While solar energy is solidifying itself as a way of the future, switching to it isn’t cheap. The sheer cost of a solar energy system can create a barrier to entry for many Pennsylvania homeowners, so solar incentives and rebates are a crucial part of the switch. While The Keystone State doesn’t offer nearly as many rebates and perks as other states, residents have access to a select few Pennsylvania solar incentives, which we explore in this guide.
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How Does Pennsylvania Rank for Solar Incentives?
For many homeowners, solar incentives and rebates are the driving force behind the ability to afford the switch to solar. Pennsylvania offers a handful of solar incentives, and while there are nowhere near as many options as in some other states, they’re a helpful resource in making the switch.
The combination of the lack of state or local solar incentives and a slightly higher per-watt cost of solar than in other states create a higher overall system cost for Pennsylvania homeowners. However, the return on your investment makes solar worthwhile, as you could potentially eliminate your electric bills altogether. The statewide net metering policies sweeten the deal for homeowners whose systems produce more than they need.
| Solar Incentives Available in Pennsylvania | What Is It? | When Can You Get It? | How Much Can It Save You? |
| Federal Solar Investment Tax Credit (ITC) | Credits 30% of your entire system price to your income tax burden for the tax year your system is commissioned | One time: Gets applied when you file your taxes for the year your system is installed | $8,520 via tax credits on average in Pennsylvania (based on an average cost of $28,400 for an 8 kW system) |
| Solar Renewable Energy Certificate (SREC) Program | Allows you to earn credits based on energy production and sell them at market prices | Continuous: Always in effect | Varies based on market prices and system production |
| Philadelphia Solar Rebate Program (discontinued until further notice) | Offers $0.20 per watt for residential solar installations in Philadelphia | One-time: Available once after installing the system | Varies based on system size |
| Net Metering | Allows you to earn energy credits for overproduction and use them to offset future utility bills | Continuous: Always in effect | Varies based on system size, energy needs, and credit rate |
Interested in adding solar panels to your Pennsylvania home? Watch this video below for some tips you need to know:
Federal Solar Tax Credit (ITC) – How It Impacts Pennsylvanians
Our Take: The federal solar tax credit is a valuable resource for Pennsylvania residents seeking maximum savings on their solar power investment. While the return amount hinges on factors specific to you, it can be well worth your time.
The ITC is an impressive nationwide incentive available to solar customers that can help reduce solar costs. While this federal tax credit doesn’t offer direct savings at the time of purchasing a solar setup, it offers solid savings on tax returns.
The credit kicks in on each homeowner’s annual tax return, allowing them to claim up to 30% of the total cost of solar panels. Considering a standard 8-kilowatt system is needed for most Pennsylvania homes, it costs an average of $28,400, 30% savings is equivalent to $8,520.
Remember, the ITC is a tax credit, which means you will get the money back when you file your taxes. For example, if you bought a solar system in 2022 when you file taxes in 2023, you or your tax accountant will need to claim it.
The percentage each homeowner receives hinges entirely on their tax burdens and the cost of their systems, so savings can vary drastically by situation. However, it’s important to note that homeowners who can’t take full advantage of the credit in a single year can roll the remainder over into up to five following years.
The ITC was supposed to drop substantially in 2023, but in August 2022, Congress passed an extension, raising the percentage from 26% to 30%. This extension ends in 2032, dropping to 26% for systems installed in 2033 and 22% for systems installed in 2034. In 2035, the credit will expire unless Congress renews it.
This credit is solely available to homeowners who own their photovoltaic systems, either by purchasing outright through a solar company or through a solar loan. Homeowners who choose to integrate solar into their homes using a solar lease or power purchase agreement (PPA) can’t take advantage of this credit.
Read also: Electricity Rate Produced by Solar Panels
Steps to Claim the Federal Solar Tax Credit in Pennsylvania
Pennsylvania residents seeking to claim the full extent of the federal solar tax credit must follow a few steps:
- Talk to your accountant: If you have an accountant who handles your taxes for you, talk to them about using the ITC on your next tax return. They can help you determine your next steps to claim the credit.
- Ensure you meet the criteria: Not all installations qualify for this credit. Review the Department of Energy’s eligibility requirements to ensure your solar investment qualifies.
- File IRS Form 5695: To claim the credit, you’ll need to fill out IRS Form 5695 and file it with your taxes. The form walks you through the calculation process to determine the credit amount.
- File your taxes: File your taxes within the specified timeline with the necessary information.
- Enjoy the savings: Once you iron out the details and file your taxes, you can watch the number you owe on your taxes drop and enjoy the full extent of the ITC’s savings.
Which Solar Incentives Are Offered at the State Level in Pennsylvania?
Pennsylvania residents can take advantage of solar incentives available at the state level. While Pennsylvania doesn’t offer many incentives compared to some states, the one available incentive, the Solar Renewable Energy Certificate (SREC) program, can be an excellent way to earn a small amount of money each year simply by having a home solar system.
Pennsylvania Solar Renewable Energy Certificate Program
Pennsylvania’s SREC program offers an opportunity for homeowners to sell certificates based on their solar array’s energy production. Homeowners earn one certificate for every 1,000 kilowatt-hours of energy their solar arrays produce.
They can sell these certificates for cash payments to local electric companies subject to clean energy mandates. The payments are taxable, as homeowners receive payment for the sale of the certificate.
As of August 2023, the current bid for these certificates was $34. At this price, homeowners with a 5-kilowatt system could earn approximately $170 per year or $1,700 over a 10-year timeframe. You can check the current market prices on SRECTrade.
Steps to Claim Header
The SREC program is available through Pennsylvania’s Public Utilities Commission (PUC) to all solar residents across the state. To enroll in this program, follow these steps:
- Create an account with the Public Utility Commission’s Alternative Energy Credit Program.
- Follow the enrollment steps to finish creating your account.
- Submit an application through your account.
- Wait for approval.
- Begin earning certificates from your solar system’s energy production and selling them to interested buyers.
4.4
Installs high-quality Maxeon panels
Outstanding customer support
Best-in-class warranty lasts 40 years
3.7
Affordable prices
Excellent selection of panels and services
Locations in 22 states
4.3
No payments needed for 18 months
Provides in-house financing
Offers top brands like LG and Trina
3.9
Highly rated customer service
Provides 24/7 panel monitoring
Solid A+ rating with the BBB
Which Solar Incentives Are Offered at the Local Level in Pennsylvania?
In many states, solar incentives vary based on location, and Pennsylvania is no different. Unfortunately, there are currently no active local-level incentives for Pennsylvania residents. Funding for the Philadelphia Solar Rebate program was cut due to Covid-19 but the program is still taking applications and will put you on its waiting list if and when funding is restored.
- Philadelphia Solar Rebate Program (currently closed, but still taking applications and has a waiting list): This program offers a one-time incentive of $0.20 per watt for residential solar installations. For a 6-kilowatt system, this rebate can offer up to $1,200. The system must meet specific eligibility requirements, including up-to-date city taxes and payments, no unresolved building code or property code violations, and be installed within city limits.
Net Metering in Pennsylvania – Can You Profit?
Net metering policies are a valuable resource for solar homeowners across the country. These policies provide an opportunity to send excess energy a solar setup produces back to the grid in exchange for electric bill credits.
So, in slower months, when your solar energy system doesn’t produce enough energy to meet your home’s electric needs, you can utilize those credits. If your system produces enough excess to accumulate numerous credits, your electric bill might drop to zero, even when your system isn’t producing enough to meet your needs.
The PUC requires all investor-owned utilities to provide net-metering policies to their customers, so availability is widespread. However, it’s important to note that while these policies require a 1:1 match for energy sold to credits issued, it doesn’t cover any requirements surrounding full retail payments.
Because of this, your energy company might issue credits at a lower rate than standard sales rates. Of course, this doesn’t eliminate your savings altogether. Net metering policies are still an excellent way to save, especially if you accumulate numerous credits as they roll over from month to month.
Read also: What Solar Tax Exemption Entails
Steps to Enroll in Net Metering in Pennsylvania
The enrollment process varies based on your utility company. If you want to enroll in a net metering policy through your utility company, contact them to determine your next steps.
Watch Out For Solar Incentive Scams in Pennsylvania
As of 2020, around 3.7% of single-family homes in the United States have solar energy systems. The number continues to climb as numerous homeowners throughout the nation switch to solar energy.
Unfortunately, with the rise in demand, there has been an influx of solar scams. One of the most common scams plaguing the solar industry is advertisements for free solar panel systems. These ads often promise a free solar system, but in reality, the fine print discredits the promise. In many cases, paperwork to sign a power purchase agreement or solar lease is hot on the heels of this promise.
When shopping for a solar provider in Pennsylvania, we recommend thoroughly researching your options to find a well-known provider with a solid, honest reputation. Taking the extra time to scour the provider’s reviews and offerings to glean helpful information can be the difference between falling for a scam and selecting a quality provider that will stand behind its work.
Since an improperly installed solar system can wreak havoc on your roof, cost you loads of money, and may not generate any energy, selecting a reputable, experienced solar provider is crucial.
Read also: Price Range for Solar Panels
Bottom Line: Do the Incentives in Pennsylvania Make Going Solar Affordable?
Pennsylvania’s solar incentives and rebates aren’t overly impressive, but between the federal solar tax credit, SRECs, and net metering, switching to solar can be a doable venture. Of course, system affordability will hinge on factors specific to your situation, as savings can vary drastically from one scenario to the next.
Contact a certified solar installer in your area to learn more about available solar incentives in Pennsylvania and get the ball rolling. You might also be interested in learning how to acquire solar panels with incentives.
4.4
Installs high-quality Maxeon panels
Outstanding customer support
Best-in-class warranty lasts 40 years
3.7
Affordable prices
Excellent selection of panels and services
Locations in 22 states
4.3
No payments needed for 18 months
Provides in-house financing
Offers top brands like LG and Trina
3.9
Highly rated customer service
Provides 24/7 panel monitoring
Solid A+ rating with the BBB
Read also: Average ROI on Solar Panels
FAQs About Pennsylvania’s Solar Rebates and Incentives
Does Pennsylvania have solar incentives?
Yes, Pennsylvania offers a few solar incentives at the state and local levels. The Solar Renewable Energy Certificate (SREC) program offers savings at the state level, while Philadelphia’s Solar Rebate Program offers a one-time rebate for local residents. This program is discontinued due to a lack of funding, but is still taking applications and will place you on a waiting list. If funding gets restored, the program will work through the applications in the order they received them.
Can you sell electricity back to the grid in Pennsylvania?
Pennsylvania has net metering policies that allow you to send excess electricity your system produces back to the grid in exchange for credits that count toward your next utility bill. So, when your solar system doesn’t produce enough electricity to cover your home’s needs, power from the grid kicks in, but if you have enough credits, your electric bill might remain at zero.
Is solar exempt from property taxes in Pennsylvania?
While some states offer a solar exemption from property taxes, Pennsylvania isn’t one of them. Adding solar to your home can raise the value of your property, thus raising your property taxes.
What is the Pennsylvania solar tax credit for 2023?
Pennsylvania doesn’t offer a state-specific solar tax credit at the time of writing. However, Pennsylvania residents can take advantage of the federal solar tax credit (ITC), which is worth up to 30% of your system cost as of 2023.
