2024 Solar Incentives Guide for Philadelphia, PA - Tax Credits & Rebates
In this guide, we'll cover the latest solar incentives and rebates available in Philadelphia.
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 Philadelphia?
High Performance Buildings Incentive Program
Commercial loans/loan guarantees: $2 million
Grants: Lesser of 10% of project costs or $500,000
City of Philadelphia - Solar Rebate Program
Commercial: $0.10 per watt of solar installed
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
City of Philadelphia - Streamlined Solar Permitting and Fee Reduction
Federal Residential Renewable Energy Tax Credit
Source: https://www.dsireusa.org/
The term "solar incentives" refers broadly to financial incentives implemented by the government and by solar companies to encourage people to use renewable energy by making the installation and use of solar panels more affordable. Incentives might include things like discounts, cash back or credit towards your monthly utility bill. Some incentives are offered federally, while others are provided by the state of Pennsylvania or your specific utility company, county or municipality. Categories of solar incentives include:
- Solar Renewable Energy Certificate (SREC): SRECs and similar other performance-based incentives may be available to you if you have a solar system that produces more than a specified (typically small) amount of electricity. Performance-based incentives are typically handled by the state government. You can sell any SRECs you have to your utility company or other buyers, and the money you receive in return is typically considered part of your taxable income.
- Tax Exemptions: These may come in the form of property tax exemptions, which can let you ignore the value of your solar system when calculating the taxes you pay on your home. They may also include exemptions on sales tax at the time of purchase.
- Rebates: Your solar installer might help you claim a rebate, or partial refund after purchase, for your solar system. 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 any tax credits are calculated.
- Tax Credits: Tax credits are dollar-for-dollar reductions in the amount of income tax that you owe the government. (This is different from a tax deduction.)
- Net Metering: You can sign a net metering contract with your Philadelphia utility company. This agreement may apply to all or a percentage of the excess electricity that is generated by your solar panels. They will then subtract this value from your utility bill each month.
Best National Provider
SunPower
- Most efficient panels on the market
- National coverage
- Cradle to Cradle sustainability certification
- Great warranty coverage
- Expensive
- Customer service varies by local dealer
Best Regional Coverage
Momentum Solar
- Great warranty coverage
- Representatives are experts on local policies
- Concierge service ensures steady communication
- Slightly limited service offerings
Best for Leasing
Sunrun
- Expansive service area
- Many financing options
- Some reported issues with customer service
- Some reported issues with door-to-door sales
Federal Solar Incentives
Federal solar incentives are likely 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 provides a credit on your taxes equal to a predetermined percentage of your solar system's cost.
The ITC can be applied to solar systems installed after January 1, 2006, and under this program you can deduct from your taxes a percentage of the total cost of solar panels, accessories, labor and equipment. This credit can be claimed on a solar panel system installed on a primary or secondary residence in the United States that you own. The original amount you could claim was 30% of the total cost, although the amount you can claim may range between 26-30%. There is no maximum amount you can claim.
Talking to your local Philadelphia solar panel installation expert is the best way to learn more about how the ITC applies to you.
The Inflation Reduction Act, passed in August 2022, added more provisions to the ITC (as well as renaming it to the Clean Energy Credit). The Clean Energy Credit has increased the current credit up to 30% for solar systems installed between 2022 and 2032. After 2032, the percentage will be reduced slightly each year until the end of the program in 2035. The program expansion also makes it easier to get credit for energy storage systems, starting in 2023.
More information about the new Inflation Reduction Act can be found here. The best way to understand how the new Clean Energy Credit might apply to you is to speak with your local Philadelphia solar panel company directly.
State & Local Solar Incentives
Not all solar incentives are federal; tax credits, rebates and more may be offered at the state and local level. Some incentives are ongoing, while others are available for a limited time. They may be provided by the Pennsylvania government, or by your county or municipality.
Next Steps for Installing Solar in Philadelphia
The nationwide use of solar energy has increased enormously in the last 15 years, in part due to the increase in availability of solar incentives. You can obtain these incentives from the federal government, the Pennsylvania government or your local utility company. We recommend talking to your local Philadelphia solar installation expert to learn more about these incentives and to ensure that you're getting all the money you can for your solar system.
EcoWatch's Philadelphia, PA Solar Incentives FAQs
Who installs solar panels near me?
To discover the best solar panel installation companies near you, read our article on Philadelphia's best solar panel companies.
What are some environmental benefits of installing solar panels on my home?
You can decrease your carbon footprint by 300 pounds of CO2 annually by switching to solar panels. This adds up to approximately 5,000 pounds over 20 years. Solar is also a renewable energy source, meaning that switching your home over reduces the drain on our planet's resources.
How long until the federal solar tax credit ends?
The federal solar tax credit, formerly known as the ITC and now titled the Clean Energy Credit, is slated 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 use a combination of multiple types of renewable energy to power my home?
Yes, you can employ multiple types of renewable energy to power your home, such as a combination of geothermal and solar. You can also use both renewable energy sources and a non-renewable backup source of energy. Make sure that you discuss your proposed plan with your local Philadelphia solar panel installer, to make sure you know what you'll need and what incentives 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.