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

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

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

The term "solar incentives" generally refers to financial incentives implemented by the government and by solar companies to encourage the use of renewable energy by making installing and using solar panels more affordable. You may be eligible for various types of incentives, such as discounts, cash back or credit towards your monthly utility bill, depending on your situation. Certain incentives come from your specific utility company, county or municipality, some from the Pennsylvania government and others from the federal government. Types of solar incentives might include:

• Tax Exemptions: Your solar panel system may qualify for both sales tax and property tax exemptions. Sales tax exemptions are applied at the time of purchase. Property tax exemptions let you exclude the value that solar panels add when you are calculating property taxes on your home.
• Net Metering: Net metering factors in once your solar system is up and running. If you have in place a net metering agreement with your Lower Southampton utility company, it will subtract the value of the excess energy your solar system produces from your utility bill each month. In some places, this is a dollar-for-dollar credit, while in other areas you might get refunded a percentage of the value.
• Tax Credits: Tax credits decrease, dollar-for-dollar, how much income tax you owe the federal government. Tax credits are different from tax deductions.
• 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, you must meet a certain (small) threshold of energy production before your solar system qualifies for SRECs or other performance-based incentives. These kinds of incentives are generally handled at the state level.
• Rebates: Some solar companies will help you claim a rebate, or partial refund of your purchase, for your solar system. States or counties will also offer limited-time rebates at various times. The value of a rebate will usually come off the total price before tax credits are calculated.

Federal Solar Incentives

Federal solar incentives are likely the first thing that comes to mind when thinking about solar incentives. 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 certain percentage of your solar system's cost.

The ITC can be applied to 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 receive this credit for a solar panel system installed on a primary or secondary residence in the United States that you own. The original amount you could claim was 30% of the total cost, although the amount you can claim may range between 26-30%. There is no maximum amount you can claim.

Your local Lower Southampton solar panel installer can offer more information about the ITC and how it may apply to your situation.

The Inflation Reduction Act, passed in August 2022, added more provisions to the ITC (as well as retitling it the Clean Energy Credit). Homeowners are now eligible for a credit equal to 30% of the total solar system installation costs for projects that began after January 1, 2022, and will be finished by the end of 2032. This percentage will then decrease on a yearly basis until the Clean Energy Credit ends in 2035. The program expansion also makes claiming credit for energy storage systems easier than ever before, beginning in 2023.

Click here to learn more about the new Inflation Reduction Act. Your local Lower Southampton solar panel installer can answer any questions you have and explain how the new Clean Energy Credit may apply to you.

State & Local Solar Incentives

There are often also state solar incentives in addition to those provided by the federal government. Rebates, tax credits and more can be offered at a more local level. Incentives might be handled by the state of Pennsylvania, or by your county or municipality. Certain incentives are available for only a limited time, while others are ongoing.

Next Steps for Installing Solar in Lower Southampton

Nationwide solar energy use has increased enormously in the past 15 years, in part thanks to the increase in availability of solar incentives. You might receive these incentives from the federal government, the Pennsylvania government or your local utility company. We suggest talking to your local Lower Southampton solar installation company to learn more about these incentives and to be sure that you're getting the largest number possible for your solar panels.