Pennsylvania Solar Incentives: Tax Credits & Rebates Guide (2023)

If you live in Pennsylvania, the odds are that you have never thought much about installing solar panels on your home. But thanks to the development of new technology and a range of financial incentives, it is now a worthwhile venture to purchase photovoltaic (PV) systems throughout the United States, especially in Pennsylvania. By having a solar power system in your home, you can ensure minimal initial costs and steady savings for decades to come.

For these reasons and more, it is a great time to buy a new solar energy system in Pennsylvania. Keep reading to learn all about how your purchase and installation of solar panels in Pennsylvania can be made more financially accessible.

Why Go Solar in Pennsylvania?

Although it may not have a wealth of sunshine, Pennsylvania is a great place to invest in solar. With an average of 179 sunny days per year, Pennsylvania is well below the American average of 205 sunny days per year. Nonetheless, rapid improvements in photovoltaic technology have increased the efficiency of solar panels so that even cloudier and colder climates can sustain solar energy production. Now, whether you live in the remote desert or downtown Pittsburgh, you can benefit from the electricity produced by solar panels.

Pennsylvania is also an excellent state to purchase solar energy systems because of the existence of federal, state-level, and local financial and tax incentives designed to lessen the cost of buying and installing solar panels. Specifically, the government of Pennsylvania has a Renewable Portfolio Standard, which encourages renewable energy production by mandating that a specific amount of electricity produced in the state be derived from renewable sources.

Residents of Pennsylvania additionally benefit from the preexisting availability of local solar providers throughout the state. These providers offer customers the opportunity to entertain a variety of competing quotes while making sure that they receive the best quality service and equipment.

Finally, solar panels can dramatically increase your home’s value. According to Zillow, the average home experiences a 4.1% increase in its value after the addition of a solar power system. In the United States, the average median-valued home sees its value increase by $16,337 after the installation of a solar energy system.

Pennsylvania Solar Cost

The total cost of solar installations in Pennsylvania ranges from $12,792 to $17,308. On a cost-per-watt basis, solar panel installation in Pennsylvania is between $2.56 and $3.46. These costs have come down significantly in recent years. Obviously, if you purchase a larger system (more watts), you will end up spending more to gain additional energy production. With energy bills increasing amid high oil and gas prices, the relative cost of solar is surely bound to continue declining.

How Much Can You Save on Solar in Pennsylvania?

Although you may face steep upfront costs to purchase and install your solar system, you can save lots of money per year, thanks to the electricity your system produces. The mechanism behind the savings functions in this manner: when solar panels produce electricity for your home, they reduce the amount of energy that you pull from the grid, thus lowering your utility bills.

People living in Pennsylvania save as much as $42,425 to $51,852 over a 25-year period. With a payback period of 5.4 to 6.6 years, you can find yourself saving thousands of dollars per year in just over half a decade after purchasing your photovoltaic (PV) equipment.

The Best Solar Incentives, Tax Credits, & Rebates in Pennsylvania

There are several public and private incentives in Pennsylvania that help you save on your purchase of solar panels in Pennsylvania:

Incentive	Summary	End Date
Federal Solar Tax Credit (ITC)	The Federal Solar Investment Tax Credit (ITC) is a 30% federal tax credit available for home solar systems purchased and installed by the end of 2032, thanks to the recent passage of the Inflation Reduction Act.	December 31st, 2032
Net Metering	Net metering allows Pennsylvania homeowners that create excess energy to use it as a credit on their next electric bill. All energy providers are required to offer this option to homeowners.	None
Solar Renewable Energy Certificate (SREC)	Pennsylvania offers a Solar Renewable Energy Certificate (SREC) program that lets you earn energy credits for every kilowatt-hour (kWh) of solar energy your system creates. Each year, you might be able to make money by selling your solar credits in the SREC market.	None
City of Philadelphia Solar Rebate Program	Residents of Philadelphia can get up to $200 rebates for every kilowatt (kW) of solar power purchased and installed.	None
USDA REAP GRANT	REAP assists agricultural producers and rural small businesses reduce their energy costs and consumption by providing loan financing and grant funding to purchase and install renewable energy systems. Eligibility for the REAP program is dependent on you being an agricultural producer, with at least 50 percent of your gross income coming from agricultural operations and small businesses in eligible rural areas.	None

Federal Solar Investment Tax Credit (ITC)

The Federal Solar Investment Tax Credit (ITC) is a 26% federal tax credit available for home solar systems purchased and installed by the end of 2022. This is a large chunk of money taken off their personal income taxes. Plus, the ITC has done a great job expanding the country’s solar industry. It has helped create hundreds of thousands of jobs while bringing billions of dollars into the economy since being enacted in 2006.

Pennsylvania Solar Property Tax Exemption

Unfortunately, Pennsylvania will not exempt property taxes on the added value to your home that comes with installing a solar energy system.

Pennsylvania Net Metering

Electricity companies in Pennsylvania have all adopted net energy metering, which is a policy that ensures your solar panels will be connected to the utility companies’ power grid, and that surplus power created by your panels will be transferred to the grid. You can offset the cost of power drawn from the electricity grid as a result of net metering.

The minimum amount of compensation that you’ll receive is the avoided-cost rate, which is below the retail rate. While the policy specifics of net metering programs will vary among providers, it remains hugely beneficial for owners of solar energy systems.

Solar Renewable Energy Certificate (SREC)

Pennsylvania offers a Solar Renewable Energy Certificate (SREC) program that lets you earn credits for every kilowatt-hour (kWh) of solar energy your system creates. Each year, you might be able to make money by selling your solar credits in the SREC market.

City of Philadelphia Solar Rebate Program

Residents of Philadelphia can get up to $200 rebates for every kilowatt (kW) of solar power purchased and installed.

Pennsylvania State Sales Tax Exemption,

Unfortunately, the state of Pennsylvania does not offer a sales tax exemption for the purchase of solar energy systems.

Commercial Pennsylvania Solar Incentives

Solar Incentives for Nonprofits and Businesses in Pennsylvania

Unfortunately, Pennsylvania does not offer many, if any, specific incentives for nonprofits and businesses.

USDA REAP Grant

The United States Department of Agriculture (USDA) has launched a program designed to increase investments in clean energy called the Rural Energy for America Program (REAP). REAP helps agricultural producers and rural small businesses lower their energy costs and consumption by financing loans and grant funding to purchase and install renewable energy systems.

You are eligible to participate in the REAP program if you are an agricultural producer with at least 50 percent of your gross income coming from agricultural operations or a small business in eligible rural areas.

Key Takeaways: The Best Pennsylvania Solar Incentives

Pennsylvania is an excellent state to purchase solar energy systems. While it may not be the warmest or sunniest state, Pennsylvania offers a variety of incentives to make it worth your while to invest in solar. There is really no reason not to buy a solar energy system, especially with variable energy prices around the world and climbing utility bills at home. If you are interested in purchasing, there are many great companies that will help get you set up.

House Method’s Solar Companies Rating Methodology

At House Method, transparency and trust are our most important values for the reader. That’s why we took the time to create an objective rating system and score each solar energy company/service according to our methodology.

Our research team dug deep into the fine print of contracts, combed through more than one hundred customer reviews, and thoroughly investigated all of each solar energy company’s services, costs, and products. We’ve done the homework for you by researching nearly all of the solar energy companies on the market so you can have the information you need to make the best choice for your home.

We developed a formula to objectively determine the best solar energy companies and give each a score out of 100 based on the following criteria:

• Plan Options (30): Do they provide a variety of plan options? We looked at the number of plans each solar energy company offered and the flexibility of adjusting the plan.
• Services offered (20): How many services are offered in each plan? We looked at whether the company manufactures its own solar panels, whether it contracts out installation, and what additional products each company offers.
• Trust (10): What do customers say after their solar panels are installed? Does this company offer a guarantee? We considered how satisfied customers are post-service if the company does what it says it will, BBB accreditation, and service guarantees.
• Prices (10): How reasonable are the costs of the plan or service in comparison to the industry average? We compared the costs of each company to competitors that offer the same solar energy services.
• Unique perks (10): Does the company offer discounts or special services such as financial incentives, rebates, or a useful mobile app? We looked for extras each company offers that set them apart from the competition.
• Customer Service (10): How is the customer experience when contacting the company? We considered the speed of response, weekend/holiday availability, and ease of communication through phone calls, email, and online chat functions.
• Nationwide availability (10): How many states does the company offer its services? Companies that operate nationally and in all zip codes are favored over those with limited availability.

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