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

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

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

Solar incentives mitigate the cost of installing a solar panel system on your home. Financial incentives like these are designed to encourage more people to make the switch to renewable energy. These incentives can include upfront discounts, cash back or credit towards your monthly utility bill. Some incentives are given by the federal government, some by the Pennsylvania government and some by your utility company, county or municipality. You might qualify for any of the following types of solar incentives:

• Tax Exemptions: Sales tax exemptions go into effect at the point of sale for your solar panels. Property tax exemptions allow you to exclude the value that your solar panels add when you calculate how much property tax you need to pay.
• Solar Renewable Energy Certificate (SREC): SRECs and other similar performance-based incentives are usually handled by your state government. Once your solar panel system meets a predetermined threshold (generally a small amount of energy production), you can receive SRECs that you can then sell to your utility company or other buyers. The money you receive is usually considered part of your taxable income.
• Net Metering: You can sign a net metering contract with your South Middleton 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 monthly utility bill.
• 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 state or your county. The cash back that you get from the rebates is normally applied before tax credits are calculated.
• 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.)

Federal Solar Incentives

When someone says "solar incentives," you probably think of federal incentives first. A federal incentive that most people are probably familiar with is the Federal Solar Investment Tax Credit (ITC). The ITC is a tax credit for a specified percentage of your solar system's cost.

The ITC applies to the total cost of installing solar panels, including the panels themselves as well as accessories, equipment and labor. You can claim this credit for panels installed after January 1, 2006 on a primary or secondary residence that you own, as long as it is located in the United States. Originally set at 30% of total costs, the credit has fluctuated over time, and you may qualify for different amounts depending on when your project was completed. There is no maximum claim amount.

Have questions about how the ITC applies to your specific situation? Get in touch with your local South Middleton solar panel installer to get more information.

In August 2022, the ITC (now titled the Clean Energy Credit) was expanded and extended by the passing of the Inflation Reduction Act. Under the new program, solar installation projects begun after January 1, 2022 and finished by December 31, 2032 can qualify for a 30% tax credit. The amount of the credit will then see a slight annual decrease until the current Clean Energy Credit expires in 2035. Starting in 2023, it will also be easier to claim credits for energy storage systems under this new program.

More information about the new Inflation Reduction Act can be found here. The easiest way to learn more about how the new Clean Energy Credit will apply to you is to get in touch with your local South Middleton solar panel company.

State & Local Solar Incentives

In addition to those provided at the federal level, there are often also state solar incentives. Tax credits, rebates and more might be available at a more local level. These incentives might be distributed by the Pennsylvania government, or by your county or municipality. Some are available for a limited time, while others are ongoing.

Next Steps for Installing Solar in South Middleton

Solar incentives may be offered by the Pennsylvania government, the federal government or your local utility company. The variety of incentives available has helped nationwide use of solar energy increase greatly in the last 15 years. Speaking with your local South Middleton solar panel installation company is the best first step towards getting the most money possible when you switch to solar energy.