Is Solar Worth It in Pennsylvania? (2022 Homeowner's Guide)
Here’s a quick overview of solar viability in Pennsylvania:
- Pennsylvania ranks 23rd in the country for solar installations*
- The average cost of electricity is 13.58 cents per kilowatt-hour (kWh)**
- The average solar payback period is 11 years***
- Homeowners are eligible for Solar Renewable Energy Credits (SRECs) and the federal solar investment tax credit (ITC)
- The average homeowner saves $23,634 over the lifetime of their solar system***
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Pennsylvania ranks 23rd in the country for solar installations, and with residents paying only slightly above-average prices for electricity and using less energy than most US homeowners, many Pennsylvanians wonder if an investment into a solar power system is worth it. For most people, it is, but solar isn’t ideal for everyone and isn’t guaranteed to save you money if your home isn’t a good fit. Below, we’ll be discussing how you can assess your own home’s solar viability to figure out if solar is a good investment for you. We’ll also discuss the benefits of going solar and some things you need to think about and decide in order to have the best experience possible.
How to Figure Out if Solar Panels are Worth It in Pennsylvania
Solar panels will save most Pennsylvania homeowners quite a lot of money, but only if their homes are suited for solar conversion. Below are the metrics you can use to figure out if your home is a good candidate for solar.
What’s Your Home Electricity Consumption?
The first thing you’ll want to look at is your average monthly energy consumption, which you can typically check on your past electric bills. Solar panels provide savings on energy bills, which means the more you consume each month, the more valuable your solar power system will be. A general rule of thumb is that a home that consumes less than 500 kWh each month might not benefit enough from solar panel installation to make it worth it. The average Pennsylvanian uses around 846 kWh monthly, which is just below the national average but well above the threshold for solar viability. As such, solar will be worthwhile for most Pennsylvania residents, but the photovoltaic (PV) equipment as a whole will be a bit less valuable than it would in most other states in terms of energy consumption.
How Much Is It To Go Solar in Pennsylvania?
The price of solar panels in Pennsylvania is around $2.55 per watt, which is well below the average of $2.66 throughout the rest of the country. With most Pennsylvania homeowners requiring around an 8.5-kilowatt system, that brings the average total to $16,040 after the federal tax credit is applied. Solar panels provide more value in states where energy consumption or the electricity rates are high. In Pennsylvania, the electricity consumption is just below average, as is the price of energy. Normally, this would mean solar is slightly less valuable in Pennsylvania than in the rest of the country, but the low price for solar equipment means your dollar goes further, so panels are slightly above average in their overall value in Pennsylvania.
What’s the Payback Period for Solar in Pennsylvania?
Many homeowners don’t realize that installing solar panels usually pays for itself over time, as the solar energy system provides electric bill savings that eventually add up to more than the system cost. The time it takes for this to happen is called the solar panel payback period, and it’s an important metric to consider when determining your solar viability. The average payback period in Pennsylvania is around 11 years, with a standard range of 8 to 14 years. This is below the national average of 12 years, which suggests once again that solar panels are a bit more valuable in Pennsylvania than in most other states. If your estimated payback period is longer than 14 years, your return on investment (ROI) will be lower, and solar might not be right for you, depending on your financial situation.
What Are Average Buy-Back Rates in Pennsylvania?
One of the most common solar incentives mandated in most states is net metering, which allows solar customers to sell excess energy produced by their panels to their utility companies for a credit to their electric bills. Net metering helps bump up your ROI and shorten your payback period, so it’s very helpful for solar customers. Pennsylvania mandates net metering for all investor-owned utilities (IOUs) and requires that you get compensated for outgoing energy at the full retail rate per kWh. This is massively beneficial for Pennsylvania residents. In many other states, less favorable net metering programs require homeowners who want to eliminate their electric bills to buy a solar battery rather than send energy to the electric grid, which can cost thousands. Thankfully, this usually isn’t the case in Pennsylvania.
How Much Sun Does Your Roof Receive?
Solar panels absorb sunlight, which is what they use to produce electricity. The more sun your panels and roof receive, the more energy your solar system will produce and the more you’ll save on your power bills. Pennsylvania experiences around 179 sunny days annually, which is well below the national average of 205. The below-average sunlight availability does make solar panels a bit less efficient and valuable, but most homeowners will find that the sunlight is sufficient to save money over time. There are some factors specific to your home that you need to check as well. First, you should determine what direction your roof faces. South-facing roofs are the best option in the US for sun exposure, and west-facing roofs can also work in many cases. You will also need to check your roof for shading from trees and buildings, particularly during the peak production hours. Any shading will reduce efficiency and your panels’ overall value.
What’s the Outlook on Solar in Pennsylvania?
Solar is looked upon favorably in Pennsylvania, but it’s far from the most widely used renewable energy source in the area. Biomass is the leading clean energy source in Pennsylvania, but the large majority of energy produced in the state comes from coal, natural gas and nuclear power.3 Pennsylvania is one of the largest producers of power from coal in the country, so it’s unlikely that solar will overtake energy production from that fossil fuel anytime soon. With that being said, the solar industry in Pennsylvania has grown quite a lot in the last five years, and residential solar installations are nearly ten times higher now than they were a decade ago. Utility-scale solar and commercial solar are also picking up in the Keystone State. The likelihood is that the solar market in Pennsylvania will continue to grow as solar becomes more affordable and accessible. This is especially true given the solar incentives in Pennsylvania, the favorable policies afforded by the state and the Alternative Energy Portfolio Standards Act, which established a lofty Renewable Portfolio Standard (RPS) goal for the state.
Benefits of Solar Energy in Pennsylvania
Going solar in Pennsylvania means you’ll gain access to numerous benefits. We’ll discuss the most significant upsides of installer solar panels in Pennsylvania below.
Electricity Bill Savings
In terms of financial incentives, there is nothing more appealing about going solar than the savings you’ll enjoy on your electric bills. The average Pennsylvanian spends around $114.90 per month on energy. With the great net metering policy in PA, it’s relatively easy to eliminate your electric bills and save an average of $1,379 per year on power. After these savings offset your panels and pay for your system cost, they are expected to save you an additional $23,634 over the remaining equipment lifespan. These savings could be even higher for you if the electricity prices continue to go up, as they are expected to do. Solar panels essentially let you lock in a lower price per kWh for 25+ years, so you could save even more.
Lower Taxes & Access to Other Incentives
Pennsylvania is considered a fairly solar-friendly state, mostly because it provides residents access to tax breaks and other solar incentives. One of the most significant incentives is the federal solar tax credit (ITC), which is offered by the federal government. The ITC is a credit to your federal income taxes for 26% percent of your total solar panel system cost. The standard ITC in Pennsylvania is a massive $5,636. There are some additional Pennsylvania solar incentives offered on the state level, which we’ll explain briefly below:
- Solar Renewable Energy Certificates (SRECs): SRECs are energy credits you earn for every 1,000 kWh (or 1 megawatt-hour) your panels produce. SRECs held a value of around $35 in 2021, and you can sell them on the SREC market for a profit.
- Net Metering: As mentioned above, net metering is mandated in Pennsylvania for all investor-owned utilities (IOUs). Net metering helps you eliminate your utility bills, reduce your payback period and bump up your return on investment when converting to solar.
- Local Solar Rebates and Incentives: In addition to the above benefits, there are some local solar incentives that are offered in specific counties or cities. For example, the City of Philadelphia offers a solar rebate for $0.20 per watt installed — an average of $1,700 in the area.
Home Resale Value Increase
One solar benefit that most homeowners fail to consider is the bump in home value solar panels provide. When you install a solar power system, your property value will increase by around 4.1%, according to estimates from Zillow.4 In Pennsylvania, where the average home value is around $257,272, most residents will see a value increase of approximately $10,548.5 As is the case with several other solar incentives, this increase in value is only applicable if you use a solar loan or a cash purchase to acquire your panels. Solar leases and power purchase agreements (PPAs) are not expected to raise your home value at all.
Clean, Renewable Energy
Not all of the benefits of going solar are financial, as installing solar panels will also make your home more eco-friendly. Converting to clean energy means reducing your reliance on fossil fuels, reducing your carbon footprint, reducing your contribution to climate change and minimizing how much pollution you produce. You will also gain some energy independence, which means you can avoid electricity rate hikes in the future.
What to Look Out For When Considering Solar in Pennsylvania
Even after you confirm that solar is a good investment for your home, there are quite a few things you’ll need to think about and decide on before you move forward with the installation. We’ll include some additional considerations you’ll need to make below.
The upfront cost of solar panels can be quite high and might seem prohibitively expensive to some homeowners, even in areas like Pennsylvania, where the cost per watt is lower than average. Thankfully, there are some things you can do to bring down your upfront costs. Most importantly, you can choose a solar financing option that doesn’t require a large down payment. Avoiding add-on products like solar batteries and electric vehicle chargers can keep your total costs down as well. Finally, you can choose a more affordable solar panel brand, although you will be sacrificing durability and efficiency in most cases.
Estimating your solar panel payback period is a crucial step in determining your solar viability, and the estimate can also help you figure out your expected return on investment. The average payback period in PA is 11 years, with most homeowners’ timelines falling between 8 and 14 years. If yours is longer than 14 years, you’ll still very likely save money, but your ROI will be lower than average, and it will take you longer to recuperate your investment.
Net Metering Policies in Pennsylvania
Net metering is mandated for investor-owned utilities (IOU) only in PA, and the buy-back rate is required to be at least the retail rate. The policy specifics can vary, though, including what happens to unused credits. You should check with your power provider for information on the policy available to you. Net metering policy specifics usually don’t make or break solar viability, but if you aren’t serviced by an IOU and don’t have access to net metering, you might need to pay more for a solar battery if you’re looking to eliminate your electric bills.
Pending Policies & Changes to Incentives
The solar industry is still expanding and maturing, so it’s important to note that the policies and incentives mentioned above are always subject to change. Although it’s not usually wise to wait for better incentives to come along, we do recommend checking for updates to incentives and policies and confirming if any programs have expired before you sign anything with your solar installer.
Weather & Climate in Pennsylvania
Many residents in Pennsylvania worry that the frequent cloudy weather in the area will make solar a poor investment. While the state does receive fewer sunny days than the national average, there’s still plenty of sun for most homeowners to benefit from solar and save quite a lot over time. Some homeowners also worry that the above-average snowfall and the northern location of PA will make solar less efficient and valuable, as sunlight is more intense the closer you get to the equator. Snow coverage will limit power production from your panels, but it also serves to keep them clean, which can maximize production once the snow clears. Additionally, while PA experiences long, cold winters with less intense sunlight, electricity travels more quickly in the cold, so you’re still expected to get decent efficiency in the winter.
Companies Pushing Solar Leases or PPAs
Finally, you need to be careful when choosing a solar panel installation company to handle your home solar project. Some companies will advertise “free panels” that seem appealing, but this is really just a marketing scheme to get you to sign a solar lease. These companies generally don’t have your best interests at heart, as solar leases aren’t as beneficial as solar financing; they don’t bump up your home value, they don’t let you take advantage of some tax incentives (namely, the ITC) and they provide fewer savings over time. Unfortunately, the growing popularity of solar in Pennsylvania has led some disingenuous companies to scam homeowners out of money. A local law firm, Flitter & Milz, dedicates much of its resources to helping victims of solar scams in Pennsylvania, which typically originate with aggressive door-to-door sales tactics.6 Homeowners in Lancaster have also complained about shady business practices from their installers, including not pulling permits for the solar panels, failing to connect them and overstating savings.7 It’s important that you only ever work with a reliable and vetted solar company to avoid these and other issues.
Wrap Up: Is Solar Worth it in Pennsylvania?
Solar panels are an outstanding investment for most Pennsylvania homeowners, who end up saving tens of thousands of dollars in most cases. However, not every home is equally suited for solar conversion, so determining if your property is a good candidate is a crucial first step in your solar journey. Some things to remember to consider include your average monthly energy bills, your home’s energy efficiency, the direction your roof faces, your total system cost, the net metering policy available to you and more. We suggest contacting a reputable and experienced solar installer to help you decide if solar panels are a good investment for your home.
Frequently Asked Questions
The EcoWatch team is pleased to get questions regularly from Pennsylvanians about the potential savings and benefits of going solar. Below, we’ll include some of the most frequent questions we see, along with our responses.
The average solar panel payback period in Pennsylvania is around 11 years, but any time between 8 and 14 years is considered normal. You can use a solar calculator to estimate your payback period or have an experienced solar panel installation company come assess your home and do the calculation for you.
In most cases, yes, solar panels will save you money over time. Installing solar means you’ll be reducing your energy bills. Given the outstanding net metering policy in Pennsylvania, it’s relatively easy for most homeowners to eliminate their energy bills altogether. With an average monthly expenditure of $114.90 in PA, you stand to save around $1,379 every year with your solar energy system. After your solar panels pay for themselves, they will save an average of $23,634 over their remaining lifespan.
Yes, solar panels will increase the value of your home, but only if you use solar financing or cash to purchase them. Solar leases and power purchase agreements (PPAs) will not cause your home’s value to increase. According to estimates from Zillow, the average value bump from installing solar panels is around 4.1%, which equates to a typical increase of $10,548 in Pennsylvania.
Yes, permits are required for solar panel installation in PA. In most cases, your solar company will handle the permitting process with your local government agency, and they will usually include the cost of the permits in the estimated system total.
You can install your own solar panels in Pennsylvania, but it’s a much better idea to let the professionals do the work for you. Installing a rooftop solar system is dangerous, and any mistakes could lead to roof leaks, property damage, or damage to your solar PV equipment. We strongly recommend avoiding a DIY solar panel installation.