2023 Solar Incentives Guide for Rapho, PA - Tax Credits & Rebates

What Solar Tax Credits, Incentives, and Rebates are Available in Rapho?

Source: https://www.dsireusa.org/

Solar incentives are designed to encourage people to switch their home over to renewable energy by providing financial incentives that lower the burden of solar panel installation and use. You might be eligible for various types of incentives, such as discounts, cash back or credit towards your monthly utility bill, depending on your situation. Some incentives come from your specific utility company, county or municipality, some from the state of Pennsylvania and others from the federal government. Types of solar incentives might include:

• Rebates: A rebate is a partial refund credited to your account after you've paid for your solar panels. These may be offered by your local utility company, your state or your county. The cash back that you get from the rebates is normally applied before tax credits are calculated.
• Net Metering: Net metering factors in once your solar panels are up and running. If you've signed a net metering agreement with your Rapho utility company, the company will subtract the value of the excess energy your solar system produces from your utility bill each month. In some areas, this is a dollar-for-dollar credit, while in other places you may make back a percentage of the value.
• Tax Credits: Tax credits are dollar-for-dollar reductions that lower the amount of income tax you owe the federal government. (This is different from a tax deduction.)
• Solar Renewable Energy Certificate (SREC): SRECs and similar other performance-based incentives might be available to you if you have a solar system that produces over a specified (typically small) amount of electricity. This category of incentives is 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 usually considered part of your taxable income.
• Tax Exemptions: Tax exemptions can come in two forms. First, there is sales tax exemption, 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 home.

Federal Solar Incentives

Federal incentives are the kind of incentives that you are most likely to have heard of. The solar incentive that you're most likely to have heard of is the Federal Solar Investment Tax Credit (ITC), which gives you a credit on your taxes equal to a percentage of the cost of your solar system.

The ITC originally covered 30% of the cost of installing a solar system, 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 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 systems installed after January 1, 2006 on your primary or secondary residence. The residence must be owned by you and in the United States.

To know exactly how much money the ITC could save you, talk to your local Rapho solar panel installer.

In August 2022, the Inflation Reduction Act made revisions to the ITC, now titled the Clean Energy Credit. For solar system installations that begin after January 1, 2022 and are completed by the end of 2032, homeowners can apply for a credit equal to 30% of the total cost. After 2033, the percentage will decrease annually until the Clean Energy Credit ends in 2035. The expansion also makes credits for energy storage systems even easier to claim, beginning in 2023.

More information about the new Inflation Reduction Act can be found here. The best way to fully understand how the new Clean Energy Credit will apply to you is to speak with your local Rapho solar panel installers directly.

State & Local Solar Incentives

Rebates, tax credits and more can be provided at multiple levels. On top of federal solar incentives, there are often state and local ones as well. 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 Rapho

The expanding number of available solar incentives has enormously increased the use of solar power nationwide over the last 15 years. You can get solar incentives from your local utility company, the federal government or the Pennsylvania government. We recommend talking to your local Rapho solar installer to learn more about these incentives and to ensure that you're getting the largest number possible for your solar system.