2023 Solar Incentives Guide for Lower Salford, PA - Tax Credits & Rebates
In this guide, we'll cover the latest solar incentives and rebates available in Lower Salford.
You'll learn about:
- Local & State Solar Incentives
- Federal Tax Credits (Updated for 2023 and beyond)
- Ways to optimize your solar investment
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What Solar Tax Credits, Incentives, and Rebates are Available in Lower Salford?
High Performance Buildings Incentive Program
Commercial loans/loan guarantees: $2 million
Grants: Lesser of 10% of project costs or $500,000
Wind and Geothermal Incentives Program
Manufacturer grants: $5,000 per job created within 3 years
Loans for geothermal systems: $3 per square foot of space served up to $5 million; also limited to 50% of eligible costs for residential systems.
Loans for wind energy production projects: $5 million
Grants for wind energy production projects: $1 million
Grants for feasibility studies: 50% of cost up to $175,000
Loan guarantee grants: Up to 75% of deficient funds up to $5 million
Solar Alternative Energy Credits
High Performance Building Incentives Program
First Energy (MetEdison, Penelec, Penn Power, West Penn Power) - Residential Solar Water Heating Program
FirstEnergy (MetEdison, Penelec, Penn Power, West Penn Power) - Residential Energy Efficiency Programs
Clothes Washer: $25- $50
Clothes Dryer: $50
Fridge/Freezer Recycling: $50
HVAC tune up: $50
Furnace Fan Motor: $150
Ductless Minisplit AC : $200
Central AC: $100 - $200
Air Source Heat pump: $250 - $500
Geothermal Heat Pump: $600
Packaged Terminal AC: $75
Packaged Terminal Heat Pump: $150
Programmable Thermostat: $25
Solar Water Heat: $500
Heat Pump Water Heater: $500
Home Energy Audit: $250
Lighting: Available as in-store discount in participating stores
Federal Residential Renewable Energy Tax Credit
Solar incentives are intended to make renewable energy usage more affordable through financial incentives to help people install solar panels on their homes. You may qualify for various kinds of incentives, including discounts, cash back or monthly utility bill credits, depending on your situation. Certain incentives come from your specific utility company, county or municipality, some from the state of Pennsylvania and others from the federal government. Some solar incentives you might qualify for are:
- Net Metering: Net metering becomes relevant after your solar panels are up and running. If you have a net metering agreement with your Lower Salford utility company, it will subtract the value of the excess energy produced by your solar system from your monthly utility bill. In some areas, this is a dollar-for-dollar credit, while in other places you may receive a refund equivalent to a percentage of the value.
- Rebates: Rebates, or cash back after a purchase, are normally applied before any solar tax credits are calculated. Solar rebates might be provided by your local utility company, by your county or by your state.
- Solar Renewable Energy Certificate (SREC): SRECs are credits that can be sold to your utility company (or other buyers) for cash that typically becomes part of your taxable income. In most cases, a certain (small) threshold of energy production must be met before your solar system qualifies for SRECs or other performance-based incentives. These kinds of incentives are typically handled at the state level.
- Tax Credits: These credits are dollar-for-dollar reductions (not deductions) in how much income tax you owe the federal government.
- Tax Exemptions: Tax exemptions may come in one of two forms. The first is sales tax exemption, applied when you purchase solar panels. The second is property tax exemption. This allows you to ignore the value added by your solar system when calculating property tax for your home.
Federal Solar Incentives
When someone says "solar incentives," you probably think of federal incentives first. 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 specified percentage of your solar system's cost.
The ITC applies to the value of a solar system installed on your primary or secondary residence in the United States. The solar panels have to have been installed on a property you own after January 1, 2006 for you to claim the credit. Originally, the ITC covered 30% of all costs (panels, equipment, accessories and labor), although the amount has fluctuated 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.
To better understand how the ITC will apply to your situation, speak to your local Lower Salford solar panel installer and request more information.
The Inflation Reduction Act, passed in August 2022, expanded and extended the ITC (as well as retitling it the Clean Energy Credit). The Clean Energy Credit lasts until 2035. Solar installation projects started after January 1, 2022 and completed by the end of 2032 may qualify for a 30% tax credit; the amount will then decrease slightly on a yearly basis until the current program ends. The program expansion also makes credits for energy storage systems even easier to claim, beginning in 2023.
More information about the new Inflation Reduction Act can be found here. The best way to learn more about how the new Clean Energy Credit will apply to you is to speak with your local Lower Salford solar panel company directly.
State & Local Solar Incentives
Tax credits, rebates and more might be claimed at multiple levels. In addition to federal solar incentives, there are often state and local ones as well. Certain incentives are offered for only a limited time, while others are ongoing. These local incentives might come from the Pennsylvania government, or from your specific county or municipality.
Next Steps for Installing Solar in Lower Salford
There are many types of solar incentives: those given by local utility companies, those given by the federal government and those given by the Pennsylvania government, to name a few. The use of solar energy has increased enormously in the last 15 years, thanks to these incentives. Talking to your local Lower Salford solar panel installer is an excellent first step towards making sure you get all the incentives you qualify for when you switch to solar energy.
EcoWatch's Lower Salford, PA Solar Incentives FAQs
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