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

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

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

Solar incentives are designed to encourage homeowners to switch their home over to renewable energy by providing financial incentives that lower the burden of solar panel installation and use. These incentives could include cash back, upfront discounts or credit towards your monthly utility bill. Some incentives are handled by the federal government, some by the state of Pennsylvania and some by your utility company, county or municipality. Some broad categories of solar incentives include:

• Rebates: A solar rebate is a partial refund given after you've purchased your solar system. Rebates might be offered by your local utility company, your county or your state. The discount that rebates offer is normally applied to the price of solar panels before calculating tax credits.
• Solar Renewable Energy Certificate (SREC): SRECs can be sold to your utility company (or other buyers) for cash that is generally considered part of your taxable income. Generally, you must meet a certain (small) threshold of energy production before your solar system can earn SRECs or similar performance-based incentives. SRECs and similar incentives are normally handled at the state level.
• Tax Exemptions: Sales tax exemptions are applied at the time of purchase for your solar panels. Property tax exemptions let you exclude the value added by your solar system when calculating how much property tax you need to pay.
• Net Metering: Net metering is an incentive you can get once your solar panels are up and running. If you have a net metering agreement with your South Londonderry utility company, the company will subtract the value of the excess energy produced by your solar system from your monthly utility bill. In some locations, this is a dollar-for-dollar credit, while in other areas you may be refunded 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. (A tax credit is different from a tax deduction.)

Federal Solar Incentives

Federal incentives are the kind of incentives that you are most likely to have some familiarity with. The Federal Solar Investment Tax Credit, or ITC, is the most well-known federal solar incentive. The ITC provides a tax credit for a set percentage of the cost of your solar system.

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, labor, accessories and equipment. You can receive this credit for solar panels installed on a primary or secondary residence that you own in the United States. The original claim amount was 30% of the total cost, although depending on when the project was completed, your credit may range from 26-30%. There is no maximum claim amount.

Have questions about how the ITC applies to your specific situation? Contact your local South Londonderry solar panel installer to get more information.

The ITC has been renewed and expanded following 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 equal to 30% of the total solar system installation costs for projects started after January 1, 2022 and completed before the end of 2032. The percentage will then begin to decrease annually until the Clean Energy Credit expires in 2035. The program expansion also makes it easier to get credit for energy storage systems, beginning in 2023.

Click here to learn more about the new Inflation Reduction Act. To best understand how the new Clean Energy Credit will apply to you, reach out to your local South Londonderry solar installation expert.

State & Local Solar Incentives

Some solar incentives are often also provided by state and local governments. Like with federal incentives, these might include rebates, tax credits and more. Certain incentives are offered for only a limited time, while others are ongoing. These local incentives may come from the Pennsylvania government, or from your specific county or municipality.

Next Steps for Installing Solar in South Londonderry

Solar incentives may come from the federal government, the Pennsylvania government or your local utility company. The large number of available incentives has contributed to a large increase in solar energy use in the last 15 years. Speaking with your local South Londonderry solar panel installation expert is a great first step towards getting all the incentives you qualify for when you switch to solar energy.