2023 Solar Incentives Guide for Pequea, PA - Tax Credits & Rebates
In this guide, we'll cover the latest solar incentives and rebates available in Pequea.
You'll learn about:
- Local & State Solar Incentives
- Federal Tax Credits (Updated for 2023 and beyond)
- Ways to optimize your solar investment
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Updated September 15, 2023
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What Solar Tax Credits, Incentives, and Rebates are Available in Pequea?
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
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
Refrigerator: $75
Clothes Washer: $25- $50
Clothes Dryer: $50
Freezers: $25
Dehumidifiers: $25
Fridge/Freezer Recycling: $50
HVAC
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
Others
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
Source: https://www.dsireusa.org/
Solar incentives are designed to mitigate the cost of installing solar panels on your home. Financial incentives like these are in place to encourage more Americans to make the switch to renewable energy. Incentives may include things like discounts, cash back or credit towards your monthly utility bill. Some incentives are provided by the federal government, while others are offered by the Pennsylvania government or by your specific utility company, county or municipality. Categories of solar incentives include:
- Rebates: A rebate is a partial refund after the purchase of your solar panels. These might be offered by your local utility company, your state or your county. The discount that rebates offer is normally applied to the price of solar panels before calculating tax credits.
- Tax Exemptions: Your solar panels 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 exclude the added value of the solar panels when calculating property taxes on your house.
- Net Metering: Make sure you speak with your Pequea 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 might receive either a dollar-for-dollar credit or a percentage of the value.
- Solar Renewable Energy Certificate (SREC): SRECs and similar performance-based incentives are generally handled by your state government. Once your solar panel system meets a predetermined threshold (usually a small amount of energy production), you can receive SRECs that can then be sold to your utility company or other buyers. The money you receive is generally considered part of your taxable income.
- Tax Credits: Unlike tax deductions, tax credits are dollar-for-dollar reductions in the amount of income tax that you owe the government.
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Federal Solar Incentives
When you think about solar incentives, you likely think of federal incentives first. You've likely heard of the Federal Solar Investment Tax Credit, or ITC. This is a tax credit equal to a specified percentage of the money you spend installing solar panels.
The ITC can be applied to solar panels installed after January 1, 2006 on a primary or secondary residence in the United States that you own. Originally, the tax credit was for 30% of the total cost — for panels, accessories, labor and equipment — although the percentage may range from 26-30%, depending on when your solar project was undertaken. There is no cap on the amount you can claim.
Wondering how the ITC applies to your specific situation? Contact your local Pequea solar panel installer to get more information.
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 runs until 2035. Solar installation projects started after January 1, 2022 and completed by the end of 2032 may qualify for a 30% tax credit; this amount will be decreased slightly each year until the end of the current program. Starting in 2023, it will also be easier to get credits for energy storage systems under this new program.
Click here to learn more about the new Inflation Reduction Act. To better understand how the new Clean Energy Credit will apply to you, speak with your local Pequea solar installation expert.
State & Local Solar Incentives
Some solar incentives may be offered at the local or state level. As with federal incentives, these could include tax credits, rebates and more. These incentives — which may be provided by your county or municipality, or by the state of Pennsylvania — may be offered for only a limited time, or on an ongoing basis.
Next Steps for Installing Solar in Pequea
There are many kinds of solar incentives: those given by local utility companies, those given by the Pennsylvania government and those given by the federal government, to name a few. Solar energy utilization has grown enormously in the last 15 years, partially due to these incentives. Speaking with your local Pequea solar panel installation company is the right first step towards making sure you get all the incentives you qualify for when you switch to solar energy.
EcoWatch's Pequea, PA Solar Incentives FAQs
How can I learn if I qualify for certain solar incentives?
It's a good idea to talk to your local Pequea solar installer to get an understanding of which incentives your project may qualify for. Generally, solar incentives apply to new solar systems installed on a property you own (in the U.S.) within a specified date range. Some incentives, like those provided by the Pennsylvania government, might have other requirements.
How much can I save on my electric bill annually if I add solar panels to my house in Pequea?
When you add solar panels to your home in Pequea, you can expect to save about $749.61 per year, or about $14,242.56 over the next 20 years.
What are some environmental benefits of adding solar panels to my home?
You can reduce your carbon footprint by 250 pounds of CO2 a year when you switch to solar panels. This adds up to roughly 5,000 pounds over 20 years. In addition, solar power is a renewable energy source, which means that switching your home over lessens the drain on our planet's resources.
I want to trade in my old appliances for ones that are more energy-efficient. Are there any credits I can apply for?
The new Inflation Reduction Act creates several new financial incentives that are available when you make eco-friendly improvements to your home. More details on these incentives, including information about incentives for purchasing new appliances, can be found here.
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 may vary depending on which incentives you are eligible for but in most cases yes, you can claim multiple types of incentives for your solar project. Check with your solar installer or a local tax professional to be sure you are claiming all possible incentives and applying them in the correct order.
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.