2023 Solar Incentives Guide for Middletown, PA - Tax Credits & Rebates

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

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

The phrase "solar incentives" includes a range of financial incentives designed to make installing and using solar panels more affordable. This is done to encourage people to switch to renewable energy. Different kinds of incentives, like cash back, discounts or monthly utility bill credits, might be available to you. Certain incentives may be handled by the Pennsylvania government, by your utility company or by county or municipality, while others are federal. Categories of solar incentives include:

• Rebates: Solar companies may help you claim a rebate, or partial refund after purchase, for your solar panels. States or counties will also sometimes offer limited-time rebates. Any rebates you receive will usually be deducted from the total price before tax credits are calculated.
• Solar Renewable Energy Certificate (SREC): SRECs and similar performance-based incentives are typically handled at the state level. 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 from the sale is usually considered part of your taxable income.
• Net Metering: You may be able to sign a net metering agreement with your Middletown utility company, that may apply to all or a percentage of the excess electricity that is generated by your solar panels. Your utility company will then subtract this value from your utility bill each month.
• Tax Exemptions: Tax exemptions can come in 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, which allows you to ignore the value added by your solar system when calculating property tax for your home.
• Tax Credits: These credits are dollar-for-dollar reductions (not deductions) in the amount of tax that you owe the government.

Federal Solar Incentives

Federal incentives are the kind of incentives that you are most likely to have some knowledge of. The solar incentive that you're most likely to have heard of is 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 the total cost of installing a solar system, including the panels themselves as well as equipment, accessories and labor. You can claim this credit for panels installed after January 1, 2006 on a primary or secondary residence that you own and that is located in the United States. From its original value of 30% of the total cost, the credit has fluctuated slightly between 26-30%, and you may qualify for varying percentages depending on when your project was completed. There is no maximum amount you can claim.

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

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 bolsters the current credit, increasing it up to 30% for solar systems installed between 2022 and 2032. After this, the credit percentage will decrease slightly each year until the end of the program in 2035. The expansion also makes it easier to get credit for energy storage systems, starting 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 applies to you is to speak with your local Middletown solar panel company directly.

State & Local Solar Incentives

Rebates, tax credits and more can be claimed at multiple levels. Along with federal solar incentives, there are often state and local ones, too. These incentives — which might be provided by your county or municipality, or by the state of Pennsylvania — could be offered on an ongoing basis, or for only a limited time.

Next Steps for Installing Solar in Middletown

You can qualify for solar incentives from the federal government and the Pennsylvania government, as well as from your local utility company. The increased availability of solar initiatives in the past 15 years has helped greatly increase nationwide adoption of solar energy. When you're ready to make the switch to solar energy, calling your local Middletown solar panel installation expert is a great first step.