2023 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 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 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
The phrase "solar incentives" covers 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. The incentives could include cash back, upfront discounts or credit towards your monthly utility bill. Some incentives are provided by the federal government, some by the Pennsylvania government and some by your utility company, county or municipality. Categories of solar incentives include:
- Tax Exemptions: Sales tax exemptions are applied at the point of sale for your solar panels. Property tax exemptions let you ignore the added value of your solar system when you calculate the amount of property tax you need to pay on your house.
- Solar Renewable Energy Certificate (SREC): SRECs and similar other performance-based incentives may be available to you if your solar system produces more than a specified (generally small) amount of electricity. These types of incentives are generally handled by the state government. You can sell your SRECs to your utility company or other buyers, and the money you receive in return is usually considered part of your taxable income.
- Tax Credits: Tax credits are dollar-for-dollar reductions that lower the amount of income tax you owe the government. (A tax credit is different from a tax deduction.)
- Rebates: Rebates, or cash back after a purchase, are usually given before any solar tax credits are calculated. Solar rebates might be given by your local utility company, by your state or by your county.
- Net Metering: Net metering is an incentive you can get once your solar system is up and running. If you have a net metering agreement with your West Chester utility company, the company 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 others you may receive a refund equivalent to a percentage of the value.
Federal Solar Incentives
When thinking about solar incentives, federal incentives are likely the first thing that comes to mind. One of the incentives that most people are likely familiar with is the Federal Solar Investment Tax Credit (ITC). This is a tax credit for a given percentage of the cost of your solar system.
The ITC initially applied to 30% of the cost of installing solar panels, and 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 cost of installation includes the panels themselves as well as the cost of accessories, equipment and labor. There is no maximum claim amount. The ITC applies to solar systems installed after January 1, 2006 on your primary or secondary residence. The residence must be owned by you and in the United States.
To understand exactly how much the ITC could save you, speak with your local West Chester solar panel installation expert.
The ITC was both renewed and expanded by 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 of 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 decrease yearly until the 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.
Click here to learn more about the new Inflation Reduction Act. The easiest way to understand how the new Clean Energy Credit might apply to you is to get in touch with your local West Chester solar panel installation expert.
State & Local Solar Incentives
Some solar incentives may be provided by state and local governments. As with federal incentives, these may include tax credits, rebates and more. Certain incentives are ongoing, while others might only be available for a limited time. Solar incentives may be given by the Pennsylvania government, or by your county or municipality.
Next Steps for Installing Solar in West Chester
Solar energy use nationwide has gone up tremendously in the past 15 years, in part due to the proliferation of solar incentives. You may get these incentives from the federal government, the Pennsylvania government or your local utility company. It is a good idea to talk to your local West Chester solar installer for more information about these incentives and to make sure that you're getting the most money possible for your solar system.
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EcoWatch's West Chester, PA Solar Incentives FAQs
Can I receive any incentives when I add solar panels to a vacation home, rental property or commercial property?
Many solar incentives are intended to apply to a property you own that is located within the United States; most secondary residences will fall into this category. There may be other solar incentives available for commercial properties, depending on the specifics. We recommend talking to your local solar installer and/or tax professional to better understand what incentives will apply to your specific situation.
How do I know if I qualify for solar incentives?
Generally, solar incentives apply to:
- a new solar system
- installed on property that you own
- within the U.S.
- within the date range specified by a particular incentive.
Specific incentives, including those given out by the Pennsylvania government or by your county/municipality, could have additional qualifications. Get in touch with your local West Chester solar installer to learn more about what incentives your project will qualify for.
I already have solar panels installed. Do I qualify for any incentives?
Your best bet is to talk to a representative from the company that installed your system — or reach out to a local West Chester solar installer — to better understand which incentives you might qualify for. If your solar panels were installed after January 1, 2022, you likely qualify for the newly increased 30% tax credit under the Inflation Reduction Act. Systems installed between 2006 and 2021 may qualify for a tax credit of 26-30%.
What are the top solar panel installation companies near me?
To find a top-rated solar panel installer, check out our guide to the top solar companies in West Chester.
When does the federal solar tax credit end?
The federal solar tax credit, previously called the ITC and now called the Clean Energy Credit, is set to end on January 1, 2035. The current 30% credit will end in 2032, replaced by a 26% credit in 2033 and a 22% credit in 2034.
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.