2022 Pennsylvania Solar Tax Credits, Rebates & Other Incentives
Here’s a quick look at the solar incentives in Pennsylvania:
- Federal Solar Tax Credit (ITC)
- Solar Renewable Energy Certificates (SRECs)
- Net Metering
- Additional City & Utility Rebates
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Our solar experts have sifted through hundreds of local governments’ and utility companies’ websites to find accurate information about current solar incentives in each state. We’ve also unbiasedly ranked and reviewed hundreds of solar installers to empower you to make the right choice for your home.
How Much Can You Save With Solar Incentives in Pennsylvania?
In this article, we’ll discuss the solar incentives and rebates available to Pennsylvania homeowners. When you’re ready to speak with a qualified professional, follow the links below. Each of these companies can help you identify and apply for incentives available in Pennsylvania.
Jump to Section:
- Solar Rebates, Tax Credits and Incentive Programs in Pennsylvania
- Net Metering in Pennsylvania
- Federal Solar Tax Credit
- FAQ: Pennsylvania Solar Incentives
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Solar conversions in Pennsylvania have never been more affordable than they are right now. However, with the average cost per watt of $2.55 and the typical system size in PA of 8.5 kilowatts, homeowners can still expect to pay an average of $21,675 to complete their solar projects. This total can be a large pill to swallow for PA residents, and as much as homeowners want to reduce their carbon footprints, that benefit is often not enough to justify spending over $20,000.
Thankfully, there are a number of incentives offered by the state and federal governments that make solar more affordable upfront and also more enticing. Below, we’ll discuss the solar incentives and tax credits available in Pennsylvania and how each can have an impact on the total you spend to convert to clean energy.
Disclaimer: This article is for informational purposes only. It should not be relied on for and is not intended to provide accounting, legal or tax advice.
Current Solar Rebates, Tax Credits and Incentive Programs in Pennsylvania
First, we want to provide a quick overview of the solar incentives available in Pennsylvania, and the table below will do just that. We’ll also include more details about each PA solar incentive further below.
| Pennsylvania Solar Incentive | Description |
| Federal Solar Tax Credit (ITC) | The federal solar tax credit is a solar incentive provided by the federal government that is available to all PA residents. It’s a credit for 26% of your total system cost that gets applied to your federal tax liability the year you turn on your system.1 In PA, with the average system cost of $21,675, the typical credit amount is $5,636. |
| Solar Renewable Energy Certificates (SRECs) | Pennsylvania has an SREC program that lets homeowners earn energy credits for the power their panels put out (1 credit for every 1,000 kilowatt-hours produced). Those credits can then be sold on the SREC market, with a current value of between $35 and $40.2 We’ll include more information about this process below. |
| Net Metering | Net metering is a benefit of overproducing energy with your panels. Most homes with solar systems inevitably have to pull energy from the grid, but the cost of that electricity can be offset by the excess energy the panels have produced via PA’s net metering program.3 We’ll include additional information about net metering in Pennsylvania below. |
| Local City & Utility Rebates | In addition to all of the above solar incentives, certain municipalities and utility companies provide rebates for installing solar or for energy efficiency upgrades. We’ll get into specifics below. |
Pennsylvania Solar Tax Credit
Many states have a state solar tax credit in addition to the federal tax credit, and combining both credits typically makes solar far more affordable for homeowners, enticing them to convert to this alternative energy source. Unfortunately, PA does not have a state tax credit. Still, the other incentives are often enough to push residents to adopt solar.
Other Pennsylvania Solar Incentives
Pennsylvania’s Renewable Portfolio Standard (RPS) goals came to an end in 2021, but the state has set up pro-solar programs that are still in place and will benefit any homeowner converting to solar. We’ll discuss some of the other statewide solar incentives that help keep this clean energy solution a sound investment despite the lack of a state solar tax credit.
Solar Renewable Energy Credits (SRECs)
SRECs are one of the most appealing benefits to going solar and can help homeowners offset or eliminate their energy bills. You’ll earn one SREC for every 1,000 kWh (1 megawatt-hour/mWh) produced by your panels.
The typical 8.5-kW system required to offset electric bills in PA is expected to produce over 10 SRECs per year.4 SRECs can then be sold on PA’s SREC market to utilities looking to report higher renewable energy production. The current value of SRECs in PA is between $35 and $40, meaning the typical home solar system in the state should yield between $350 and $410 per year.
With an appropriately sized solar system, most PA residents shouldn’t have large utility bills — and many homeowners pay nothing at all for electricity — so the SREC payments could be profit used to pay off the system more quickly.
Net Metering in Pennsylvania
Net metering is another great benefit of going solar in Pennsylvania and, when combined with SRECs, makes it very possible to eliminate your electric bills altogether.
Net metering is a billing policy offered by many utility companies and mandated in a number of states. Through interconnection, your home can receive power from the grid when your panels don’t produce enough to cover what you’re using — like on cloudy days or at night. On the other hand, when you produce more than you’re using, your system will send the excess energy to the grid. Net metering allows you to offset what you pay for energy coming in with energy going out.
Pennsylvania has an excellent net metering policy that is enormously beneficial to homeowners. It states that all investor-owned utilities (IOUs) must offer net metering and, most importantly, that the energy you send to the grid be compensated at the full retail value. As such, every kilowatt-hour you overproduce and route to the grid will exactly offset one kilowatt-hour you pull from the grid. This policy applies to any system up to 50 kilowatts and, since most homeowners in PA have an 8.5-kW system, applies to most solar customers in the state.
Keep in mind that not all electric utility companies have to provide access to a net metering program, and there are some additional restrictions. You should check with your electricity provider for more details.
Pennsylvania Solar Sales & Property Tax Exemption
Sales tax on a system that costs above $20,000 can quickly add up, which is why many states provide a sales tax exemption on solar equipment. Unfortunately, Pennsylvania does not have a sales tax exemption on solar equipment or installation.
Many states also provide a property tax exemption to prevent solar systems from causing your property taxes to increase. Unfortunately, Pennsylvania also doesn’t have a property tax exemption for solar energy systems. When you carry out a home improvement in the state, that increases your home value, and your assessed value and your property taxes will also go up. Since solar panels bump up your property value, installing solar in PA will affect your property taxes.
Local Incentives
In addition to the incentives discussed above that are statewide, there are some more local incentives and rebate plans afforded by certain municipalities and utility providers in PA.
Two of the most significant local rebates come from the City of Philadelphia. Philly offers $0.20 per watt installed, which comes out to an average of $1,700 back for the typical 8.5-kW system installed in Pennsylvania.4 Installing solar also requires permits to be filed with your governing municipality, and Philadelphia offers a rebate for all permit costs associated with installing your solar panels. This can come out to several hundreds of dollars in reimbursements.
Local utility companies can also offer rebate programs for energy-efficiency upgrades. The rebates for things like solar water heaters, LED lighting, high-efficiency appliances and other upgrades are less than the $1,700 rebate for solar systems in Philly, but they still help you save while making your home more energy-efficient. You can check the DSIRE database for more information on local rebates.4
Federal Solar Tax Credit
Finally, all Pennsylvania homeowners who finance solar panels or buy them outright have access to the federal solar investment tax credit (ITC). This incentive is provided by the federal government and gets applied to your federal income taxes owed for the year your system is installed. The credit is for 26% of your total solar system cost, which, in Pennsylvania, averages out to a massive $5,636.
The federal tax credit will drop to 22% for systems installed and commissioned in 2023, meaning the typical credit in PA will dip from $5,636 to $4,769. The credit will no longer be available for residential solar systems in 2024 unless Congress renews it. As such, you’ll need to install solar as soon as possible to get the most significant benefit possible from the ITC. Commercial solar systems will still be eligible for a 10% ITC in 2024.
Related Topics
- Is Going Solar in Pennsylvania Worth It?
- What Do Solar Panels Cost in Pennsylvania?
- What Are the Best Solar Companies in Pennsylvania?
- 2022 New York Solar Incentives, Tax Credits, Rebates (And More)
- 2022 Maryland Solar Incentives, Tax Credits, Rebates (And More)
- Cost of Solar Panels in Ohio: Local Solar Installation Prices (2022)
FAQ: Pennsylvania Solar Incentives
We get questions from Pennsylvania homeowners routinely about the process of going solar and the incentives they can take advantage of when installing panels. Below are some of the questions we see most frequently.
Unfortunately, Pennsylvania does not have a state solar tax credit. However, the federal solar tax incentive is available to all PA residents and comes out to an average credit of $5,636 applied to your federal income tax liability. Pennsylvania has other solar incentives as well to entice homeowners to convert to clean energy, including a favorable net metering program and an SREC program.
Yes, there are quite a few solar incentives available in PA in 2022. Perhaps most importantly, PA has a great net metering program that helps homeowners offset their electric bills using excess energy production from their panels. This helps many residents eliminate their electricity costs, especially since the credit for outgoing energy is equal to the cost of incoming energy.
Pennsylvania also has an SREC market. For every 1,000 kilowatt-hours your system produces, you’ll earn one Solar Renewable Energy Certificate (SREC). The typical system in PA will produce more than 10 SRECs annually, and these can be sold for a profit on the local SREC market. The current rate is between $35 and $40 per SREC.
There are additional local incentives as well.
Unfortunately, there are no statewide rebates for converting to solar power in Pennsylvania, but some residents can take advantage of local rebates. For example, the City of Philadelphia provides a rebate in the amount of $0.20 per kilowatt installed. Given the average system size of 8.5 kilowatts needed in PA, that’s a typical rebate of $1,700. Philly also reimburses the cost of permits, which can be hundreds of dollars. Other municipalities and local utility companies can provide smaller rebates as well, which you can check on the DSIRE database.
Unfortunately, yes, solar panels will cause your property taxes to increase in Pennsylvania. Any home improvement that bumps up the value of your home will also affect your assessed value and your property taxes. Since solar panels add value to your property, your taxes will increase as a result. Many states provide a property tax exemption to prevent this from happening, but PA does not. However, the other incentives still make going solar a worthwhile investment for most Pennsylvania homeowners.
