for solar systems installed between January 1, 2022 and December 31, 2032. This credit will then see a slight annual decrease until the date of expiration. The program expansion also makes it easier to get credit for energy storage systems, beginning in 2023.
Click here to learn more about the new Inflation Reduction Act. Your local Lehigh solar panel installation experts can answer any questions you have and explain how the new Clean Energy Credit will apply to you.
State & Local Solar Incentives
Rebates, tax credits and more can be provided at multiple levels. In addition to federal solar incentives, there are often state and local ones as well. The incentives — which may be handled by the state of Pennsylvania, or by your county or municipality — might be offered for only a limited time, or on an ongoing basis.
Next Steps for Installing Solar in Lehigh
Solar energy use nationwide has gone up significantly in the last 15 years, in part due to the growth in the number of solar incentives. You can obtain these incentives from your local utility company, the federal government or the Pennsylvania government. If you're ready to make the switch to solar energy, reaching out to your local Lehigh solar panel installation expert is a great first step.
Best Regional Coverage
- Great warranty coverage
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- Concierge service ensures steady communication
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- Some reported issues with customer service
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EcoWatch's Lehigh, PA Solar Incentives FAQs
What if I want to add a solar system to a rental property, vacation home or commercial property? Can I still qualify for incentives?
Many solar incentives apply to a property you own that is located within the United States; most secondary residences will fall into this category. Other solar incentives may be available for commercial properties, depending on the specifics. We recommend getting in touch with your local solar installer and/or tax professional to fully understand what incentives apply to your specific situation.
How can I find out if I qualify for certain solar incentives?
It's a smart idea to get in touch with your local Lehigh solar installer to get an understanding of which incentives your project may qualify for. In most cases, solar incentives apply to new solar panel systems installed on property you own (in the U.S.) between the dates specified by the incentive. Some incentives, like those given by the state of Pennsylvania, might have additional requirements.
What are some of the environmental benefits of switching to solar?
You can decrease your carbon footprint by 250 pounds of CO2 annually by switching to solar panels. This adds up to approximately 5,000 pounds in 20 years. In addition, solar power is a renewable energy source, meaning that making the switch lessens the drain on our planet's resources.
How long until the federal solar tax credit ends?
The federal solar tax credit, formerly known as the ITC and now named the Clean Energy Credit, is slated 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 can utilize solar energy, are there any benefits I can claim?
The new Inflation Reduction Act introduces multiple incentives meant to reward homeowners who make eco-friendly upgrades. Some incentives include rebates and tax credits for installing new electric appliances. You can find more details about these incentives 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.