2023 Solar Incentives Guide for Penn, PA - Tax Credits & Rebates
In this guide, we'll cover the latest solar incentives and rebates available in Penn.
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 May 04, 2023
Why you can trust EcoWatch
What Solar Tax Credits, Incentives, and Rebates are Available in Penn?
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
Duquesne Light Company - Residential Energy Efficiency Program
Central A/C / Heat Pumps: $100/ton
ENERGY STAR Certified Heat Pump Water Heater: $350
Solar Water Heater: $300
Ceiling/Floor/Wall Insulation: $0.23/square foot
ENERGY STAR Certified Dehumidifier: $20
ENERGY STAR Certified Refrigerator: $25
ENERGY STAR Certified Freezer: $10
ENERGY STAR Certified Room Air Conditioner: $25
ENERGY STAR Variable Speed Pool Pump: $200
Occupancy Sensor Based Control: $10
Smart Strip Surge Protector: $5
Furnace with High Efficiency Fan Motor: $100
Ductless Mini-Split Heat Pump: $100
Refrigerator/Freezer Recycling: $35
Duquesne Light Company - Residential Solar Water Heating Program
First Energy (MetEdison, Penelec, Penn Power, West Penn Power) - Residential Solar Water Heating Program
FirstEnergy (MetEdison, Penelec, Penn Power, West Penn Power) - Residential Energy Efficiency Programs
Clothes Washer: $25- $50
Clothes Dryer: $50
Fridge/Freezer Recycling: $50
HVAC tune up: $50
Furnace Fan Motor: $150
Ductless Minisplit AC : $200
Central AC: $100 - $200
Air Source Heat pump: $250 - $500
Geothermal Heat Pump: $600
Packaged Terminal AC: $75
Packaged Terminal Heat Pump: $150
Programmable Thermostat: $25
Solar Water Heat: $500
Heat Pump Water Heater: $500
Home Energy Audit: $250
Lighting: Available as in-store discount in participating stores
Federal Residential Renewable Energy Tax Credit
Solar incentives help mitigate the cost of installing a solar panel system on your home. This category of financial incentives is designed to encourage more people to switch their home over to renewable energy. The incentives might include upfront discounts, cash back or credit towards your monthly utility bill. Some incentives are given 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 (not deductions) in how much in taxes you owe the federal government.
- Tax Exemptions: These might come in the form of property tax exemptions, which can let you exclude the value of your solar system when calculating the taxes you pay on your home. You may also qualify for an exemption on sales tax at the time of purchase.
- Rebates: Your solar installer might help you claim a rebate, or partial refund of your purchase, for your solar panels. Counties or states will also offer limited-time rebates at various times. If you receive a rebate, that amount will usually be deducted from your total price before tax credits are calculated.
- Solar Renewable Energy Certificate (SREC): SRECs and similar performance-based incentives might be available to you if you have a solar system that produces over a specified (generally small) amount of electricity. These types of incentives are normally handled by the state government. You can sell the SRECs you receive to your utility company or other buyers, and the money you make is normally considered part of your taxable income.
- Net Metering: Net metering becomes relevant after your solar system is up and running. If you have a net metering agreement in place with your Penn utility company, they will subtract the value of the excess energy your solar system produces from your monthly utility bill. In some locations, this is a dollar-for-dollar credit, while in other areas you might be refunded a percentage of the value.
Federal Solar Incentives
Federal solar incentives are probably the first thing that you think of when you think about solar incentives. The solar incentive that you're most familiar with is probably 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 was originally for 30% of the cost of solar panel installation, although it has fluctuated slightly over the years between 26-30%. The percentage you qualify for will depend on when your solar system was installed. The cost of installation includes the panels themselves as well as the cost of equipment, labor and accessories. 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 owned by you and in the United States.
To better understand exactly how much money the ITC could save you, talk to your local Penn solar panel installer.
The ITC was both renewed and expanded by the passage of the Inflation Reduction Act in August 2022. It's also now called the Clean Energy Credit. Homeowners can now qualify for a credit of 30% of the total costs of solar system installation for projects started after January 1, 2022 and completed before the end of 2032. The credit percentage will then begin to decrease on a yearly basis until the Clean Energy Credit ends 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. Your local Penn solar panel installation experts can answer your questions and explain how the new Clean Energy Credit may apply to you.
State & Local Solar Incentives
Tax credits, rebates and more might be claimed at multiple levels. Along with federal solar incentives, there are often state and local ones as well. The incentives — which might be provided by the state of Pennsylvania, or by your county or municipality — could be offered on an ongoing basis, or for only a limited time.
Next Steps for Installing Solar in Penn
You can apply for solar incentives from the Pennsylvania government and the federal government, as well as from your local utility company. This increase in availability of solar initiatives in the past 15 years has helped greatly increase nationwide adoption of solar energy. Call your local solar panel installation expert today to learn more and to save the most money possible on solar panels for your Penn home.
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EcoWatch's Penn, PA Solar Incentives FAQs
What if I want to add solar panels to a vacation home, rental property or commercial property? Will I still qualify for incentives?
Many solar incentives apply to a property located within the United States that you own; most secondary residences fall under this distinction. Other solar incentives may be available for commercial properties, depending on the details. We recommend reaching out to your local solar installer and/or tax professional to better understand what incentives apply to your specific situation.
How can I learn if I qualify for solar incentives?
Generally, solar incentives apply to:
- a new solar panel system
- installed on property you own
- within the U.S.
- between the dates specified by a particular incentive.
Specific incentives, including those run by the Pennsylvania government or by your county/municipality, sometimes have additional qualifications. Talk to your local Penn solar installer to learn more about what incentives your project will qualify for.
How much will a solar system save me annually on my electric bill in Penn?
When you add solar panels to your house in Penn, you can anticipate savings of approximately $647.82 per year, or approximately $12,308.62 over 20 years.
When does the federal solar tax credit end?
The federal solar tax credit, formerly called the ITC and now called the Clean Energy Credit, is scheduled 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.
I want to change out my appliances for ones that are more energy-efficient. Are there any incentives I can apply for?
The recently passed Inflation Reduction Act provides several incentives designed to reward homeowners who make eco-friendly upgrades. Some incentives include tax credits and rebates for installing new electric appliances. You can find more details about these incentives here.
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.