Solar Incentives for Pennsylvania Residents

Over the past decade, rooftop solar panels have gone from being a rarely seen novelty item to a regular feature of the American landscape.

Part of the reason is that increased efficiency together with steadily declining production costs flipped the cost-benefit analysis. Whereas 30 years ago switching to solar power would have been more expensive than sticking with a utility company, today typical American homeowners can significantly lower their overall energy expenses with a simple rooftop system.

But better and cheaper solar panels aren't the whole story. Government incentives have also played a big part in making solar power a money-saver.

The Solar Investment Tax Credit

The biggest upfront incentive comes from the federal government in the form of the Solar Investment Tax Credit (ITC),. The ITC allows you to deduct 30% of the full cost of installing a solar system from your federal income tax.  And, of course, a 30% discount is nothing to sneeze at.

But the ITC isn't the only solar incentive being offered. Each state also has its own individual way of encouraging residents to switch to clean and renewable solar power.

So, we thought it would be worth going over the solar power incentives available to Pennsylvania residents.

Net Metering

       Pennsylvania has what's known as "full retail net metering." That means you’ll be compensated for any excess solar energy you send back into the grid at the very same rate your utility company charges.

       So, the extra solar power your panels are likely to produce during peak sunshine is effectively banked to power your home during the vast majority of the time there’s little or no sun. That makes it possible for a simple rooftop system to meet most or even all of a typical PA resident’s annual energy needs.

         But Pennsylvania's net metering policies are even better.

  •        Unlike many states that have instituted net metering, Pennsylvania doesn’t allow utility companies to effectively welch on their obligation to pay the full retail rate for the energy you send back to them by adding exorbitant surcharges.

  •        Many states have an end-of-the-year tally, at which point residents lose any accumulated credit for the solar energy they’ve sent back into the grid. Whereas in PA, the big utility companies are required to give residents an end-of-the-year payout for any surplus.

  •        Pennsylvania is also one of the few states that require virtual net metering. That means that you can use credits you’ve gained from sending solar energy back into the grid at one property to pay for energy you took from it at another.


        SREC stands for Solar Renewable Energy Credit. Pennsylvania is one of only seven states that uses SRECs to incentivize rooftop solar.

       In states with the incentive, you’re awarded one SREC for every 1,000 kWh of solar energy your solar system produces. Utility companies then purchase your SRECs to offset the state’s mandated renewable energy targets.

Pennsylvania SREC prices have been steadily rising since January 2021. PA SRECs are now selling at $46, the highest price in over three years.

The average home uses around 10,700 kWh of electricity annually. That means a solar system capable of powering it would earn 10 SRECs every year.

At current PA prices, that amounts to an extra $11,500 to $13,800 over your system's 25-to-30-year expected lifetime.

Philadelphia Solar Rebate Program

       Philadelphia residents who transition to clean and renewable solar energy can take advantage of another incentive.

       Philly's Solar Rebate Program awards residents $200 for every kilowatt (kW) of solar power they install. That reduces the cost of an average-sized 6 kW solar system by another $1,200.

      All told, the facts about solar energy in PA are clear.

      Pennsylvania might not be the sunniest state, but typical PA residents who go solar are nonetheless considerably likely to brighten their financial future.

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