2023 Solar Incentives Guide for Upper Merion, PA - Tax Credits & Rebates
In this guide, we'll cover the latest solar incentives and rebates available in Upper Merion.
You'll learn about:
- Local & State Solar Incentives
- Federal Tax Credits (Updated for 2023 and beyond)
- Ways to optimize your solar investment
Solar installers are experts in maximizing your solar tax credits and rebates.
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By EcoWatch Local Advisors
Data Analysis: James Savino
Ranking Methodology: Karsten Neumeister
Updated May 04, 2023
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What Solar Tax Credits, Incentives, and Rebates are Available in Upper Merion?
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
Federal Residential Renewable Energy Tax Credit
The term "solar incentives" refers to a range of financial incentives designed to make installing and using solar panels more affordable. This is done to encourage people to switch to renewable energy. You might be eligible for different kinds of incentives, including cash back, discounts or credit towards your monthly utility bill, depending on your situation. Certain incentives come from your specific utility company, county or municipality, some from the state of Pennsylvania and others from the federal government. Some broad categories of solar incentives include:
- Tax Exemptions: These could come in the form of property tax exemptions, which can let you exclude the value of your solar system when paying taxes on your home. You could also look for exemptions on sales tax at the time of purchase.
- Rebates: A solar rebate is a partial refund after the purchase of your solar panels. These could be offered by your local utility company, your county or your state. The rebates are usually applied before tax credits are calculated.
- Solar Renewable Energy Certificate (SREC): SRECs and similar performance-based incentives may be available to you if your solar system produces over a specified (usually small) amount of electricity. This category of incentives is normally handled at the state level. You can sell SRECs to your utility company or other buyers, and the money you receive in return is usually considered part of your taxable income.
- Net Metering: Net metering factors in after your solar system is up and running. If you've signed a net metering agreement with your Upper Merion utility company, it 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 places you might make back a percentage of the value.
- Tax Credits: Unlike tax deductions, tax credits reduce, dollar-for-dollar, the amount of income tax that you owe the government.
Federal Solar Incentives
When thinking about solar incentives, federal incentives are likely the first thing that comes to mind. The Federal Solar Investment Tax Credit, or ITC, is the most well-known federal solar incentive. The ITC allows you to claim a tax credit for a specific percentage of the cost of your solar system.
The ITC was originally for 30% of the total cost of installing a solar system, although it has fluctuated slightly over time between 26-30%. The percentage you qualify for will depend on when your solar system was installed. The total cost of installation includes the panels themselves as well as the cost of labor, equipment and accessories. There is no maximum claim amount. The ITC applies to solar panels installed after January 1, 2006 on your primary or secondary residence. The residence must be owned by you and in the United States.
Curious how the ITC might apply to your specific situation? Contact your local Upper Merion solar panel installation expert to get more information.
In August 2022, the Inflation Reduction Act expanded and extended the ITC, now referred to as 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 for 30% of the total cost. After 2033, the percentage will decrease annually until the Clean Energy Credit expires in 2035. Starting in 2023, the expansion to the program will also make claiming credit for energy storage systems easier than ever before.
More information about the new Inflation Reduction Act can be found here. The best way to understand how the new Clean Energy Credit applies to you is to talk with your local Upper Merion solar panel installers.
State & Local Solar Incentives
Rebates, tax credits and more might be claimed at multiple levels. On top of federal solar incentives, there are often state and local ones as well. Some incentives are ongoing, while others might only be available for a limited time. These incentives might be provided by your county or municipality, or by the Pennsylvania government.
Next Steps for Installing Solar in Upper Merion
Solar energy use nationwide has increased enormously in the last 15 years, in part due to the increase in availability of solar incentives. You may get these incentives from the federal government, the Pennsylvania government or your local utility company. Getting in touch with your local Upper Merion solar panel installation expert is the right first step towards getting all the incentives you qualify for when you switch to solar energy.
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EcoWatch's Upper Merion, PA Solar Incentives FAQs
How can I find out if I qualify for different solar incentives?
It's a smart idea to get in touch with your local Upper Merion solar installer to get an understanding of which incentives your project may qualify for. Generally, solar incentives apply to new solar systems installed on a property you own (in the U.S.) between the dates specified by the incentive. Some incentives, like those provided at the level of the Pennsylvania government, might have other requirements.
I already have solar panels. Are there any incentives that I qualify for?
If your solar system was installed after January 1, 2022, you may qualify for the newly increased 30% tax credit under the Inflation Reduction Act. If you installed your system between 2006 and 2021, you might qualify for a tax credit between 26% and 30%, depending on the exact installation date. Reaching out to the company that installed your solar system, or any local Upper Merion solar installer, can help you learn what incentives you qualify for.
How much will a solar system save me annually on my electric bill in Upper Merion?
Typically, homeowners in Upper Merion who install solar panels save around $809.23 per year, or around $15,375.40 over 20 years after they make the switch.
When does the federal solar tax credit end?
The Clean Energy Credit (previously called the federal solar tax credit, or ITC), is scheduled to end on January 1, 2035. Currently set at 30%, the credit will drop to 26% in 2033 and to 22% in 2034.
Can I apply for incentives both towards the initial cost of solar panels, and later as reimbursement?
The order in which incentives are applied might vary depending on which incentives you are eligible for but generally yes, you can claim multiple types of incentives for your solar project. Talk with your solar installer or a local tax professional to make sure you are claiming all the incentives you are eligible for and applying them in the correct order.
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.