Pennsylvania EV Tax Credits Guide

Pennsylvania is considered a “CARB” state. This means it’s one of a growing number of U.S. states that follows suit with the rules of the California Air Resources Board rather than the U.S. federal government when it comes to clean air initiatives.

The state of Pennsylvania offers a variety of incentives to shift to more environmentally friendly vehicles, including rebates and tax credits for individuals and businesses. Here’s what you need to know about EV incentives in Pennsylvania.

Incentives can often change, so make sure you speak with a tax professional before buying or leasing an EV or any other related products. Pennsylvania’s incentives were current at the time of publishing.

Yes, fully electric vehicles of all sizes qualify for a $2,000 rebate. The amount of the rebate is determined based on detailed income requirements based on family size. Lower-income families may be eligible for a $3,000 rebate. For instance, while a family of two making $73,240 would get the typical $2,000 toward an EV, the same size family making $36,620 would qualify for $3,000.

Plug-in hybrid electric vehicles (PHEVs) qualify for a $1,500 rebate. Electric motorcycles and other alternative fuel vehicles are eligible for a $500 rebate. The additional $1,000 for lower-income families also applies to PHEVs, electric motorcycles and other alternative fuel vehicles.

The vehicles must have a final purchase price of $50,000 or less and be bought or leased from a registered dealer.

The rebates are offered on a first-come, first-served basis while funding is available.

Yes, the above rebates also apply to used electric vehicles and other alternative fuel vehicles. The rules are no different whether an EV is new or used. However, it’s important to note that the vehicle must have 75,000 miles or fewer on its odometer.

Pennsylvania also offers the exact same rebates on demonstration vehicles. A demo EV can get a rebate if its odometer has over 500 miles and fewer than 10,000 miles.

No, there isn’t a state-sponsored program for individuals. Instead, the programs all appear to apply to commercial and publicly available Level 2 and DC fast charging stations.

Adams Electric Cooperative offers a $300 bill credit for customers who install a Level 2 charging station at their homes. Other utility companies in Pennsylvania offer bill credits as well, though they’re around $50 to $60. Northwestern Rural Electric Cooperative offers a $150 rebate on a Level 2 home charger.

Yes, Pennsylvania offers Solar Renewable Energy Credits (SRECs), which help offset the cost of energy. For every 1,000 kWh of energy your solar system produces, you’ll get one SREC. Solar owners can then sell the SRECs back to utility companies to earn money. The average 8.5-kW solar system earns about 10 SRECs annually, which works out to around $350 to $410 per year.

Pennsylvania also offers Net Metering, meaning you can pull from the grid when your solar system doesn’t produce enough energy, but when it produces too much, the excess energy will go back to the grid, resulting in a bill credit.

Some local utility companies in Pennsylvania offer additional incentives on top of those highlighted above.

In addition, there’s a U.S. federal tax credit called the Residential Clean Energy Credit. It covers up to 30 percent of the costs associated with solar installations and includes labor and related equipment, such as home energy storage batteries.

While government officials in Pennsylvania have made several proposals and even voted on ways to charge EV owners since they don’t pay a gasoline tax, there isn’t yet an official penalty in place. As of July 2023, the state Senate is considering an annual $290 fee instead of the alternative fuels tax, but it hasn’t yet been implemented.

Consumers who buy an electric vehicle in Pennsylvania may qualify for a U.S. Federal Electric Car Tax Credit of up to $7,500. Various utility companies in the state offer incentives as well.

Pennsylvania, like many states, has all sorts of opportunities available for buyers of EVs and related technology and equipment. Check with your local government offices, automotive dealers and utility companies to learn more.