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

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

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

Solar incentives are designed to make renewable energy usage more affordable through financial incentives for individuals who install solar panels on their homes. Incentives can include things like discounts, cash back or credit towards your monthly utility bill. Some incentives are offered federally, while others are provided by the state of Pennsylvania or by your utility company, county or municipality. Some solar incentives you might qualify for are:

• Solar Renewable Energy Certificate (SREC): SRECs and similar other performance-based incentives might be available to you if the solar system on your home produces over a specified (typically small) amount of electricity. These types of incentives are generally handled at the state level. You can sell your SRECs to your utility company or other buyers, and the money you make is typically considered part of your taxable income.
• Tax Credits: Different from tax deductions, tax credits reduce, dollar-for-dollar, the amount of income tax that you owe the federal government.
• Net Metering: Net metering factors in after your solar system is up and running. If you have a net metering agreement with your West Lampeter utility company, they will subtract the value of the excess energy produced by your solar system from your utility bill each month. In some areas, this credit is dollar-for-dollar, while in other areas you may make back a percentage of the value.
• Tax Exemptions: Tax exemptions may come in 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. This allows you to exclude the value added by your solar system when paying property tax on your home.
• Rebates: Your solar installer might help you claim a rebate, or partial refund after purchase, for your solar system. 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 tax credits are calculated.

Federal Solar Incentives

When thinking about solar incentives, federal incentives are likely the first thing that comes to mind. The solar incentive that you're most likely to have heard of is the Federal Solar Investment Tax Credit (ITC), which provides a credit on your taxes equal to a specified percentage of your solar system's cost.

The ITC can be applied to a solar system installed on your primary or secondary residence in the United States. The solar system must have been installed on a property you own after January 1, 2006 for you to be eligible for the credit. Initially, the ITC applied to 30% of all system costs (panels, accessories, equipment and labor), although the amount has fluctuated over time between 26-30%. The installation date of your solar system will determine what percentage you are eligible for. There is no cap on the claim amount.

To understand exactly how much money the ITC could save you, get in touch with your local West Lampeter solar panel installer.

The Inflation Reduction Act, passed in August 2022, made some changes to the ITC (as well as renaming it to the Clean Energy Credit). Homeowners can now qualify for a credit equal to 30% of the total costs of solar system installation for projects that began after January 1, 2022 and will be finished by the end of 2032. The percentage will then begin to decrease annually until the Clean Energy Credit expires in 2035. Starting in 2023, the program 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 Lampeter solar panel installers are the best people to answer your questions regarding the new Clean Energy Credit and how it applies to you.

State & Local Solar Incentives

Some solar incentives are often also offered at the local or state level. Similar to federal incentives, these might include tax credits, rebates and more. Some incentives are ongoing, while others are available for a limited time. They may be given by the Pennsylvania government, or by your county or municipality.

Next Steps for Installing Solar in West Lampeter

There are many kinds of solar incentives: those provided by the federal government, those provided by the Pennsylvania government and those provided by local utility companies, to name a few. Solar energy utilization has grown tremendously in the last 15 years, partially thanks to these incentives. If you're prepared to make the switch to solar energy, reaching out to your local West Lampeter solar panel installation expert is a great first step.