2023 Solar Incentives Guide for Lititz, PA - Tax Credits & Rebates

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

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

The term "solar incentives" generally refers to financial incentives implemented by the government and by solar companies to encourage increased use of renewable energy by making installing and using solar panels more affordable. Various kinds of incentives, like discounts, cash back or credit towards your monthly utility bill, might be available to you. Some incentives may be handled by the Pennsylvania government, by your utility company or by county or municipality, while others are federal. Some broad categories of solar incentives include:

• Solar Renewable Energy Certificate (SREC): In general, solar systems that produce over a specific (normally small) amount of electricity will qualify for SRECs or similar performance-based incentives. SRECs and similar incentives are typically provided at the state level. When you receive an SREC, you can sell it to your utility company or another buyer, and the money you receive is normally considered part of your taxable income.
• Tax Exemptions: These could come in the form of property tax exemptions, which can let you ignore the value of your solar system when paying taxes on your house. You could also look for exemptions on sales tax at the time of purchase.
• Tax Credits: Tax credits are dollar-for-dollar reductions that lower the amount of income tax you owe the government. (A tax credit is different from a tax deduction.)
• Rebates: Solar rebates may be offered by your local utility company, or by your county or state. These rebates are essentially partial refunds that are applied after you purchase solar panels and before tax credits are calculated.
• Net Metering: Make sure you talk to your Lititz utility company about signing a net metering agreement. This allows you to get a 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.

Federal Solar Incentives

When you hear the term "solar incentives," federal incentives are likely the first thing that comes to mind. A federal incentive many people are likely to be familiar with is the Federal Solar Investment Tax Credit (ITC). This is a tax credit for a certain percentage of the cost of your solar system.

The ITC was originally for 30% of the total cost of installing solar panels, although that number has fluctuated slightly over time between 26-30%. The installation date of your solar system will determine what percentage you qualify for. The total cost of installation includes the panels themselves as well as the cost of equipment, accessories and labor. There is no maximum amount you can claim. The ITC applies to solar systems installed after January 1, 2006 on your primary or secondary residence. The residence must be owned by you and in the United States.

Talking to your local Lititz solar panel installation expert is the best way to understand how the ITC may apply to your situation.

In August 2022, the ITC (now called the Clean Energy Credit) was bolstered by the passage of the Inflation Reduction Act. Now, solar installation projects started after January 1, 2022 and completed by the end of 2032 may be eligible for a 30% tax credit. The amount of the credit will then decrease slightly each year until the current Clean Energy Credit expires in 2035. The expansion also makes credits for energy storage systems even easier to claim, beginning in 2023.

Click here to learn more about the new Inflation Reduction Act. To understand how the new Clean Energy Credit will apply to you, reach out to your local Lititz solar installation expert.

State & Local Solar Incentives

Some solar incentives may be provided by state and local governments. Like with federal incentives, these can include rebates, tax credits and more. Some incentives are offered for only a limited time, while others are ongoing. Local solar incentives might come from the Pennsylvania government, or from your specific county or municipality.

Next Steps for Installing Solar in Lititz

Solar incentives may come from your local utility company, the federal government or the Pennsylvania government. The growing number of incentives available has helped nationwide use of solar energy increase greatly in the last 15 years. We suggest talking to your local Lititz solar installation company for more information about these incentives and to make sure that you're getting the largest number possible for your solar panels.