2025 Solar Incentives Guide for West Chester, PA - Tax Credits & Rebates
In this guide, we'll cover the latest solar incentives and rebates available in West Chester.
You'll learn about:
- Local & State Solar Incentives
- Federal Tax Credits (Updated for 2024 and beyond)
- Ways to optimize your solar investment
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What Solar Tax Credits, Incentives, and Rebates are Available in West Chester?
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
Source: https://www.dsireusa.org/
Solar incentives are designed to make renewable energy usage more affordable through financial incentives to help people install solar panels on their homes. Various kinds of incentives, such as cash back, discounts or credit towards your monthly utility bill, may be available to you. Certain incentives may be handled by the state of Pennsylvania, by your utility company or by county or municipality, while other incentives are federal. You might qualify for any of the following types of solar incentives:
- Net Metering: Net metering factors in after your solar panels are up and running. If you have in place a net metering agreement with your West Chester utility company, it will subtract the value of the excess energy produced by your solar system from your monthly utility bill. In some areas, this is a dollar-for-dollar credit, while in other places you might make back a percentage of the value.
- Tax Credits: Tax credits decrease, dollar-for-dollar, the total amount of tax you owe the federal government. Tax credits are different from tax deductions.
- Tax Exemptions: Tax exemptions may come in one of 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 value added by your solar system when paying property tax on your house.
- Rebates: Rebates, or cash back after a purchase, are typically applied prior to any solar tax credits being calculated. These rebates can be given by your local utility company, by your county or by your state.
- Solar Renewable Energy Certificate (SREC): SRECs and other performance-based incentives may be available to you if the solar system on your home produces more than a specified (generally small) amount of electricity. Performance-based incentives are generally handled by the state government. You can sell the SRECs you receive to your utility company or other buyers, and the money you receive in return is normally considered part of your taxable income.
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 probably the best-known federal solar incentive. The ITC provides 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 solar system installation, although it has fluctuated slightly over the last few years between 26-30%. The installation date of your solar system will determine what percentage you qualify for. The total installation cost includes the panels themselves as well as the cost of accessories, labor and equipment. 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.
Wondering how the ITC applies to your specific situation? Reach out to your local West Chester solar panel installer to get more information.
In August 2022, the Inflation Reduction Act made revisions to the ITC, now titled the Clean Energy Credit. The new Clean Energy Credit now runs until 2035. You can now receive a 30% credit for solar systems installed between January 1, 2022, and December 31, 2032. This credit will then see a slight annual decrease until it expires. Starting in 2023, it will also be easier to qualify for credits for energy storage systems under this new program.
Click here to learn more about the new Inflation Reduction Act. Your local West Chester solar panel company can answer your questions and explain how the new Clean Energy Credit may apply to you.
State & Local Solar Incentives
Some solar incentives may be offered at the local or state level. Similar to federal incentives, these could include tax credits, rebates and more. These incentives — which might be handled by the state of Pennsylvania, or by your county or municipality — might be offered on an ongoing basis, or for only a limited time.
Next Steps for Installing Solar in West Chester
Solar incentives can be offered by the Pennsylvania government, the federal government or your local utility company. The growing number of available solar incentives has facilitated the nationwide growth of solar energy use in the last 15 years. If you're ready to make the switch to solar energy, getting in touch with your local West Chester solar panel installation expert is an excellent place to start.
EcoWatch's West Chester, PA Solar Incentives FAQs
How do I learn if I qualify for different solar incentives?
It's a smart idea to get in touch with your local West Chester solar installer to get an understanding of which incentives your project will qualify for. Typically, solar incentives apply to new solar panel systems installed on a property you own (in the U.S.) within a specified date range. Some incentives, like those given by the state of Pennsylvania, may have other requirements.
If I installed solar panels on my house a few years ago, can I still claim incentives?
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 your system was installed between 2006 and 2021, you may qualify for a tax credit between 26% and 30%, depending on the year it was installed. Talking to the company that installed your solar system, or any local West Chester solar installer, can help you learn what incentives you might want to apply for.
I want to switch my appliances out for ones that are more energy-efficient. Are there any credits I can get?
The new Inflation Reduction Act includes provisions for a number of incentives that reward homeowners who make eco-friendly upgrades. Some of these incentives include tax credits and rebates for installing new electric appliances. You can find more details about these incentives here.
Can I apply for incentives both towards the up-front cost of solar panels, and later as reimbursement?
The order your incentives will be applied in may vary depending on which incentives you are eligible for but generally yes, you can receive multiple types of incentives for your solar project. Get in touch with your solar installer or a local tax professional to verify you are claiming all the incentives you're eligible for and applying them in the correct order.
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