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Going solar requires a significant investment. According to SunPower, one of the leading solar companies, installing a typical 5-kilowatt (kW) solar panel system can cost $11,500 to $20,100 in Pennsylvania. However, homeowners can take advantage of federal and state financial incentives to reduce costs and maximize savings.
We’ve researched Pennsylvania’s solar incentives and detailed the key programs in this helpful guide.
Overview of Pennsylvania Solar Incentives
See a quick overview of Pennsylvania‘s residential solar incentives, credits, and rebates in the table below.
| Incentive | Incentive Type | Description |
|---|---|---|
|
Solar Renewable Energy Certificates (SRECs) |
State |
You earn one credit for every 1,000 kilowatt-hours of energy your solar system generates |
|
Philadelphia Solar Rebate Program |
Local |
Philadelphia residents qualify for a one-time cash rebate of 20 cents per watt installed |
|
Net metering |
Local |
You receive credits on your energy bill for sending excess energy back to the electric grid |
|
Federal solar tax credit |
Federal |
You can claim 30% of your total system costs on your federal taxes to reduce what you owe |
Pennsylvania Solar Incentives, Tax Credits, and Rebates
Pennsylvania offers fewer incentives to reduce solar panel costs than other states. It doesn’t offer a tax exemption for state tax, property value, or sales tax, instead focusing on providing long-term cost savings. Only Philadelphia offers a city-specific program for its residents. Below is an overview of current Pennsylvania solar incentives.
Philadelphia Solar Rebate Program
Under the Philadelphia Solar Rebate program, city residents qualify for a one-time system rebate. Homeowners receive 20 cents back for each installed watt of solar power. You must meet the following criteria to earn the rebate:
- Your system and property are located within Philadelphia city limits.
- Your home solar system was granted “Permission to Operate” status from PECO Energy Company (formerly Philadelphia Electric Company).
- You have no unpaid taxes or other city debts.
After receiving the rebate, you must keep your system in operation for 36 months. Your system must also produce at least 80% of your projected energy production for the first three years after activation.
Additional resources:
Solar Renewable Energy Certificates (SRECs)
SRECs (also known as Solar Renewable Energy Credits) provide credits for producing clean energy. Under Pennsylvania’s SREC Program, homeowners earn one credit for every 1,000 kilowatt-hours (kWh) of energy their systems generate. Credits can be sold on the local SREC market for cash. Payouts vary throughout the year, depending on market demand. According to SRECTrade, Pennsylvania’s SRECs pricing fluctuated from $34 to $48 in 2023.
Homeowners should visit Pennsylvania’s Public Utilities Commission (PUC) website to learn more about the SREC program. You must create an account and apply for the program before purchasing your solar energy system. Afterward, a PUC program representative will assist you with completing your application.
Additional resources:
Net Metering
Net metering allows homeowners to earn energy bill credits for selling their excess energy back to the power grid. This incentive program offers long-term savings for homeowners and helps reduce future energy costs. The PUC mandates its net metering program for all investor-owned utilities (IOUs). Unfortunately, Pennsylvania net metering payouts aren’t regulated, so they vary among utility companies.
While some states match between retail and payment pricing 1:1, Pennsylvania residents typically receive below-retail rates. This means you’ll receive a payout lower than the retail cost of electricity. Despite the lower payout rate, net metering still provides energy savings in Pennsylvania. We recommend reaching out to your local utility company for more details.
Additional resources:
Federal Tax Credit
The federal government offers its own incentive program to encourage clean energy adoption. The federal solar tax credit allows you to claim up to 30% of solar system costs on your federal income taxes. This credit helps reduce or eliminate your tax bill; the remaining credits can roll over to the next tax year. Pennsylvania homeowners must legally own their solar system to qualify for this incentive.
Pennsylvania Solar Costs
The average Pennsylvania solar panel system costs $11,500 to $20,100. Home size, monthly energy needs, and system size can impact your total price. This range is before applying and cost-saving incentives.
Is Going Solar in Pennsylvania Worth the Investment?
Yes, going solar in Pennsylvania is worth the investment. Transitioning to solar energy makes your home more energy efficient, leading to reduced electric bills and long-term savings. Pennsylvania receives 179 sunny days per year, just under the national average of 205. With ample sunlight, homeowners can maximize their energy savings and receive maximum solar system benefits.
Our Recommendation
Pennsylvania homeowners should take advantage of federal and local solar incentives to reduce their solar installation costs. The state offers several long-term savings opportunities to make solar a worthwhile investment.
Our team ranked the best solar companies in Pennsylvania and selected SunPower, Momentum Solar, and Green Home Systems are our top three picks. These installers offer reliable service, high-quality panels, and long-term warranty coverage. We recommend getting free quotes from at least three solar companies to compare prices and find the best value for your home.
Pennsylvania Solar Incentives FAQ
Can I get free solar power in Pennsylvania?
You can’t get free solar in Pennsylvania, but you can significantly reduce your installation costs by using federal and state solar incentives.
Can you lease solar panels in Pennsylvania?
Yes, you can lease solar panels in Pennsylvania. With a solar lease, the solar company retains full system ownership and rents the system to homeowners. However, solar leases disqualify you from federal and state incentives, meaning you’ll miss out on thousands of dollars in savings.
Is the federal solar tax credit a refund?
No, the federal tax credit is not issued as a refund. Instead, the federal tax credit reduces your tax liability. If the credit exceeds your owed taxes, the remaining credit rolls over to the next tax year.
Are solar systems exempt from property taxes in PA?
No, solar systems aren’t exempt from property taxes in Pennsylvania. Installing solar panels will increase your property tax.
How We Chose the Top Solar Companies
We researched and analyzed dozens of solar panels and solar installation companies. We then formulated a rating system based on each solar installer or manufacturer’s services and products. We weighed several significant factors, including the quality and type of solar panels offered, the customer support network, warranty lengths and limitations, and additional benefits such as mobile apps for monitoring and customer service.
Speaking directly to representatives, we determined how each solar company personalizes its solar panel installation for each home. We also analyzed each company’s warranty options to ensure their product and performance guarantees match or exceed industry standards.
We evaluated each provider based on rating and history with the Better Business Bureau (BBB) to determine reputation. In addition, we analyzed the 100 most recent Google Reviews for each provider across various locations and branches.
