2025 Solar Incentives Guide for West Hanover, PA - Tax Credits & Rebates

What Solar Tax Credits, Incentives, and Rebates are Available in West Hanover?

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

Solar incentives are meant to help mitigate the cost of installing solar panels on your home. This category of financial incentives is intended to encourage more homeowners to make the switch to renewable energy. You may be eligible for different types of incentives, such as cash back, discounts or credit towards your monthly utility bill, depending on your situation. Some incentives come from your specific utility company, county or municipality, some from the Pennsylvania government and others from the federal government. Types of solar incentives might include:

• Solar Renewable Energy Certificate (SREC): SRECs are credits that can be sold to your utility company (or other buyers) for cash that is generally considered part of your taxable income. Generally, there is a small threshold of energy production to meet before your solar system can earn SRECs or similar performance-based incentives. SRECs and similar incentives are typically handled by your state government.
• Tax Credits: Tax credits reduce, dollar-for-dollar, the amount of income tax you owe the government. Tax credits differ from tax deductions.
• Net Metering: Net metering becomes relevant after your solar system is up and running. If you've signed a net metering agreement with your West Hanover utility company, the company will subtract the value of the excess energy your solar system produces from your utility bill each month. In some areas, this is a dollar-for-dollar credit, while in other areas you may make back a percentage of the value.
• Tax Exemptions: Tax exemptions may come in one of two forms. First, there is sales tax exemption, applied at the time you purchase your solar panels. The second is property tax exemption. This allows you to exclude the added value of your solar system when calculating property tax for your house.
• Rebates: Your solar installer might help you claim a rebate, or partial refund after purchase, for your solar panels. Counties or states will also sometimes offer limited-time rebates. If you receive a rebate, that amount will usually come off the total price before tax credits are calculated.

Federal Solar Incentives

Federal incentives are the type of incentives that you are most likely to have heard of. One of the incentives that most people are likely familiar with is the Federal Solar Investment Tax Credit (ITC). This incentive is a tax credit for a given percentage of the cost of your solar system.

The ITC can be applied to the total cost of installing a solar system, 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. The tax credit ranges from 26-30% of total costs depending on when your project was completed. There is no maximum amount you can claim.

Have questions about how the ITC applies to your specific situation? Reach out to your local West Hanover solar panel installation expert 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. Now, solar installation projects begun after January 1, 2022, and finished by December 31, 2032, might 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, the expansion will also make credits for energy storage systems even easier to claim.

More information about the new Inflation Reduction Act can be found here. Your local West Hanover solar panel installation expert is the best person to answer your questions about the new Clean Energy Credit and how it will apply to you.

State & Local Solar Incentives

Federal solar incentives are not your only option; rebates, tax credits and more may be offered at the local or state level. Some incentives are ongoing, while others are available for a limited time. They might be given by the Pennsylvania government, or by your county or municipality.

Next Steps for Installing Solar in West Hanover

You can qualify for solar incentives from the Pennsylvania government and the federal government, as well as from your local utility company. This increase in availability of solar initiatives over the last 15 years has helped increase solar adoption nationwide. It is a good idea to talk to your local West Hanover solar installation expert for more information about these incentives and to make sure that you're getting the largest number possible for your solar panels.