2023 Solar Incentives Guide for Lower Southampton, PA - Tax Credits & Rebates
In this guide, we'll cover the latest solar incentives and rebates available in Lower Southampton.
You'll learn about:
- Local & State Solar Incentives
- Federal Tax Credits (Updated for 2023 and beyond)
- Ways to optimize your solar investment
Solar installers are experts in maximizing your solar tax credits and rebates.
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By EcoWatch Local Advisors
Data Analysis: James Savino
Ranking Methodology: Karsten Neumeister
Updated May 04, 2023
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What Solar Tax Credits, Incentives, and Rebates are Available in Lower Southampton?
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
Federal Residential Renewable Energy Tax Credit
Solar incentives are designed to make renewable energy usage more affordable through financial incentives to help people install solar panels on their homes. You might be eligible for different kinds of incentives, such as 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 Pennsylvania government and others from the federal government. Categories of solar incentives include:
- Tax Exemptions: Your solar system may qualify for exemptions on both sales and property tax. Sales tax exemptions are effective at the time of purchase. Property tax exemptions allow you to exclude the value added by your solar panels when calculating property taxes on your home.
- Rebates: Rebates, or partial refunds after a purchase, are usually given prior to any solar tax credits being calculated. These rebates can be given by your local utility company, by your state or by your county.
- Net Metering: Net metering factors in after your solar system is up and running. If you have a net metering agreement in place with your Lower Southampton utility company, they will subtract the value of the excess energy your solar system produces from your utility bill each month. In some locations, this credit is dollar-for-dollar, while in other places you may receive a refund equivalent to a percentage of the value.
- Tax Credits: Tax credits are dollar-for-dollar reductions in the amount of income tax that you owe the government. (A tax credit is different from a tax deduction.)
- Solar Renewable Energy Certificate (SREC): In general, solar systems that produce more than a specified (normally small) amount of electricity can qualify for SRECs or similar performance-based incentives. SRECs and the like are typically offered at the state level. When you receive an SREC, you can sell it to your utility company or another buyer, and generally the money you make is normally considered part of your taxable income.
Federal Solar Incentives
When people think of solar incentives, federal incentives are likely the first thing that comes to mind. The solar incentive that you may be most familiar with is the Federal Solar Investment Tax Credit (ITC), which provides a credit on your taxes equal to a predetermined percentage of your solar system's cost.
The ITC applies to a solar system installed on your primary or secondary residence in the United States. The solar panels have to have been installed after January 1, 2006 on a property owned by you for you to claim the credit. Originally, the ITC covered 30% of all costs (panels, accessories, labor and equipment), although this amount has fluctuated over the last few years between 26-30%. The amount you qualify for will depend on when your solar system was installed. There is no cap on the amount you can claim.
To better understand how the ITC will apply to you, speak to your local Lower Southampton solar panel installer and request more information.
The Inflation Reduction Act, passed in August 2022, made some changes to the ITC (as well as retitling it the Clean Energy Credit). Under the new program, solar installation projects started after January 1, 2022 and completed by the end of 2032 may be eligible for a 30% tax credit. This credit amount will then see a slight annual decrease until the end of the current Clean Energy Credit in 2035. The 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 fully understand how the new Clean Energy Credit applies to you is to speak with your local Lower Southampton solar panel installation expert directly.
State & Local Solar Incentives
Rebates, tax credits and more might be provided at multiple levels. In addition to federal solar incentives, there are often state and local ones, too. Certain incentives are ongoing, while others might only be available for a limited time. These incentives may be offered by your county or municipality, or by the Pennsylvania government.
Next Steps for Installing Solar in Lower Southampton
You can receive 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. Your local Lower Southampton solar panel installation expert can give you more information about which incentives you can apply for, and get you on track to switch to renewable energy today.
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EcoWatch's Lower Southampton, PA Solar Incentives FAQs
How do I learn if I qualify for specific solar incentives?
It's a good idea to talk to your local Lower Southampton solar installer for a better understanding of which incentives your project may qualify for. Generally, solar incentives apply to new solar systems installed on property you own (in the U.S.) within a specified date range. Some incentives, like those given by the state of Pennsylvania, might have additional requirements.
My home already has solar panels installed. Are there any incentives that I qualify for?
If your solar system was installed after January 1, 2022, you may qualify for the recently increased 30% tax credit under the Inflation Reduction Act. If your system was installed between 2006 and 2021, you might qualify for a tax credit between 26% and 30%, depending on the exact installation date. Speaking with the company that installed your system, or any local Lower Southampton solar installer, can help you understand what incentives you qualify for.
How much can I save annually on my electric bill if I install solar panels on my house in Lower Southampton?
On average, Lower Southampton homeowners who install solar panels save approximately $809.47 per year, or approximately $15,379.89 over 20 years after they make the switch.
When does the federal solar tax credit end?
The Clean Energy Credit (formerly called the federal solar tax credit, or the ITC), currently ends on January 1, 2035. Currently set at 30%, the credit will drop to 26% in 2033 and to 22% in 2034.
Can I apply for incentives both towards the up-front cost of solar panels, and later as reimbursement?
The order your incentives will be applied in could vary depending on which incentives you are claiming but generally yes, you can receive multiple types of incentives for your solar project. Check with your solar installer or a local tax professional to be sure you are claiming all possible incentives and applying them in the correct order.
Our goal is to reach as many people as we can with sensible solutions like solar energy. Our team of full-time local researchers collects solar price and installation data for every city in America then compiles it to create these digestible city guides. If you want to read our solar expert's opinion on the top solar companies featured here, follow this link.
Solar incentive research was conducted by Melissa Smith and Karsten Neumeister. Local data analysis was conducted by James Savino. See something we missed or could do better? Email the editor.