2023 Solar Incentives Guide for West Hempfield, PA - Tax Credits & Rebates

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

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

The term "solar incentives" generally refers to financial incentives implemented by the government and by solar companies to encourage the use of renewable energy by making installing and using solar panels more affordable. You may be eligible for several 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 Pennsylvania government and others from the federal government. You might qualify for any of the following types of solar incentives:

• Tax Credits: These credits are dollar-for-dollar reductions (not deductions) in how much income tax you owe the federal government.
• Solar Renewable Energy Certificate (SREC): SRECs are credits that can be sold to your utility company (or other buyers) for money that normally counts as part of your taxable income. Typically, you must meet a certain (small) threshold of energy production before your solar system qualifies for SRECs or similar performance-based incentives. These kinds of incentives are typically handled at the state level.
• Tax Exemptions: Your solar panels may qualify for exemptions on both sales and property tax. Sales tax exemptions are applied at the time of purchase. Property tax exemptions let you ignore the added value of the solar panels when calculating property taxes on your home.
• Net Metering: You can sign a net metering agreement with your West Hempfield utility company, that may apply to all or a percentage of the excess electricity your solar panels generate. They will then subtract this value from your utility bill each month.
• Rebates: Solar companies may help you claim a rebate, or partial refund after purchase, for your solar panels. States or counties will also offer limited-time rebates at various times. If you receive a rebate, that amount will usually be deducted from the total price before any tax credits are calculated.

Federal Solar Incentives

When thinking about solar incentives, you likely think of federal incentives first. An incentive many people are likely to be familiar with is the Federal Solar Investment Tax Credit (ITC). The ITC is a tax credit for a certain percentage of the cost of your solar system.

The ITC can be applied to the total cost of installing solar panels, including the panels themselves as well as labor, accessories and equipment. 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. Originally set at 30% of total costs, the credit has fluctuated over time, and you may qualify for different amounts depending on when your project was completed. There is no maximum claim amount.

Talking to your local West Hempfield solar panel installer is the best way to understand how the ITC could apply to your situation.

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. The new Clean Energy Credit now runs until 2035. American homeowners can now receive a 30% credit for solar systems that began installation after January 1, 2022 and are completed by the end of 2032. This new credit will then decrease annually until the date of expiration. The program expansion also makes it easier to get credit for energy storage systems, starting in 2023.

Click here to learn more about the new Inflation Reduction Act. Your local West Hempfield solar panel installers are the best people to answer your questions regarding the new Clean Energy Credit and how it may apply to you.

State & Local Solar Incentives

In addition to federal solar incentives, there are often also state ones. Tax credits, rebates and more might be available at a more local level. Some incentives are ongoing, while others are offered for only a limited time. Your local incentives may come from the Pennsylvania government, or from your specific county or municipality.

Next Steps for Installing Solar in West Hempfield

You can receive solar incentives from the Pennsylvania government and the federal government, as well as from your local utility company. The increased availability of solar initiatives over the last 15 years has helped increase nationwide solar energy use enormously. We recommend talking to your local West Hempfield solar installer for more information about these incentives and to make sure that you're getting the most money possible for your solar panels.