2023 Solar Incentives Guide for Upper Macungie, PA - Tax Credits & Rebates
In this guide, we'll cover the latest solar incentives and rebates available in Upper Macungie.
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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What Solar Tax Credits, Incentives, and Rebates are Available in Upper Macungie?
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
Clothes Washer: $25- $50
Clothes Dryer: $50
Fridge/Freezer Recycling: $50
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
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
Solar incentives are intended to encourage homeowners to switch their home over to renewable energy by offering incentives that lower the financial burden of solar panel installation and use. Various types of incentives, including discounts, cash back or credit towards your monthly utility bill, may be available to you. Some incentives may be handled by the state of Pennsylvania, by your utility company or by county or municipality, while others are federal. Categories of solar incentives include:
- Net Metering: Net metering becomes relevant after your solar panels are up and running. If you've signed a net metering agreement with your Upper Macungie utility company, it will subtract the value of the excess energy your solar system produces from your monthly utility bill. In some locations, this is a dollar-for-dollar credit, while in other places you might get 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. (This is different from a tax deduction.)
- Tax Exemptions: Tax exemptions may come in two forms. The first is sales tax exemption, which is applied at the time you purchase your solar panels. The second is property tax exemption, which allows you to ignore the added value of your solar system when paying property tax on your home.
- Rebates: Solar rebates can be offered by your local utility company, or by your county or state. These rebates are essentially cash back that is applied after you purchase solar panels and before tax credits are calculated.
- Solar Renewable Energy Certificate (SREC): Generally, solar systems that produce more than a specified (generally small) amount of electricity can qualify for SRECs or other similar performance-based incentives. SRECs and performance-based incentives in general are typically offered by your state government. You can sell SRECs to your utility company or another buyer, and the money you receive is normally considered part of your taxable income.
Federal Solar Incentives
When you hear the term "solar incentives," federal incentives may be the first thing that comes to mind. It's likely that you've heard of the Federal Solar Investment Tax Credit, or ITC. This is a tax credit that reduces your taxes by a specified percentage of the money you spend installing solar panels.
The ITC covers solar systems installed after January 1, 2006 and allows you to deduct from your taxes a percentage of the total cost of solar panels, labor, equipment and accessories. You can claim this credit for solar panels installed on a primary or secondary residence that you own in the United States. 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.
Curious how the ITC might apply to your specific situation? Contact your local Upper Macungie solar panel installation expert to get more information.
In August 2022, the Inflation Reduction Act made revisions to the ITC, now called the Clean Energy Credit. The Clean Energy Credit has increased the current credit up to 30% for solar installation projects started after January 1, 2022 and completed by the end of 2032. After this, the credit percentage will see a slight decrease annually until the end of the program in 2035. The expansion to the program also makes claiming credit for energy storage systems easier than ever before, starting in 2023.
More information about the new Inflation Reduction Act can be found here. The easiest way to fully understand how the new Clean Energy Credit will apply to you is to talk with your local Upper Macungie solar panel company.
State & Local Solar Incentives
There are more than just federal solar incentives; rebates, tax credits and more may be offered at the state and local level. These solar incentives — which might be given by the state of Pennsylvania, or by your county or municipality — may be offered for only a limited time, or on an ongoing basis.
Next Steps for Installing Solar in Upper Macungie
There are a variety of solar incentives: those offered by the federal government, those offered by the Pennsylvania government and those offered by local utility companies, to name a few. The use of solar energy has grown tremendously in the last 15 years, thanks to these incentives. Reach out to your local solar panel installation company today to discover more about the various programs and to save as much money as possible on a solar system for your Upper Macungie home.
EcoWatch's Upper Macungie, PA Solar Incentives FAQs
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