2023 Solar Incentives Guide for Montgomeryville, PA - Tax Credits & Rebates
In this guide, we'll cover the latest solar incentives and rebates available in Montgomeryville.
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 March 14, 2023
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What Solar Tax Credits, Incentives, and Rebates are Available in Montgomeryville?
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
The phrase "solar incentives" refers to a wide range of financial incentives put in place to make installing and using solar panels more affordable. This is done to encourage people to switch to renewable energy. Incentives may include things like discounts, cash back or credit on your utility bill each month. Some incentives are handled federally, while others are handled by the Pennsylvania government or by your utility company, county or municipality. Some broad categories of solar incentives include:
- Solar Renewable Energy Certificate (SREC): SRECs can be sold to your utility company (or other buyers) for cash that is generally considered part of your taxable income. In most cases, there is a small threshold of energy production to meet before your solar system is eligible for SRECs or other performance-based incentives. Incentives like these are normally handled at the state level.
- Net Metering: Net metering becomes relevant after your solar system is up and running. If you have a net metering agreement with your Montgomeryville utility company, the company will subtract the value of the excess energy produced by your solar system from your monthly utility bill. In some locations, this is a dollar-for-dollar credit, while in others you may make back a percentage of the value.
- Tax Exemptions: Your solar system could qualify for exemptions on both sales and property tax. Sales tax exemptions are applied at the time of purchase. Property tax exemptions let you ignore the value added by your solar panels when calculating property taxes on your home.
- Tax Credits: Unlike tax deductions, tax credits reduce, dollar-for-dollar, the amount of income tax that you owe the federal government.
- Rebates: Rebates, or partial refunds after a purchase, are typically applied before any solar tax credits are calculated. These rebates can be given by your local utility company, by your state or by your county.
Federal Solar Incentives
Federal solar incentives are likely the first thing that comes to mind when you think about solar incentives. You might have heard of the Federal Solar Investment Tax Credit, or ITC. This is a tax credit that reduces your taxes by a specified percentage of the money you spend on your solar system.
The ITC originally covered 30% of the total cost of installing solar panels, and has fluctuated slightly over the last few years between 26-30%. The installation date of your solar system will determine what percentage you qualify for. The total installation cost includes the panels themselves as well as the cost of labor, accessories and equipment. There is no maximum amount you can claim. The ITC can be applied to solar panels installed after January 1, 2006 on your primary or secondary residence. The residence must be in the United States and owned by you.
Your local Montgomeryville solar panel installer can offer more information about the ITC and how it might apply to your situation.
In August 2022, the Inflation Reduction Act made revisions to the ITC, now dubbed 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. Beginning in 2023, it will also be easier to claim credits for energy storage systems under this new program.
More information about the new Inflation Reduction Act can be found here. The easiest way to understand how the new Clean Energy Credit might apply to you is to reach out to your local Montgomeryville solar panel company with your questions.
State & Local Solar Incentives
Tax credits, rebates and more might be provided at multiple levels. In addition to federal solar incentives, there are often state and local ones, too. Incentives may be given by your county or municipality, or by the state of Pennsylvania. Some incentives might only be available for a limited time, while others are ongoing.
Next Steps for Installing Solar in Montgomeryville
Solar incentives might be offered by the Pennsylvania government, the federal government or your local utility company. The large number of available solar incentives has helped nationwide use of solar energy increase greatly in the last 15 years. Getting in touch with your local Montgomeryville solar panel installation expert is a great first step towards getting the most money possible when you switch to solar energy.
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EcoWatch's Montgomeryville, PA Solar Incentives FAQs
Can I receive any incentives when I add solar panels to a vacation home, rental property or commercial property?
Many solar incentives are intended to apply to a property you own that is located within the United States; most secondary residences fall into this category. Other solar incentives may be available for commercial properties, depending on the specifics. We recommend getting in touch with your local solar installer and/or tax professional to best understand what incentives will apply to your specific situation.
If I installed solar panels on my house a few years ago, can I still claim incentives?
You should plan to talk to a representative from the company that installed your solar panels — or speak to a local Montgomeryville solar installer — to better understand 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 systems installed between 2006 and 2021 may qualify for a tax credit of 26-30%.
How much will a solar system save me on my electric bill in Montgomeryville annually?
After adding solar panels to your house in Montgomeryville, you can anticipate savings of around $862.20 per year, or around $16,381.75 over 20 years.
What are the highest-rated solar panel installation companies near me?
To find the best solar panel installer in your area, check out our guide to Montgomeryville's top solar panel companies.
When does the federal solar tax credit end?
The Clean Energy Credit (previously called the federal solar tax credit, or ITC), is slated to end on January 1, 2035. Currently set at 30%, the credit will drop to 26% in 2033 and to 22% 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.