Report: PA can still secure billions in federal solar tax credits
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Pennsylvania has the opportunity to tap into billions in federal solar incentives, but action must be taken soon to avoid losing them. According to the Keystone Research Center, the state needs to undertake commercial and grid-scale projects to maximize tax credits established in 2022 before they expire. If action is taken, it could bring $2.5 billion in tax credits and over $8 billion in total investment into Pennsylvania, as well as potentially adding 6.5 gigawatts of solar by completing half of the projects queued for grid connection.
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Pennsylvania Can Still Grab Federal Solar Incentives, Researchers Report
According to a new study, Pennsylvania can still access billions in federal solar incentives that are on the brink of disappearing. Despite solar capacity increasing sixfold since 2019, more growth is required to fully take advantage of the Inflation Reduction Act tax credits, as reported in the Keystone Research Center’s “Use It or Lose It” report.
The Importance of Solar Expansion in Pennsylvania
Stephen Herzenberg, an economist from the Keystone Research Center, highlights that majority of the projects pending grid connection are solar-based. He emphasizes that sustaining this momentum is crucial to prevent electricity shortages and price hikes. Herzenberg insists that Pennsylvania needs more commercial and grid-scale projects to fully capitalize on the federal tax credits established in 2022 before they end.
Potential Economic Impact of Solar Expansion
“If Pennsylvania organizes a successful fire drill to maximize federal tax credits for solar, we can bring $2.5 billion in tax credits and over $8 billion in total investment into the state,” Herzenberg stated. He further explained that if just half of the projects already in line for grid connection are completed, it would add an impressive 6.5 gigawatts of solar power. This would triple the state’s already expanding capacity. Both consumers and workers, particularly in rural areas where most large-scale projects are constructed, will benefit from seizing this solar opportunity in Pennsylvania, he added.
Joint Effort Needed
Herzenberg detailed that realizing the full potential of these tax credits would require a joint effort, “Our report spells out how to organize a fire drill and team effort to maximize the tax credits through smart joint action by the governor, legislature, public utility commission, utilities, electric grid, industry experts, and unions that build much of our solar,” he outlined.
Benefits Despite Tighter Timelines
Herzenberg noted that while last year’s “One Big Beautiful Bill Act” did not abolish tax credits for renewable energy, it did reduce some timelines. Any project that begins construction by early July will have four years to become operational. With electricity prices on the rise and potential signs of an economic slowdown, it is crucial to utilize these tax credits while they are available, he stressed.
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