2023 Solar Incentives Guide for Paoli, PA - Tax Credits & Rebates
In this guide, we'll cover the latest solar incentives and rebates available in Paoli.
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 Paoli?
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 financial incentives put in place by solar companies and the government to encourage increased use of renewable energy by making solar panels more affordable. Different types of incentives, like discounts, cash back or credit towards your monthly utility bill, might be available to you. Some incentives may be offered by the Pennsylvania government, by your utility company or by county or municipality, while other incentives are federal. Types of solar incentives might include:
- Tax Credits: Different from tax deductions, tax credits are dollar-for-dollar reductions in the amount of income tax that you owe the government.
- Tax Exemptions: Tax exemptions can come in one of two forms. The first 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 paying property tax on your house.
- Rebates: Rebates, or cash back after a purchase, are normally applied prior to any solar tax credits being calculated. These rebates can be offered by your local utility company, by your county or by your state.
- Net Metering: Don't forget to talk with your Paoli utility company about signing a net metering contract. This will allow you to get a credit towards your monthly utility bill for the value of excess energy generated by your solar panels. You may receive either a dollar-for-dollar credit or a percentage of the value.
- Solar Renewable Energy Certificate (SREC): SRECs can be sold to your utility company (or other buyers) for cash that typically becomes part of your taxable income. Generally, you must meet a certain (small) threshold of energy production before your solar system qualifies for SRECs or other performance-based incentives. SRECs and similar incentives are normally handled at the state level.
Federal Solar Incentives
Federal solar incentives are probably the first thing that you think of when thinking about solar incentives. The Federal Solar Investment Tax Credit, or ITC, is the most well-known federal solar incentive. The ITC provides a tax credit for a specific percentage of the cost of your solar system.
The ITC initially applied to 30% of the cost of solar panel installation, and has fluctuated slightly over the last few years between 26-30%. The percentage you qualify for will depend on when your solar system was installed. 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 applies 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.
Speaking with your local Paoli solar panel installer is the best way to learn more about how the ITC may apply to you.
In August 2022, the ITC (now referred to as the Clean Energy Credit) was bolstered by the passage of the Inflation Reduction Act. For solar systems installed between January 1, 2022 and December 31, 2032, homeowners may be eligible for a credit for 30% of the total cost. This percentage will decrease annually after 2032 until the Clean Energy Credit expires in 2035. Starting in 2023, the expansion to the program will also make claiming credit for energy storage systems easier than ever before.
Click here to learn more about the new Inflation Reduction Act. The best way to fully understand how the new Clean Energy Credit might apply to you is to get in touch with your local Paoli solar panel installation expert.
State & Local Solar Incentives
Some solar incentives may be provided by state and local governments. Like with federal incentives, these may include tax credits, rebates and more. Some incentives are ongoing, while others may only be available for a limited time. Solar incentives might be offered by the Pennsylvania government, or by your county or municipality.
Next Steps for Installing Solar in Paoli
Nationwide solar energy use has gone up significantly in the past 15 years, in part thanks to the increase in availability of solar incentives. You can obtain these incentives from your local utility company, the Pennsylvania government or the federal government. Contact your local solar panel installation expert today to find out more information and to save as much money as possible on solar panels for your Paoli home.
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EcoWatch's Paoli, PA Solar Incentives FAQs
How much will a solar system save me on my electric bill in Paoli annually?
After adding solar panels to your house in Paoli, you can expect to save around $815.15 per year, or around $15,487.94 over the next 20 years.
Who installs solar panels near me?
To find the top solar panel installation companies near you, read our article on Paoli's top solar panel companies.
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 scheduled to end January 1, 2035. The current 30% credit will end in 2032, replaced by a 26% credit in 2033 and a 22% credit in 2034.
Can I apply for incentives both towards the initial cost of solar panels, and later as reimbursement?
Yes, you can claim both tax credits and rebates towards the cost of your solar panels. Depending on precisely which incentives you are receiving, they may apply in a different order. Make sure that you talk to your solar installer or a local tax professional to confirm that you are claiming the correct incentives and getting the most money you can.
Can I use a combination of multiple types of renewable energy to power my home?
You can power your home with multiple types of renewable energy, or a combination of renewable and non-renewable energy. Be sure to discuss your plan with your local Paoli solar installation expert. They can help you with the plan for your project and educate you on the various incentives that you will or won't qualify for.
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.