2023 Solar Incentives Guide for Middletown, PA - Tax Credits & Rebates
In this guide, we'll cover the latest solar incentives and rebates available in Middletown.
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 September 15, 2023
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What Solar Tax Credits, Incentives, and Rebates are Available in Middletown?
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
Source: https://www.dsireusa.org/
Solar incentives are designed to mitigate the cost of installing solar panels on your home. These financial incentives are in place to encourage more Americans to switch their home over to renewable energy. The incentives can include cash back, upfront discounts or credit towards your monthly utility bill. Some incentives are offered by the federal government, some by the state of Pennsylvania and some by your specific utility company, county or municipality. You might qualify for any of the following types of solar incentives:
- Tax Credits: Tax credits are dollar-for-dollar reductions that lower the amount of income tax you owe the government. (A tax credit is different from a tax deduction.)
- Tax Exemptions: Tax exemptions can come in one of two forms. First, there is sales tax exemption, which is applied at the time you purchase your solar panels. The second is property tax exemption. This allows you to ignore the added value of your solar system when paying property tax on your house.
- Solar Renewable Energy Certificate (SREC): SRECs and similar performance-based incentives are typically handled by your state government. Once your solar system meets the qualification threshold (usually a small amount of energy production), you are eligible to receive SRECs that you can then sell to your utility company or other buyers. The money you make is generally considered part of your taxable income.
- Net Metering: Don't forget to speak to your Middletown utility company about signing a net metering contract. This allows you to receive credit towards your monthly utility bill for the value of excess energy your solar panels generate. You could receive either a dollar-for-dollar credit or a percentage of the value.
- Rebates: Solar rebates may be offered by your local utility company, or by your county or state. These rebates are essentially partial refunds that are applied after you pay for solar panels and before tax credits are calculated.
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Federal Solar Incentives
Federal incentives are the type of incentives that you are most likely to have some knowledge of. The solar incentive that you may be most familiar with is the Federal Solar Investment Tax Credit (ITC), which gives you a credit on your taxes equal to a predetermined percentage of your solar system's cost.
The ITC applies to solar panels installed after January 1, 2006 on a primary or secondary residence that you own in the United States. The credit initially covered 30% of the total cost — for panels, labor, equipment and accessories — although that amount may range from 26-30%, depending on when your solar project was undertaken. There is no cap on the claim amount.
To better understand how the ITC might apply to you, contact your local Middletown solar panel installation expert and ask for more information.
The Inflation Reduction Act, passed in August 2022, added more provisions to the ITC (as well as retitling it the Clean Energy Credit). Under the new program, solar installation projects begun after January 1, 2022 and finished by December 31, 2032 may be eligible for a 30% tax credit. This credit amount will then decrease slightly each year until the current Clean Energy Credit expires in 2035. Starting in 2023, the expansion will also make it easier to get credit for energy storage systems.
More information about the new Inflation Reduction Act can be found here. The best way to understand how the new Clean Energy Credit will apply to you is to get in touch with your local Middletown solar panel installation expert.
State & Local Solar Incentives
Rebates, tax credits and more might be claimed at multiple levels. Along with federal solar incentives, there are often state and local ones, too. The incentives — which may be given by your county or municipality, or by the state of Pennsylvania — may be offered for only a limited time, or on an ongoing basis.
Next Steps for Installing Solar in Middletown
The large number of available solar incentives has contributed greatly to the increase in the nationwide adoption of solar energy over the last 15 years. You may receive solar incentives from the Pennsylvania government, the federal government or your local utility company. Your local Middletown solar panel installer can give you more information about which incentives you should apply for, and get you feeling good about making the change to renewable energy today.
EcoWatch's Middletown, PA Solar Incentives FAQs
Can I claim incentives for adding solar panels to a rental property, vacation home or commercial property?
While we recommend speaking with your local solar installer and/or tax professional to best understand what solar incentives apply to you, many can be claimed on a second home, so long as that home is in the United States and owned by you. There may be additional incentives available for commercial properties specifically, depending on the details.
How can I find out if I qualify for specific solar incentives?
It's a good idea to talk to your local Middletown solar installer to get an understanding of which incentives your project will qualify for. Typically, solar incentives apply to new solar systems installed on a property you own (in the U.S.) within a specified date range. Some incentives, like those provided at the level of the Pennsylvania government, might have additional requirements.
How much will a solar system save me annually on my electric bill in Middletown?
On average, Middletown homeowners who install solar panels save about $809.47 per year, or about $15,379.89 over 20 years after making the switch.
What are the top solar panel installation companies near me?
To learn about the top solar panel installation companies near you, read our article on the best solar companies in Middletown.
When does the federal solar tax credit end?
The federal solar tax credit, previously called the ITC and now called the Clean Energy Credit, is slated to end on January 1, 2035. The current 30% credit will end in 2032, replaced by a 26% credit in 2033 and a 22% credit in 2034.
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.