2023 Solar Incentives Guide for Mechanicsburg, PA - Tax Credits & Rebates
In this guide, we'll cover the latest solar incentives and rebates available in Mechanicsburg.
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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Updated May 04, 2023
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What Solar Tax Credits, Incentives, and Rebates are Available in Mechanicsburg?
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
Refrigerator: $75
Clothes Washer: $25- $50
Clothes Dryer: $50
Freezers: $25
Dehumidifiers: $25
Fridge/Freezer Recycling: $50
HVAC
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
Others
Solar Water Heat: $500
Heat Pump Water Heater: $500
Home Energy Audit: $250
Lighting: Available as in-store discount in participating stores
Adams Electric Cooperative - Energy Efficiency Loan Program
Federal Residential Renewable Energy Tax Credit
Source: https://www.dsireusa.org/
Solar incentives encourage people to switch to renewable energy by providing incentives that lower the financial burden of solar panel installation and use. The incentives may include cash back, upfront discounts or credit towards your monthly utility bill. Some incentives are given by the federal government, some by the Pennsylvania government and some by your utility company, county or municipality. Some broad categories of solar incentives include:
- Net Metering: Net metering is an incentive you can get once your solar system is up and running. If you've signed a net metering agreement with your Mechanicsburg utility company, they will subtract the value of the excess energy produced by your solar system from your monthly utility bill. 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: Different from tax deductions, tax credits are dollar-for-dollar reductions in the amount of income tax that you owe the federal government.
- Solar Renewable Energy Certificate (SREC): SRECs and other similar performance-based incentives are usually handled by your state government. Once your solar panel system meets the qualification threshold (generally a small amount of energy production), you are eligible to receive SRECs that can then be sold to your utility company or other buyers. The money you make is generally considered part of your taxable income.
- Rebates: A solar rebate is a partial refund after the purchase of your solar panels. Rebates might be offered by your local utility company, your county or your state. The rebates are usually applied before tax credits are calculated.
- Tax Exemptions: Sales tax exemptions are effective at the time of purchase for your solar panels. Property tax exemptions allow you to exclude the value added by your solar system when you calculate the amount of property tax you need to pay on your home.
Federal Solar Incentives
When people think of solar incentives, federal incentives may be the first thing that comes to mind. An incentive that most people are likely to be familiar with is the Federal Solar Investment Tax Credit (ITC). The ITC is a tax credit for a specified percentage of your solar system's cost.
The ITC can be applied to solar panels installed on your primary or secondary residence in the United States. The solar system has to have been installed on a property you own after January 1, 2006 for you to claim the credit. The ITC initially covered 30% of all costs (panels, accessories, labor and equipment), although the covered amount has fluctuated over the last few 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 claim amount.
Your local Mechanicsburg solar panel installation expert can provide you with more information about the ITC and how it may apply to your situation.
The Inflation Reduction Act, passed in August 2022, made some changes to the ITC (as well as retitling it the Clean Energy Credit). The Clean Energy Credit runs until 2035. Any solar installation project that is completed between January 1, 2022 and December 31, 2032 may qualify for a 30% tax credit; the amount will decrease slightly each year until the end of the current program. Starting in 2023, the expansion will also make it easier to get credit for energy storage systems.
Click here to learn more about the new Inflation Reduction Act. The easiest way to learn more about how the new Clean Energy Credit might apply to you is to reach out to your local Mechanicsburg solar panel installation expert with your questions.
State & Local Solar Incentives
There are often state solar incentives available in addition to federal ones. Tax credits, rebates and more may be available at a more local level. The incentives — which may be handled by your county or municipality, or by the state of Pennsylvania — may be offered on an ongoing basis, or for only a limited time.
Next Steps for Installing Solar in Mechanicsburg
The variety of solar incentives available has helped tremendously increase the adoption of solar energy nationwide over the last 15 years. You can get solar incentives from the federal government, the Pennsylvania government or from your local utility company. Your local Mechanicsburg solar panel installation expert can help you learn more about which incentives you might qualify for, and get you started on the path to switching to renewable energy today.
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EcoWatch's Mechanicsburg, PA Solar Incentives FAQs
If I already have a solar system installed on my house, can I still claim incentives?
You should plan to talk to a representative from the company that installed your solar system — or reach out to a local Mechanicsburg solar installer — to learn about which incentives you may qualify for. If your solar panels were installed after January 1, 2022, you likely qualify for the recently increased 30% tax credit under the Inflation Reduction Act. Solar panels installed between 2006 and 2021 may qualify for a tax credit of 26-30%.
How much will solar panels save me annually on my electric bill in Mechanicsburg?
Once you add solar panels to your Mechanicsburg home, you can expect to save about $766.23 per year, or about $14,558.45 over the next 20 years.
What are the best solar panel installation companies near me?
To learn about the top solar panel installation companies near you, read our article on Mechanicsburg's top solar panel companies.
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 qualify for incentives both towards the up-front cost of solar panels, and later as reimbursement?
Yes, you can claim both rebates and tax credits towards the cost of your solar panels. Depending on which incentives you are applying for, they may apply in a different order. Be sure to speak with your solar installer or a local tax professional to confirm that you are claiming incentives correctly and that you're getting the most money you can.
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.