2025 Solar Incentives Guide for Lower Paxton, PA - Tax Credits & Rebates

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

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

The term "solar incentives" refers to a wide range of financial incentives designed to make installing and using solar panels more affordable. This is done to encourage people to switch to renewable energy. Incentives might include things like discounts, cash back or credit towards your monthly utility bill. Some incentives are offered federally, while others are provided by the Pennsylvania government or by your specific utility company, county or municipality. Types of solar incentives might include:

• Rebates: Rebates, or cash back after a purchase, are typically applied prior to any solar tax credits being calculated. Rebates might be provided by your local utility company, by your county or by your state.
• Net Metering: Make sure you talk with your Lower Paxton utility company about signing a net metering contract. This will allow you to get a credit towards your monthly utility bill for the value of excess energy generated by your solar panels. You could receive either a dollar-for-dollar credit or a percentage of the value.
• Solar Renewable Energy Certificate (SREC): SRECs and other performance-based incentives are typically handled at the state level. Once your solar system meets the threshold (usually a small amount of energy production), you can receive SRECs that can then be sold to your utility company or other buyers. The money you make from the sale is generally considered part of your taxable income.
• Tax Exemptions: These can come in the form of property tax exemptions, which can let you exclude the value added by your solar panels when paying property tax on your home. They may also include exemptions on sales tax at the time of purchase.
• Tax Credits: Tax credits are dollar-for-dollar reductions (not deductions) in how much income tax you owe the government.

Federal Solar Incentives

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

The ITC applies to a solar system installed on your primary or secondary residence in the United States. The solar system must have been installed after January 1, 2006, on a property owned by you for you to claim the credit. Initially, the ITC applied to 30% of all installation costs (panels, labor, equipment and accessories), although the total amount has fluctuated slightly over the years between 26-30%. The installation date of your solar system will determine what percentage you are eligible for. There is no cap on the amount you can claim.

Talking to your local Lower Paxton solar panel installer is the best way to understand how the ITC applies to your situation.

In August 2022, the ITC (now titled the Clean Energy Credit) was expanded and extended by the passage of the Inflation Reduction Act. With the new provisions, solar installation projects that are completed between 2022 and 2032, can qualify for a 30% tax credit. This percentage will then decrease slightly each year until the end of the current Clean Energy Credit in 2035. Starting in 2023, it will also be easier to get credits for energy storage systems under the new laws.

More information about the new Inflation Reduction Act can be found here. Your local Lower Paxton 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

Rebates, tax credits and more can be claimed at multiple levels. Along with federal solar incentives, there are often state and local ones, too. Incentives might be provided by your county or municipality, or by the state of Pennsylvania. Certain incentives may be available for only a limited time, while others are ongoing.

Next Steps for Installing Solar in Lower Paxton

There are many kinds of solar incentives: those provided by local utility companies, those given by the Pennsylvania government and those given by the federal government, to name a few. Solar energy use has increased tremendously in the last 15 years, partially due to these incentives. Your local Lower Paxton solar panel installation expert can provide you with more details about which incentives you should apply for, and get you on track to switch to renewable energy today.