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

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

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

Solar incentives are designed to encourage homeowners to switch their home over to renewable energy by offering financial incentives meant to lower the burden of solar panel installation and use. Various kinds of incentives, such as discounts, cash back or credit towards your monthly utility bill, might be available to you. Some incentives may be handled by the state of Pennsylvania, by your utility company or by county or municipality, while others are federal. Some broad categories of solar incentives include:

• Rebates: Solar rebates can be provided by your state or county, or by your local utility company. These rebates work as cash back that is applied after you purchase a solar system and before tax credits are calculated.
• Solar Renewable Energy Certificate (SREC): SRECs and other performance-based incentives might be available to you if the solar system on your home produces more than a specified (generally small) amount of electricity. Performance-based incentives are typically handled by the state government. You can sell SRECs to your utility company or other buyers, and the money you make is usually considered part of your taxable income.
• Tax Credits: Tax credits are dollar-for-dollar reductions that lower the amount of income tax you owe the government. (This is different from a tax deduction.)
• Tax Exemptions: Sales tax exemptions are applied at the point of sale for your solar panels. Property tax exemptions let you ignore the value added by your solar system when you calculate the amount of 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've signed a net metering agreement with your Lower Macungie utility company, they will subtract the value of the excess energy produced by your solar system from your utility bill each month. In some places, this credit is dollar-for-dollar, while in other places you might be refunded a percentage of the value.

Federal Solar Incentives

Federal incentives are the kind of incentives that you are most likely to have some knowledge of. The solar incentive that you're most familiar with is probably the Federal Solar Investment Tax Credit (ITC), which gives you a credit on your taxes equal to a percentage of the cost of 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, labor, accessories and equipment. 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 depending on when the project was completed, your credit may range from 26-30%. There is no maximum amount you can claim.

To find out exactly how much the ITC could save you, contact your local Lower Macungie solar panel installer.

The Inflation Reduction Act, passed in August 2022, added more provisions to the ITC (as well as retitling it the Clean Energy Credit). The new Clean Energy Credit is valid until 2035. American homeowners are now eligible for a 30% credit for solar systems installed between 2022 and 2032. This credit will then decrease annually until the date of expiration. The program expansion also makes it easier to get credit for energy storage systems, starting in 2023.

More information about the new Inflation Reduction Act can be found here. To fully understand how the new Clean Energy Credit applies to you, reach out to your local Lower Macungie solar installation company.

State & Local Solar Incentives

In addition to federal solar incentives, there are often also state ones. Rebates, tax credits and more may be available at a more local level. These incentives may be handled by your county or municipality, or by the Pennsylvania government. Some incentives may be available for a limited time, while others are ongoing.

Next Steps for Installing Solar in Lower Macungie

You can qualify for solar incentives from the federal government and the Pennsylvania government, as well as from your local utility company. This increase in availability of solar initiatives over the last 15 years has helped increase nationwide solar energy use enormously. We suggest talking to your local Lower Macungie solar installation expert for more information about these incentives and to ensure that you're getting the most money possible for your solar system.