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
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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 phrase "solar incentives" generally refers to financial incentives put in place by solar companies and the government to encourage the adoption and use renewable energy by making the installation and use of solar panels more affordable. Various kinds of incentives, including discounts, cash back or monthly utility bill credits, might be available to you. Some incentives may be provided via the Pennsylvania government, by your utility company or by county or municipality, while other incentives are federal. Types of solar incentives might include:
- Tax Credits: Tax credits lower, dollar-for-dollar, the amount of income tax you owe the government. These differ from tax deductions.
- Rebates: Your solar installer might help you claim a rebate, or partial refund after purchase, for your solar system. Counties or states will also sometimes offer limited-time rebates. The value of a rebate will usually be deducted from the total price before any tax credits are calculated.
- Tax Exemptions: Sales tax exemptions are applied at the point of sale for your solar panels. Property tax exemptions allow you to exclude the value added by your solar system when you're calculating how much property tax you need to pay on your home.
- Net Metering: Net metering becomes relevant after your solar system is up and running. If you have in place a net metering agreement with your Lehigh utility company, it will subtract the value of the excess energy your solar system produces from your utility bill each month. In some places, this credit is dollar-for-dollar, while in other places you might get refunded a percentage of the value.
- Solar Renewable Energy Certificate (SREC): SRECs and other similar performance-based incentives are typically handled by your state government. Once your solar system meets the threshold (usually a small amount of energy production), you are eligible to receive SRECs that can then be sold to your utility company or other buyers. The money you receive from the sale is usually considered part of your taxable income.
Federal Solar Incentives
When thinking about solar incentives, federal incentives might be the first thing that comes to mind. You might have heard of the Federal Solar Investment Tax Credit, or ITC. The ITC is a tax credit that reduces your taxes by a certain percentage of the money you spend on your solar system.
The ITC covers 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, labor and accessories. You can claim this credit for a solar panel system installed on a primary or secondary residence in the United States that you own. Originally, you could claim 30% of the total cost, although the amount you can claim may range between 26-30%. There is no maximum claim amount.
Your local Lehigh solar panel installer can provide more information about the ITC and how it might apply to your situation.
In August 2022, the Inflation Reduction Act made revisions to the ITC, now titled the Clean Energy Credit. Homeowners can now receive a credit equal to 30% of the total solar system installation costs for projects that began after January 1, 2022 and will be finished by the end of 2032. The credit percentage will then begin to decrease yearly until the Clean Energy Credit expires in 2035. The program expansion also makes claiming credit for energy storage systems easier than ever before, starting in 2023.
More information about the new Inflation Reduction Act can be found here. The best way to understand how the new Clean Energy Credit will apply to you is to speak with your local Lehigh solar panel company directly.
State & Local Solar Incentives
Some solar incentives are often also provided by state and local governments. As with federal incentives, these might include tax credits, rebates and more. Certain incentives are ongoing, while others are available for a limited time. They might be given by your county or municipality, or by the Pennsylvania government.
Next Steps for Installing Solar in Lehigh
You can receive solar incentives from the Pennsylvania government and the federal government, as well as from your local utility company. Growing availability of solar initiatives in the past 15 years has helped increase nationwide solar energy use enormously. Talking to your local Lehigh solar panel installation company is the right first step towards getting the most money possible when you switch to solar energy.
EcoWatch's Lehigh, PA Solar Incentives FAQs
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