Despite ranking in the top 5 fossil fuel-producing states in the country, Pennsylvania offers plenty of solar incentives and programs that further incentivize homeowners to make the switch to solar energy. PA even has an Alternative Energy Portfolio Standard (Act 213) that requires electric distribution companies and generation suppliers to include a specific percentage of electricity from alternative resources in the power they sell to Pennsylvania customers.
If you’re considering solar panels in Pennsylvania, there are three key solar incentives you’ll want to learn about: the federal solar tax credit, net metering, and the state’s solar renewable energy credit (SREC) program. Based on your location and utility provider, you may also be eligible for sparsely available rebates or programs through your city, county, or utility service area.
Note: Your eligibility can depend on your location, electric utility provider, income level, interest in battery storage, and more. This is not tax advice, and you should always consult a tax professional.
Federal Solar Tax Credit
Across the United States, the majority of homeowners who purchase a solar energy system can apply for the federal solar Investment Tax Credit (ITC) worth up to 30% of their total installation cost. Officially titled the Residential Clean Energy Credit and often referred to as simply the ”solar tax credit”, the federal ITC was renewed for another decade by the Inflation Reduction Act of 2022.
Extremely valuable for tax-paying homeowners, the Residential Clean Energy Credit can be claimed against the buyer’s federal income tax liability owed during the calendar year of the solar panel installation. To put it simply, if your solar energy project has a total cost of $30,000, you may be eligible to claim up to $9,000 (30% of $30,000) in federal tax credits depending on your eligibility and tax liability.
It’s also worth noting that both solar energy equipment and electricity storage batteries can qualify for the federal ITC, whether installed together or as separate projects. So, although there are no Pennsylvania-specific solar tax incentives, exemptions, or rebates, the Residential Clean Energy Credit is an extremely valuable tax credit for homeowners to offset the cost of going solar by up to 30% through 2032.
Pennsylvania Net Metering
As one of the longest-standing solar incentives in Pennsylvania, net energy metering has been available in the Keystone State for over 15 years. Administered and enforced by the state’s Public Utilities Commission (PUC), all of Pennsylvania’s investor-owned electric utilities must provide 1-to-1 net metering credits for the excess solar energy generated by their residential customers.
By compensating solar producers for the electricity they create and send to the electric grid at retail rates, net metering helps to keep PA homeowners’ electric bills and annual energy expenses low, thereby increasing the overall value of their solar panel system. Credits typically roll over from month to month and reset once per year when any excess energy that has been generated is redeemed at a reduced rate.
Whether you are a customer of Citizens Electric Co, Duquesne Light Co, PPL, PECO, or another utility, we recommend reaching out to your electricity provider directly to learn more. Your eligibility for net metering in Pennsylvania can also be discovered when working with a local solar expert.
As another great financial incentive, SRECs (Solar Renewable Energy Credits) go above and beyond net metering to compensate homeowners even more for the clean energy they produce. Available for residential solar installations across the state, Pennsylvania’s SRECs are a specific kind of Alternative Energy Credit (AEC) only available to PA homeowners.
In short, PA SRECs can help renewable energy system owners earn real U.S. dollars for the clean electricity their solar panels produce. Under this solar program, energy credits are generated for every 1,000 kilowatt hours (kWh) of electricity that is generated by the panels and sent to the grid.
To put this in perspective, Pennsylvania homes consume an average of 846 kWh of electricity per month. This means that solar systems designed to cover 100% of a property's energy demand will create about 10 SRECs every year, which a homeowner can then sell at current market prices.
SREC prices vary, but Pennsylvania rates are hovering around $40 per credit in the early 2020s. Although Palmetto does not determine eligibility for SRECs, we have partnered with SRECTrade to help PA homeowners make the most out of their solar energy investments. For more information about this valuable PA solar incentive, please see our complete guide to Pennsylvania SRECs.
Local Solar Rebates in Philadelphia
Although it is not always sunny in Philadelphia, the City of Brotherly Love is one of the best places to go solar in the state, thanks to Pennsylvania solar rebates. Enacted in 2019, Philadelphia established its Solar Panel Incentive Program to encourage residential photovoltaic (PV) installations for city residents.
Offered as a one-time rebate payment, eligible solar energy adopters in Philadelphia could receive $0.20 per watt for their system once it has been approved for Permission to Operate (i.e. you can turn your system on) by PECO. For instance, if you install a 6 kW solar energy system, those eligible could qualify for a $1,200 rebate (6,000 watts x $0.20) if approved by the Philadelphia Energy Authority.
Related: Energy Efficiency Rebates
To further capitalize on the value of clean, renewable energy at home, Pennsylvania solar adopters may also consider taking advantage of federal and state programs for energy efficiency upgrades. By maximizing the energy efficiency of your home, your home uses less energy, thus potentially reducing the need to draw extra power from the electricity grid.
Alongside solar, many federal energy efficiency rebates have been extended and/or updated by the Inflation Reduction Act of 2022. Homeowners have the potential to cash in on a variety of rebates for many different energy-efficient appliances and features, such as heat pumps, central air conditioning, water heaters, new roofing, insulation, and more.
Although there are no state-wide incentives for energy efficiency upgrades in Pennsylvania, residents may also be able to redeem rebates offered by equipment manufacturers. Homeowners may also be eligible for financial assistance through programs, such as the Homeowners Energy Efficiency Loan Program (HEELP).
For an electrified life in 2022, Pennsylvania offers rebates for alternative fuel vehicle (AFV) purchases. Like all of the programs we’ve mentioned, eligibility requirements will vary and rebates may not be available to some individuals based on income, location, or other circumstances.
Pennsylvania is a great place to go solar in 2022, thanks to the variety of financial incentives offered, including net metering, the federal tax credit, SRECs, and other energy rebates. As your tour guide to the universe of solar energy, Palmetto can help you discover the best way to go solar in Pennsylvania and unlock the maximum lifetime value of your system.
Whether you’re trying to find the perfect installer or are just beginning your clean energy journey, you can take advantage of PA’s excellent solar incentives when you purchase a system of your own. To see your savings with solar, you can use our Free Solar Design and Savings Estimate Tool to get started today.