While Pennsylvania is a relatively average state with how much sunlight it gets, it is important to note that the state pays exactly 15% more than the national average in electricity cost. This means that a business consuming 3,1110kwh of energy per month spends $559.8 on electricity bills. However, this is why solar energy is an attractive investment for businesses in the Keystone State. Businesses that go solar are able to save more in electricity bills and potentially let their solar system pay for itself a lot sooner than most states. But that’s not all. We understand that the upfront cost of setting up a solar system can be mind-burling and that is why we have put together the best commercial solar incentives Pennsylvania offers. These incentives for businesses will help you pay for your investment in solar energy.
Modified Accelerated Cost-Recovery Systems (MACRS)
Businesses in Pennsylvania can enjoy the MACRS corporate depreciation incentive offered by the IRS. This incentive provides a way for businesses to recover investments in certain properties through depreciation deductions. Under MACRS, renewable energy technologies like solar, wind, geothermal, fuel cells, and biomass are classified for accelerated depreciation, meaning businesses can recover the investment faster.
The program was originally established through various legislative acts, including the Energy Policy Act of 2005 (EPAct 2005) and The Energy Improvement and Extension Act of 2008. Specifically, EPAct 2005 classified certain renewable energy technologies as five-year property under Section 48(a)(3)(A) of the Internal Revenue Code, allowing for accelerated depreciation. However, The Tax Cuts and Jobs Act of 2017 increased bonus depreciation to 100% for qualified property acquired and placed in service after September 27, 2017, and before January 1, 2023. Bonus depreciation steps down by 20% each year beginning with 80% in 2023.
Business Investment Tax Credit (ITC)
Solar Investment Tax Credit Pennsylvania
The ITC is a commercial solar incentive Pennsylvania businesses can take advantage of in Q2 of 2024. This incentive offers a 30% tax credit to businesses that meet the necessary requirements. The Department of the Treasury issued guidelines in November 2022 stating that projects under 1 MW can get the full 30% tax credit if they start construction between 2021 and 2025, while projects over 1 MW need to meet new labor standards to qualify. Bonus credits are also available for projects meeting specific criteria, like using domestically produced materials or being located in energy communities.
Renewable Electricity Production Tax Credit (PTC)
The Production Tax Credit (PTC) is a financial incentive that offers a tax credit per kilowatt-hour (kWh) for the first 10 years of solar system operation, reducing federal income tax liability. Solar systems placed in service from 2022 onwards and starting construction before 2033 can qualify for either a 30% Investment Tax Credit (ITC) or a 2.75 ¢/kWh PTC if they meet labor requirements or are under 1 megawatt (MW) in size. Generally, project owners cannot claim both the ITC and PTC for the same property, though they could for co-located systems, pending further IRS guidance. The ITC and PTC both phase out for projects commencing construction in 2032 or after, with a gradual reduction in value over subsequent years until they become ineligible. To claim the PTC, a taxpayer must complete and attach IRS Form 3468 to their tax return.
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Net Metering in Pennsylvania 2024
Net-Metering in Pennsylvania PA, 19124
Net metering is a lucrative commercial solar incentive for Florida businesses. This incentive allows utilities to buy the excess energy your solar system produces. This incentive is set for systems with interconnection which allows a solar system to send excess energy to the grid. Excess energy bought for net metering is purchased at the full retail rate, rather than the avoided cost rate that some states offer.
How to enroll in net metering in Pennsylvania
There are several requirements for enrollment in net metering in Pennsylvania set by the Public Utilities Commission. However, depending on the utility, there are several other requirements you may have to meet. To participate in net metering in Pennsylvania, the system must not exceed 3 MW for commercial customers. Also, customers are not allowed to generate above 110% of their projected annual electricity usage if the solar system is leased. You may also be required to pay a connection fee depending on the size of your solar system and the Utility you use. To sign up for net metering, check out the interconnection form.
Additional Local Commercial Solar Incentives Pennsylvania: Incentives, Rebates, & Grants
There are also several local commercial solar incentives Pennslyvania offers businesses. While Pennsylvania does not offer a sales and property tax exemption for solar systems like most states, the Keystone State offers a few local solar incentives for Pennsylvania commercial customers. These include utility company rebates, grants, and the SRECS. Here is all you need to know about the most important incentives you need in Q2 of 2024.
Pennsylvania Solar Renewable Energy Certificates (SRECs)
Solar Renewable Energy Credits (SRECs) or Pennsylvania’s Solar Alternative Energy Credit (SAEC) are certificates awarded to solar energy system owners for every megawatt-hour (MWh) of electricity their systems generate. These credits can be sold or traded on the market to utilities or other entities needing to meet renewable energy targets, providing additional revenue for solar system owners. Essentially, SRECs represent the environmental benefits of solar energy production and offer a way to incentivize and monetize renewable energy generation. Note that 1000kwh converts to 1 SREC. This means that businesses consuming up to 2500kwh can potentially generate up to 30 SRECs, which will sell for up to $800 today, in the open market.
PPL Electric Utilities – Business Incentive Program
The PPL business incentive is a rebate that can pay a maximum of 50% of your solar project cost, up to $500,000. This program is offered by the PPL Electricity Utility company and offers a per kilo-watt-hour payment for every energy a consumer generates. Check out how to apply on their official website.
Rural Energy for America Program Renewable Energy Systems & Energy Efficiency Improvement Guaranteed Loans & Grants in Pennsylvania
Rural Energy for America Program (REAP)
The Pennsylvania agricultural industry is worth over $132 billion making the REAP program a commercial solar incentive Pennsylvania agro businesses can enjoy. This program offers guaranteed loan financing and grant funding to agricultural producers and rural small businesses for renewable energy systems or to make energy efficiency improvements. Application for this program currently opens for the year 2024 from June 30 through to September 30, 2024, and offers up to $500,000 per project. The program offers incentives on a first-come-first-serve basis. You can stay updated on their official website.
Solar Potential in Pennsylvania: Incentives and Savings
Pennsylvania has average sunlight averaging 180 days per year. Due to its relatively low sunlight, the average payback period of a solar system is 13.5 years. However, due to the high electricity rate in the state, you can potentially pay back a solar system in 12 years without incentives. Payback time could be 6 years if you are taking advantage of the incentives Pennsylvania and the federal government offers. On average solar users can save up to $500 a month on electricity bills. This is how much you can save monthly once your solar has completely paid for itself, alongside whatever you might earn from SRECs and net metering.
Understanding the Electric Utility Landscape and Rates in Pennsylvania
Pennsylvania is considered a deregulated state in terms of electricity. This means that consumers can choose their electricity supplier from among multiple competing providers, rather than being limited to a single utility company. However, while the electricity market is deregulated in Pennsylvania, the state still regulates various aspects of the energy industry, such as ensuring reliability, setting consumer protection standards, and overseeing the implementation of renewable energy programs like the Alternative Energy Portfolio Standard (AEPS). Currently, the Keystone State has the 12th highest electricity rate in the country.
Impact on Solar Energy Decisions in Pennsylvania
The major impact of solar decision is the thousands of dollars you can save annually on electricity bills. Additionally, there are also environmental benefits. States even promote the reduction of greenhouse gas emissions and mitigating climate change by imposing utilities to generate a particular percent of their energy from renewable energies. While the Keystone State has no such renewable energy standards, there are currently 12 states across the US with a renewable energy standard required by state laws.
Are Solar Panels Worth It in Pennsylvania?
Determining if solar panels are worth it in the Keystone State depends on various factors. This includes the amount of sunlight the state gets, how much upfront cost you need, how much incentives are available in the state, and the cost of solar panels.
With an average of 180 days of sunlight and prices of solar panels having fallen by 47% in Pennsylvania over the last 10 years, solar investments are typically worth it in the keystone state. The various commercial solar incentive Pennsylvania offers also ensures setting up a solar system doesn’t cost as much. However, it is also important to note that the benefit of solar may also depend on your electricity usage and the size of your system. You can schedule a 1-on-1 consultation with our experts to ascertain the benefits you will enjoy if your business goes solar.
Why Choose Commercial-Solar.org Solar Company in Pennsylvania?
Choosing Commercial-Solar.org as your solar company in Pennsylvania offers several distinct advantages. With our years of experience and expertise in commercial solar solutions, we tailor our services to meet the unique needs of businesses in the state. Our team of skilled professionals ensures seamless installation, maximizing energy efficiency and cost savings for your commercial property. We prioritize customer satisfaction, providing ongoing support and maintenance to ensure the optimal performance of your solar system. Additionally, we stay abreast of state regulations and incentives, helping you navigate the process of obtaining permits and accessing available incentives. Trust Commercial-Solar.org to deliver reliable, sustainable, and cost-effective solar solutions for your business in Pennsylvania.
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Philadelphia, Pittsburgh, Allentown, Reading, Erie, Scranton, Bethlehem, Lancaster, Harrisburg, York, Wilkes-Barre, Altoona, Chester, Hazleton, Easton, Williamsport, Lebanon, New Castle, Johnstown, McKeesport, Hermitage, Greensburg, Butler, Coatesville, Washington, Pottsville 15001, 15003, 15004, 15005, 15006, 15007, 15009, 15010, 15012, 15027, 15030, 15031, 15032, 15034, 15042, 15046, 15053, 15054, 15228, 15229, 15230 |
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Commercial Solar Installation
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