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

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

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

Solar incentives are intended to make renewable energy usage more affordable through financial incentives for individuals who install solar panels on their homes. Incentives can include things like discounts, cash back or credit on your utility bill each month. Some incentives are handled federally, while others are offered by the state of Pennsylvania or your utility company, county or municipality. Some broad categories of solar incentives include:

• Tax Credits: Tax credits reduce, dollar-for-dollar, the total amount of tax you owe the federal government. Tax credits differ from tax deductions.
• Tax Exemptions: Tax exemptions can come in two forms. The first is sales tax exemption, applied when you purchase solar panels. The second is property tax exemption, which allows you to ignore the value added by your solar system when calculating property tax for your home.
• Solar Renewable Energy Certificate (SREC): Typically, solar systems that produce more than a predetermined (generally small) amount of electricity can qualify for SRECs or other performance-based incentives. SRECs and similar incentives are typically offered at the state level. You can sell SRECs to your utility company or another buyer, and generally the money you make is normally considered part of your taxable income.
• Net Metering: Net metering factors in after your solar system is up and running. If you have a net metering agreement with your Londonderry utility company, it will subtract the value of the excess energy your solar system produces from your utility bill each month. In some locations, this credit is dollar-for-dollar, while in other places you might receive a refund equivalent to a percentage of the value.
• Rebates: A rebate is a partial refund credited to your account after you've paid for your solar panels. These might be offered by your local utility company, your state or your county. The rebates are usually applied before calculating tax credits.

Federal Solar Incentives

When thinking about solar incentives, you probably think of federal incentives first. The Federal Solar Investment Tax Credit, or ITC, is the most commonly known federal solar incentive. The ITC offers a tax credit for a specific percentage of the cost of your solar system.

The ITC can be applied to solar panels installed after January 1, 2006 on a primary or secondary residence that you own in the United States. Originally, the tax credit was for 30% of the total cost — for panels, accessories, labor and equipment — although that amount may range from 26-30%, depending on when your solar project was undertaken. There is no cap on the amount you can claim.

Your local Londonderry solar panel installation expert can offer more information about the ITC and how it applies to your situation.

In August 2022, the ITC (now titled the Clean Energy Credit) was bolstered by the passing of the Inflation Reduction Act. The Clean Energy Credit runs until 2035. Your solar installation project undertaken between 2022 and 2032 may qualify for a 30% tax credit. This amount will decrease slightly on a yearly basis until the current program ends. The expansion also makes claiming credit for energy storage systems easier than ever before, beginning in 2023.

More information about the new Inflation Reduction Act can be found here. To best understand how the new Clean Energy Credit might apply to you, get in touch with your local Londonderry solar installation expert.

State & Local Solar Incentives

Some solar incentives may be offered at the local or state level. As with federal incentives, these can include tax credits, rebates and more. The incentives — which might be provided by your county or municipality, or by the state of Pennsylvania — may be offered on an ongoing basis, or for only a limited time.

Next Steps for Installing Solar in Londonderry

You can qualify for solar incentives from the federal government and the Pennsylvania government, as well as from your local utility company. The growing availability of solar initiatives in the past 15 years has helped greatly increase nationwide adoption of solar energy. Talking to your local Londonderry solar panel installer is the best first step towards getting the most money possible when you switch to solar energy.