2025 Solar Incentives Guide for Montgomery, PA - Tax Credits & Rebates
In this guide, we'll cover the latest solar incentives and rebates available in Montgomery.
You'll learn about:
- Local & State Solar Incentives
- Federal Tax Credits (Updated for 2024 and beyond)
- Ways to optimize your solar investment
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What Solar Tax Credits, Incentives, and Rebates are Available in Montgomery?
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/
The term "solar incentives" generally refers to financial incentives implemented by the government and by solar companies to encourage the adoption and use renewable energy by making installing and using solar panels more affordable. Incentives could include things like discounts, cash back or monthly utility bill credits. Some incentives are offered by the federal government, while others are provided by the state of Pennsylvania or your utility company, county or municipality. Categories of solar incentives include:
- Solar Renewable Energy Certificate (SREC): SRECs and other performance-based incentives are generally handled at the state level. Once your solar system meets a predetermined threshold (normally 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 receive from the sale is usually considered part of your taxable income.
- Tax Credits: Tax credits lower, dollar-for-dollar, the total amount of tax you owe the government. These are different from tax deductions.
- Tax Exemptions: Sales tax exemptions are applied at the point of sale for your solar panels. Property tax exemptions allow you to exclude the value added by your solar system when you're calculating the amount of property tax you need to pay on your home.
- Rebates: A solar rebate is a partial refund credited to your account after you've paid for your solar system. These might be offered by your local utility company, your state or your county. The rebates are usually applied before tax credits are calculated.
- Net Metering: Make sure you talk with your Montgomery utility company about signing a net metering contract. This allows you to get a credit towards your utility bill every month 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.
Federal Solar Incentives
When people think of solar incentives, federal incentives may be the first thing that comes to mind. The Federal Solar Investment Tax Credit, or ITC, is likely the most well-known federal solar incentive. The ITC provides you with a tax credit for a predetermined percentage of your solar system's cost.
The ITC can be applied 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 system was installed. There is no cap on the claim amount.
To find out exactly how much the ITC could save you, contact your local Montgomery solar panel installation expert.
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 re-raises the credit up to 30% for solar systems installed between 2022 and 2032. After this, the percentage will see a slight decrease annually until the end of the program in 2035. Beginning in 2023, it will also be easier to claim credits for energy storage systems under the new laws.
More information about the new Inflation Reduction Act can be found here. Your local Montgomery 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. Tax credits, rebates and more can be offered at a more local level. Certain incentives are ongoing, while others are available for a limited time. Incentives might be offered by the Pennsylvania government, or by your county or municipality.
Next Steps for Installing Solar in Montgomery
The variety of solar incentives available has contributed greatly to the increase in the use of solar power nationwide over the past 15 years. You can get solar incentives from your local utility company, the federal government or the Pennsylvania government. Speak with your local solar panel installation expert today to learn more and to save the most money possible on a solar system for your Montgomery home.
EcoWatch's Montgomery, PA Solar Incentives FAQs
How do I know if I qualify for solar incentives?
It's a good idea to talk to your local Montgomery solar installer for a better understanding of which incentives your project will qualify for. Usually, solar incentives apply to new solar panel systems installed on a property you own (in the U.S.) between the dates specified by the incentive. Some incentives, such as those given by the state of Pennsylvania, may have additional requirements.
What are the highest-rated solar panel installation companies near me?
To find the right solar panel installer for you, check out our guide to the top solar companies in Montgomery.
How long until the federal solar tax credit ends?
The Clean Energy Credit (previously referred to as the federal solar tax credit, or 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 initial cost of solar panels, and later as reimbursement?
The order that incentives will be applied in could vary depending on which incentives you receive 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 make sure you are claiming all the incentives you qualify for and applying them in the correct order.
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