Pennsylvania Solar Panels

Pennsylvania’s Solar Renewable Energy Credit (SREC) program is administered under the state’s Alternative Energy Portfolio Standards (AEPS) Act. Every time your solar system generates 1,000 kilowatt-hours (1 MWh) of electricity, you earn one SREC. Utilities and electricity suppliers are required by law to source a portion of their power from solar, so they purchase SRECs from homeowners to meet that obligation. In early 2026, SRECs are trading between $25 and $40 per credit.

A typical 6–8 kW residential system in Pennsylvania produces roughly 9–12 SRECs per year, translating to approximately $225–$480 in annual income on top of your regular electric bill savings. To participate, you must register your system with the Pennsylvania Public Utility Commission (PUC) and enroll in the PJM Generation Attribute Tracking System (PJM-GATS), through which credits are issued and sold. PA SRECs have a useful life of three years from the date they are generated.

Important eligibility notes: Only solar systems physically located in Pennsylvania qualify — out-of-state systems are not eligible. SRECs belong to the system owner, so if you lease your panels, the leasing company typically retains the SREC rights. Proposed state legislation (the PRESS Act) could significantly increase the solar carve-out target, which may push SREC prices higher in the future.

Pennsylvania law requires all investor-owned electric utilities — including PECO, PPL Electric, Duquesne Light, Met-Ed, Penelec, Penn Power, and West Penn Power — to offer 1-to-1 net metering for residential solar systems up to 50 kW. Under this policy, every kilowatt-hour your solar panels send to the grid offsets one kilowatt-hour you consume from the grid, credited at the full retail rate (approximately $0.21/kWh). Monthly excess credits roll forward indefinitely and are reconciled at an annual true-up each May 31.

Pennsylvania’s net metering policy includes an unusually homeowner-friendly feature: if your system produces more electricity than you consume over the entire year, your utility is required to issue you a cash payment for the surplus. Most other states simply zero out leftover credits — Pennsylvania actually pays you. This makes right-sizing your solar system especially valuable in this state.

⚠️ Important 2026 timing alert for PPL customers: PPL Electric has proposed replacing the current 1-to-1 retail rate with hourly wholesale-based (LMP) credits, a change expected around July 2026 that could reduce credit value by 60–80% for PPL customers. Homeowners who install solar and receive Permission to Operate before any tariff change takes effect may be grandfathered into the current favorable rate. Note that customers of rural electric cooperatives and municipal utilities are not covered by the state net metering mandate — contact your utility directly to confirm eligibility.

The Philadelphia Solar Rebate Program offers city residents a one-time rebate of $0.20 per watt for residential solar installations, funded with $500,000 in annual city appropriations. For a typical 8 kW (8,000-watt) system, that equals a $1,600 rebate. The program is capped at $100,000 per project, and 10% of annual funds are reserved specifically for low- and moderate-income households. The commercial rebate rate is $0.10 per watt.

To be eligible, your solar system must be installed on a property located within Philadelphia city limits, and you must have received a Permission to Operate (PTO) letter from PECO on or after July 1, 2019. Applicants must also be current on all city taxes and free of unresolved building code violations. The rebate is administered by the Philadelphia Energy Authority on behalf of the Office of Sustainability.

Because this program is funded annually and subject to availability, it is strongly recommended that you verify current funding status and application requirements directly with the Philadelphia Energy Authority before signing a solar contract. Timing your application around your PTO approval is critical, as the rebate is triggered by that milestone.

PECO Energy Company offers a $500 rebate for new residential solar installations in its service territory. To qualify, your solar system must receive its Permission to Operate (PTO) between September 1, 2024, and April 30, 2026. This rebate is part of PECO’s Act 129 energy efficiency and conservation programs, which are mandated by Pennsylvania state law.

The rebate is straightforward: once your system is installed, inspected, and granted PTO by PECO, you can apply for the $500 payment. This incentive is stackable with other programs — for example, Philadelphia residents in PECO’s territory may be able to combine this with the Philadelphia Solar Rebate Program for additional savings.

Important: Program funding and eligibility windows can change. The current program window closes April 30, 2026, so homeowners should act promptly and confirm current availability directly with PECO before proceeding. Visit peco.com or call PECO’s customer service line for the most up-to-date application instructions and deadlines.

Residential customers of FirstEnergy’s Pennsylvania subsidiaries — Met-Ed, Penelec, Penn Power, and West Penn Power — can receive a $500 rebate for installing a new solar water heating system. This incentive is part of FirstEnergy’s Act 129 energy efficiency programs and is designed to reduce the upfront cost of solar thermal technology.

To qualify, the solar water heating equipment must be ENERGY STAR certified. Solar water heaters use the sun’s energy to heat water for domestic use, reducing reliance on electric or gas water heaters and lowering monthly utility bills. While this is distinct from a photovoltaic (PV) solar panel system, it is a direct solar energy incentive available to eligible FirstEnergy customers.

Contact your specific FirstEnergy subsidiary directly to confirm current program availability, application requirements, and any contractor requirements before purchasing equipment. Program terms are subject to change based on Act 129 compliance cycles.

Pennsylvania’s Sustainable Energy Funds (SEF) were established as part of electric utility deregulation and have collectively provided over $20 million in low-interest loans and nearly $2 million in grant funding to support clean energy projects statewide. The SEF programs are specifically designed to close the financing gap that remains after other incentives — such as SRECs and net metering savings — have been applied, making solar and battery storage projects more financially accessible.

SEF financing is available in the service territories of PPL Electric and FirstEnergy subsidiaries (Met-Ed, Penelec, Penn Power, and West Penn Power). Eligible projects include residential and commercial solar installations, as well as solar-plus-battery storage systems. Loan amounts and grant awards are determined based on remaining capital gaps, project economics, and demonstrated public benefit.

To explore SEF financing for your solar project, contact your local utility or reach out to the relevant SEF program office directly. Because these funds are administered regionally and have limited availability, early inquiry is recommended to determine whether your project qualifies and what funding may be available.

Pennsylvania’s High Performance Building (HPB) Program, administered jointly by the Department of Community and Economic Development (DCED) and the Department of Environmental Protection (DEP), provides financing for the design and construction or major renovation of high-performance buildings — including those with solar energy systems. Residential projects can access loans up to $100,000 at a fixed interest rate, while small businesses can access loans up to $2 million.

In addition to loans, the program offers grants covering up to 10% of total eligible building construction or renovation costs, up to a maximum of $500,000. A dollar-for-dollar matching investment is required, along with a 1% commitment fee on all approved loans. Solar installations of all types are accepted as part of eligible HPB projects.

To qualify, projects must meet or exceed recognized green building standards, including the National Green Building Standards (NGBS), Green Building Initiative (GBI) Green Globes Standards, or USGBC LEED Gold Standards. This program is best suited for homeowners or developers undertaking a comprehensive high-performance building project that incorporates solar, rather than a standalone solar installation. Contact DCED or DEP for current application details and funding availability.

Under Pennsylvania law, solar energy systems and their components are exempt from the state’s 6% sales and use tax. This means that when you purchase solar panels, inverters, racking, wiring, and other system components, you do not pay Pennsylvania sales tax on those items. For a typical residential solar installation costing $20,000–$30,000, this exemption can save homeowners $1,200–$1,800 at the point of purchase.

The exemption applies to the equipment itself and is typically handled automatically by your solar installer at the time of sale — you should not see Pennsylvania sales tax charged on qualifying solar equipment on your contract or invoice. If you believe sales tax has been incorrectly charged, contact the Pennsylvania Department of Revenue for guidance.

Note: Pennsylvania does not currently offer a statewide property tax exemption for the added value that solar panels contribute to your home’s assessed value. This means your property taxes could increase modestly after installation as your home’s assessed value rises. Check with your local county assessor’s office for specifics, as assessment practices can vary by municipality.

The Penn Energy Savers Program, administered by the Pennsylvania Department of Environmental Protection (DEP), is a federally funded initiative backed by $129 million in IRA funding. It consists of two components: the Home Efficiency Rebates (HER) program for whole-home energy retrofits, and the Home Electrification and Appliance Rebate (HEAR) program for point-of-sale rebates on high-efficiency electric appliances. Eligible products include heat pump water heaters, electric panels, wiring, insulation, and similar upgrades — not solar panels or battery storage directly.

For income-qualified households, the program is significant: households below 80% of Area Median Income (AMI) may receive rebates covering up to 100% of project costs (up to $8,000), while moderate-income households (80–150% AMI) may receive rebates covering 50% of costs. Electrical panel and wiring upgrades covered by this program can reduce the cost of preparing your home for a future solar or battery installation.

⚠️ Important: As of June 2026, the Penn Energy Savers program is still awaiting final U.S. Department of Energy approval and has not yet officially launched. Do not begin work or purchase equipment in anticipation of this rebate until the program formally opens. Sign up for updates at www.pennenergysavers.com or contact the DEP directly at [email protected] to be notified when applications open.