Pennsylvania Solar at a Glance
Pennsylvania isn’t California or Florida — the Commonwealth gets roughly 4.0–4.5 peak sun hours per day, below the sunbelt states but above the national average and comparable to New York, New Jersey, and Massachusetts. That makes it a solid — not exceptional — solar market. But what Pennsylvania lacks in sunshine it partially makes up for in above-average electricity rates and one of the more unique incentive structures in the country: the SREC (Solar Renewable Energy Certificate) program.
Pennsylvania electricity rates run $0.15–$0.18/kWh on average — roughly 25–30% above the national median. Every kilowatt-hour your panels produce replaces a relatively expensive one from the grid, making solar more cost-effective per installed watt than in lower-rate states.
Critical context for 2026: The 30% federal residential solar Investment Tax Credit (ITC) expired December 31, 2025. For Pennsylvania homeowners installing solar in 2026, there is no federal tax credit. This changes the ROI math compared to prior years — but Pennsylvania’s SREC income, property tax exemption, and sales tax exemption still deliver meaningful financial benefits. This guide covers every incentive still available in 2026.
The bottom line for 2026: Without the federal ITC, a typical Pennsylvania homeowner on PECO (Philadelphia) or Duquesne Light (Pittsburgh) investing in an 8–10kW system can still expect 25-year net gains of $30,000–$50,000 — driven primarily by SREC income, energy bill savings, and PA’s property and sales tax exemptions.
The Federal ITC Is Gone — Here’s What That Means for PA
The 30% federal residential solar Investment Tax Credit expired December 31, 2025. For homeowners who installed solar before that date, the ITC was a dollar-for-dollar reduction in federal tax liability — a $30,000 system effectively cost $21,000 after the credit. For 2026 installations, no federal solar tax credit exists.
This is a real change that affects the economics. On a $27,000 Pennsylvania system, the credit used to cut the out-of-pocket cost by $8,100. That savings is gone. However, Pennsylvania homeowners are not starting from zero — the SREC program, state tax exemptions, and net metering remain intact and deliver real value.
What Pennsylvania homeowners should NOT do: Assume that solar is no longer worth it because the federal credit is gone. The credit was a bonus, not the foundation. The foundation — rising electricity rates, good sun exposure, and PA’s incentive structure — remains. Evaluate solar on its current merits, not against pre-2026 benchmarks.
PA Solar Incentive #1: SREC Income — Your Biggest Ongoing Benefit
Pennsylvania’s Solar Renewable Energy Certificate (SREC) program is the state’s most distinctive solar incentive and the one most PA homeowners don’t fully understand until they’re already in the process.
Here’s how it works: every megawatt-hour (1,000 kWh) your solar system produces earns you one SREC. SRECs are tradeable certificates that Pennsylvania’s Alternative Energy Portfolio Standard (AEPS) requires electricity suppliers to purchase. Your installer or an SREC aggregator sells them on your behalf. The market price fluctuates based on supply and demand — in 2026, PA SREC prices run roughly $30–$45 per credit.
For a typical Pennsylvania system:
- 8 kW system: produces ~10,500 kWh/year → earns ~10–11 SRECs/year → SREC income of $300–$495/year
- 10 kW system: produces ~13,000 kWh/year → earns ~13 SRECs/year → SREC income of $390–$585/year
Over a 25-year system life, that’s $7,500–$14,625 in cumulative SREC income. Most homeowners sign an SREC aggregation agreement when they install — your installer will typically handle this or refer you to an aggregator. Some homeowners hold and sell SRECs directly for potentially better prices; most use an aggregator for simplicity.
Note: SREC prices have fluctuated historically (they were higher in the early PA market and have settled lower as supply grew). Project conservative income ($30–$35/SREC) in your payback calculations rather than peak-market assumptions.
How much will solar save you in Pennsylvania? →
Enter your monthly electric bill and PA zip code. Get estimated annual savings, SREC income, system cost range, and payback period — specific to your PECO, Duquesne Light, or other PA utility territory.
Calculate My PA Solar Savings →PA Solar Incentive #2: Property Tax Exemption
Under 72 P.S. Section 4753-4 (Pennsylvania’s Uniformity Clause and solar-specific exemption provision), solar energy equipment is exempt from Pennsylvania property tax. This is meaningful because PA has no state-level property tax rate — but local school districts and municipalities assess property tax at rates that can reach 1.5%–2.89% of assessed value depending on the jurisdiction.
A solar system adds 3–5% to your home’s assessed value. On a $320,000 Philadelphia home, that’s $9,600–$16,000 in added assessed value. At Philadelphia’s effective property tax rate of roughly 1.89%, you’re looking at $181–$302/year in property tax savings — every year for the life of your system. Over 25 years, that’s $4,500–$7,500 in cumulative savings most homeowners never factor into their solar ROI calculations.
Pittsburgh-area homeowners (Allegheny County) see similar dynamics. The exemption applies statewide across all 67 Pennsylvania counties. Your installer handles the exemption filing through the county assessor — confirm this is included in their paperwork.
PA Solar Incentive #3: Sales Tax Exemption
Under Pennsylvania Statute 72 P.S. Section 7204, solar energy equipment and installation services are exempt from Pennsylvania’s 6% sales tax. This exemption applies to the equipment (panels, inverters, racking) and the installation labor.
On a $27,000 system, the sales tax exemption saves $1,620 in immediate, upfront cost. Your installer quote should not include PA sales tax. If it does, push back — the exemption is clear and well-established.
Note: PA has local option sales taxes (1%–2% in Philadelphia and some Allegheny County municipalities). Confirm with your installer whether local option taxes apply to solar in your jurisdiction — the state exemption covers the state portion at minimum.
Net Metering in Pennsylvania — By Utility
Pennsylvania Act 213 of 2004 (amended by Act 129) requires investor-owned utilities to offer net metering to residential solar customers. The details — credit rates, rollover policies, and annual caps — vary by utility.
PECO Energy — Philadelphia and Surrounding Counties
PECO serves approximately 1.7 million electricity customers in the Philadelphia metro and southeastern Pennsylvania. PECO’s net metering program credits excess solar production at the retail electricity rate. Credits roll month-to-month and are reconciled annually — excess credits at year-end are typically forfeited (confirm current policy with PECO before sizing). PECO rates run roughly $0.15–$0.17/kWh for typical residential customers.
Duquesne Light — Pittsburgh and Allegheny County
Duquesne Light serves the Pittsburgh metro with approximately 600,000 customers. Duquesne Light offers net metering with credits at the retail rate. Duquesne Light rates are among the higher in Pennsylvania at roughly $0.16–$0.18/kWh, making solar production more valuable here than in lower-rate territories. Pittsburgh’s industrial load history means residential rates have escalated in recent years — a good trend for solar ROI.
FirstEnergy Utilities — Penelec, Met-Ed, West Penn Power
FirstEnergy’s three Pennsylvania utilities (Penelec in north-central PA, Met-Ed in eastern PA, West Penn Power in southwestern PA) serve a mix of urban, suburban, and rural customers. Net metering is available; credit rates and caps vary by utility. Rates generally run $0.14–$0.16/kWh. Rural properties in these territories often have high usage and limited grid capacity — solar with battery storage is often a practical solution for properties that would otherwise face expensive utility upgrade requirements.
PPL Electric Utilities — Eastern and Central PA
PPL serves the Allentown/Bethlehem area and portions of central Pennsylvania. Net metering is available. PPL rates run roughly $0.14–$0.16/kWh. PPL has shifted its net metering structure in recent years — confirm current credit terms directly with PPL or your installer before sizing your system.
What size solar system does your PA home need? →
Enter your monthly bill and zip code. Get the exact kW recommendation for your home — factoring in Pennsylvania sun hours, your utility’s rate structure, and net metering credits.
Find My System Size →System Costs and Payback — Pennsylvania 2026
Installed solar in Pennsylvania runs $2.70–$3.60/watt in 2026. A typical 10kW system (right-sized for many PA homes with $175–$250/month electric bills) costs $27,000–$36,000 installed. The table below shows costs by system size — all figures are gross costs with no federal ITC (expired December 31, 2025).
| System Size | Est. Annual Production | Installed Cost | Cost Per Watt |
|---|---|---|---|
| 6 kW | ~7,800–8,400 kWh/yr | $16,200–$21,600 | $2.70–$3.60 |
| 8 kW | ~10,400–11,200 kWh/yr | $21,600–$28,800 | $2.70–$3.60 |
| 10 kW | ~13,000–14,000 kWh/yr | $27,000–$36,000 | $2.70–$3.60 |
| 12 kW | ~15,600–16,800 kWh/yr | $32,400–$43,200 | $2.70–$3.60 |
Annual production estimates assume 4.2 peak sun hours/day (PA statewide average). Cost ranges reflect market variation across PA installers. PA 6% sales tax exemption applied — solar equipment is tax-exempt in Pennsylvania.
Worked Example: Pittsburgh Homeowner on Duquesne Light
Here’s a realistic PA solar payback scenario with 2026 costs and incentives:
| Detail | Value |
|---|---|
| System size | 10 kW |
| Installed cost (no federal ITC) | $30,000 |
| Annual production (est.) | ~13,500 kWh |
| Annual electricity savings (at $0.17/kWh) | ~$2,295/yr |
| SREC income (~13 SRECs @ $35 each) | ~$455/yr |
| Property tax savings (est.) | ~$200/yr |
| Total annual benefit | ~$2,950/yr |
| Simple payback period | ~10–11 years |
25-Year Cumulative Savings Projection
Assuming 3.5%/year electricity rate escalation and 0.4%/year panel degradation (conservative):
| Year | Annual Savings | Cumulative Savings | Net Position |
|---|---|---|---|
| Year 1 | $2,950 | $2,950 | −$27,050 |
| Year 3 | $3,170 | $9,150 | −$20,850 |
| Year 5 | $3,410 | $15,840 | −$14,160 |
| Year 8 | $3,830 | $26,800 | −$3,200 |
| Year 10 | $4,120 | $34,920 | ~Breakeven |
| Year 15 | $4,920 | $57,700 | +$27,700 |
| Year 25 | $6,950 | $106,200 | +$76,200 |
Assumes $30,000 installed cost (no federal ITC — expired Dec 2025), 3.5%/year rate escalation, 0.4%/year panel degradation, SREC income, and property tax savings included. Illustrative — actual results depend on utility, usage, and system performance.
Philadelphia vs. Pittsburgh: Does Location Change the Math?
Pennsylvania’s two major metros have meaningfully different solar economics. Here’s the comparison:
| Factor | Philadelphia (PECO) | Pittsburgh (Duquesne Light) |
|---|---|---|
| Peak sun hours/day | 4.2–4.4 | 4.0–4.2 |
| Electricity rate | $0.15–$0.17/kWh | $0.16–$0.18/kWh |
| Avg. property tax rate | 1.89% (Philadelphia) | 1.50% (Allegheny County) |
| Net metering | PECO — retail credit, monthly rollover | Duquesne Light — retail credit, monthly rollover |
| Installer competition | High (large market, many installers) | Moderate (growing market, fewer installers) |
| Typical payback (10kW) | 11–13 years | 10–12 years |
Pittsburgh has slightly higher electricity rates but lower sun exposure. Philadelphia has more installer competition (lower prices) but higher property taxes. The net effect is similar — both markets work for solar.
Rural Pennsylvania homeowners in FirstEnergy territory (Penelec, Met-Ed, West Penn Power) often have high electricity bills ($200–$350/month) due to less efficient grid infrastructure and larger homes. While sun exposure is slightly lower than the metros, the high usage and above-average rates mean solar ROI can actually be stronger in rural PA than in suburban Philly or Pittsburgh.
Financing Options for Pennsylvania Homeowners
Without the federal ITC reducing your effective cost, financing terms become even more important. Here are the main paths available in Pennsylvania:
Solar Loan
The most common approach. You own the system from day one and keep all PA incentives (SRECs, property tax exemption, net metering credits). Rates typically run 4.99%–8.99% APR depending on credit score and term. At 6.99% APR over 15 years on a $30,000 system, monthly payments run about $270 — often less than the electricity bill savings, which means positive cash flow from month one. Several national lenders (Sunlight Financial, Mosaic, GreenSky) operate in Pennsylvania.
Home Equity Loan or HELOC
If you have equity in your Pennsylvania home, borrowing against it typically offers the lowest effective interest rates (5–7% in current conditions) and potential interest deductibility on your federal return. Pennsylvania home values have risen meaningfully since 2020 in both the Philly and Pittsburgh metros — many homeowners have untapped equity. Your home is the collateral — weigh that risk against the certainty of rising utility bills.
PACE Financing
Pennsylvania has an active PACE (Property Assessed Clean Energy) market. PACE financing is repaid through a property tax assessment rather than a traditional loan — no credit score cutoff, but the lien attaches to the property and must be disclosed in any sale. PACE can be a good option for homeowners who don’t qualify for traditional financing.
Solar Lease or PPA
Zero upfront cost, fixed monthly payment. You don’t own the panels, so you don’t receive SREC income — the aggregator or leasing company captures it. Long-term returns are significantly smaller than ownership, but for homeowners who can’t qualify for loans or prefer predictable monthly costs, a lease or PPA is a real option in Pennsylvania.
When Solar May Not Be Right in PA
Solar works well for most Pennsylvania homeowners, but not everyone:
- Significant tree shading or north-facing roof: PA’s moderate sun means every lost kilowatt matters. A roof with 30%+ shading year-round is not a good candidate — microinverters mitigate but don’t eliminate shading losses.
- Roof at or near end of life: If you need a roof replacement in the next 5 years, do both projects simultaneously. Removing and reinstalling panels for a roof replacement costs $3,000–$6,000 — an avoidable expense if coordinated from the start.
- Planning to move in 3–5 years: Solar adds home value in Pennsylvania — but a 3-year holding period unlikely fully recoups a $30,000 investment. If you’re relocating, factor in the expected sale timeline.
- Very low electricity usage: If your monthly bill is below $80/month, the system needed for meaningful savings is small and payback periods extend accordingly.
Not sure? Our solar decision tool asks 8 questions and gives you a direct go / no-go based on your actual situation — no sales calls.
FAQ
What solar incentives are available in Pennsylvania in 2026?
PA homeowners have four key incentives: (1) SREC income — earn $30–$45 per SREC, roughly $300–$585/year for typical systems, sold through aggregators; (2) Property tax exemption — solar equipment adds no property tax in any of PA’s 67 counties, saving $150–$300/year; (3) Sales tax exemption — no 6% PA sales tax on solar equipment or installation, saving $900–$2,100 upfront; (4) Net metering — PECO, Duquesne Light, Penn Power, FirstEnergy, and PPL all offer retail-rate credits for excess solar production. The federal 30% ITC expired December 31, 2025 and is not available for 2026 installations. Calculate your specific PA savings here.
What happened to the federal solar tax credit in 2026?
The 30% federal residential ITC expired December 31, 2025. There is no federal solar tax credit for 2026 installations. This is a real change — on a $30,000 system, the $9,000 credit that used to be available is gone. However, Pennsylvania’s SREC program ($300–$585/year in direct income), property tax exemption, and sales tax exemption still deliver meaningful financial benefits. Solar ROI in PA in 2026 requires evaluating on current incentives rather than historical benchmarks. Run your numbers with current incentives here.
How does the PA SREC program work and how much can I earn?
SRECs are earned at 1 SREC per 1,000 kWh of solar production. A typical 10kW PA system produces 12,000–14,000 kWh/year, earning 12–14 SRECs annually. In 2026, PA SREC prices run $30–$45 per credit. Your installer will typically connect you with an SREC aggregator who handles the sale and monthly/quarterly payments. Over a 25-year system life, SREC income totals $9,000–$15,750 — a meaningful lifetime benefit that partially offsets the loss of the federal ITC. Project conservative ($30–$35/SREC) rather than optimistic numbers when planning your ROI.
Does Pennsylvania have net metering? Which utilities offer it?
Yes — Pennsylvania Act 213 requires investor-owned utilities to offer net metering. Major utilities include PECO (Philadelphia), Duquesne Light (Pittsburgh), Penn Power (Western PA), FirstEnergy utilities (Penelec, Met-Ed, West Penn Power), and PPL Electric Utilities (eastern/central PA). All credit excess solar production at the retail electricity rate. Rollover policies and annual caps vary — confirm your specific utility’s current terms before sizing your system. Get a personalized system size recommendation here.
Is solar worth it in Pennsylvania in 2026 without the federal tax credit?
Yes — for most PA homeowners, solar is still worth it in 2026. SREC income ($300–$585/year), rising electricity rates ($0.15–$0.18/kWh, above the national average), PA’s property and sales tax exemptions, and net metering credits collectively deliver 25-year net gains of $30,000–$50,000 for typical systems. The strongest candidates: homes paying $175–$250/month for electricity in PECO, Duquesne Light, Penn Power, or FirstEnergy territory. Rural PA homeowners with even higher bills are often among the best candidates in the state.