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

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

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

The phrase "solar incentives" broadly refers to financial incentives implemented by the government and by solar companies to encourage the adoption and use renewable energy by making installing and using solar panels more affordable. The incentives may include upfront discounts, cash back or credit towards your monthly utility bill. Some incentives are offered by the federal government, some by the state of Pennsylvania and some by your specific utility company, county or municipality. Some solar incentives you might qualify for are:

• Tax Exemptions: Your solar system might qualify for both sales tax and property tax exemptions. Sales tax exemptions are effective at the time of purchase. Property tax exemptions allow you to exclude the added value of the solar panels when you are calculating property taxes on your home.
• Rebates: Solar rebates may be provided by your local utility company, or by your county or state. These rebates work as partial refunds that are applied after your purchase of solar panels and before tax credits are calculated.
• Solar Renewable Energy Certificate (SREC): SRECs and similar other performance-based incentives may be available to you if you have a solar system that produces more than a specified (usually small) amount of electricity. These types of incentives are generally handled by the state government. You can sell your SRECs to your utility company or other buyers, and the money you make is usually considered part of your taxable income.
• Tax Credits: Unlike tax deductions, tax credits reduce, dollar-for-dollar, the amount of income tax that you owe the government.
• Net Metering: Make sure you speak with your Lower Makefield utility company about signing a net metering agreement. This will allow you to receive credit towards your monthly utility bill for the value of excess energy generated by your solar panels. You might 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 may be the first thing that comes to mind. The solar incentive that you're most likely to have heard of is the Federal Solar Investment Tax Credit (ITC), which gives you a credit on your taxes equal to a specified percentage of your solar system's cost.

The ITC is applied to the total cost of installing solar panels, including the panels themselves as well as labor, equipment and accessories. This credit can be claimed for panels installed after January 1, 2006 on a primary or secondary residence that you own, as long as it is located in the United States. From its original value of 30% of the total cost, the credit has fluctuated slightly between 26-30%, and you may qualify for varying percentages depending on when your project was completed. There is no maximum amount you can claim.

Talking to your local Lower Makefield solar panel installation expert is the best way to understand how the ITC applies to you.

In August 2022, the Inflation Reduction Act expanded and extended the ITC, now called the Clean Energy Credit. Homeowners can now qualify for a credit equal to 30% of the total solar system installation costs for projects started after January 1, 2022 and completed before the end of 2032. The percentage will then decrease on a yearly basis until the Clean Energy Credit ends in 2035. Starting in 2023, it will also be easier to claim credits for energy storage systems with the new act.

Click here to learn more about the new Inflation Reduction Act. Your local Lower Makefield solar panel installation expert is the best person to answer your questions regarding the new Clean Energy Credit and how it will apply to you.

State & Local Solar Incentives

Some solar incentives are often also provided by state and local governments. Similar to federal incentives, these could include tax credits, rebates and more. Some incentives are offered for only a limited time, while others are ongoing. These local incentives may come from your county or municipality, or from the Pennsylvania government.

Next Steps for Installing Solar in Lower Makefield

There are many types of solar incentives: those offered by local utility companies, those offered by the federal government and those offered by the Pennsylvania government, to name a few. The use of solar energy has increased tremendously in the last 15 years, partially due to these incentives. We suggest talking to your local Lower Makefield solar installer to learn more about these incentives and to make sure that you're getting the most money possible for your solar system.