Solar incentives in Pennsylvania for a smooth solar switch

Updated: Mar 13, 2025
7 min

Julia ZaraevaAuthor

Pennsylvania may be cloudy but high electricity costs make solar panels a profitable investment in this state. To make your purchase easier and increase savings, take advantage of solar incentives in Pennsylvania.

Key takeaways

Pennsylvania may be cloudy but with several Pennsylvania and Philadelphia solar rebate programs homeowners can make their residential solar energy system a profitable investment in this state. Find solar incentives you’re eligible for and how to qualify in this guide.
Pennsylvania residents can claim a 30% federal tax credit on the total cost of their solar system installation.
Pennsylvania offers loan programs, primarily for businesses, nonprofits, and municipalities, through the Sustainable Energy Fund. Loan amounts range from $5,000 to $1,000,000, with terms and interest rates varying.
Net metering allows homeowners to sell excess solar energy back to the grid for credits.
Credits are valued at the full retail kilowatt-hour rate. Remaining net excess generation (NEG) is compensated at the utility's "price-to-compare" at year-end.
SRECs/AECs are earned for generating clean energy, regardless of selling electricity. SRECs/AECs can be traded on the PJM-EIS Generation Attributes Tracking System (GATS) platform. SREC prices fluctuate, typically ranging from $20-$60. AEC lifetime is 3 years. System registration on the PJM EIS platform is required.

Save 30% of your PV system cost with Federal Solar Tax Credit

The US government wants more people to go solar: it’s a modern and green way of getting energy. This is why the Solar Investment Tax Credit (ITC) program was developed. It allows American citizens to claim 30% of the cost of their installation as an income tax deduction. The cost here is not only solar panels, but also shipping, installation expenses and more. For example, if your system overall made you spend $10,000, the government returns you $3,000. To claim the ITC, complete all the necessary forms and submit them when filing your taxes.

Finance your solar project with help of Pennsylvania loan programs

In Pennsylvania, you can get additional financing for your solar project with different programs. They are designed primarily to help businesses switch to renewable energy.

One of the examples is the Sustainable Energy Fund. Solar loans are issued for businesses, nonprofits and municipalities. The size of a loan may vary from $5,000 to $1,000,000: the length of a loan and interest rates depend on the project and its scale. You can calculate the loan and interest on the SEF website.

Join Net Metering program to cover your electric bills

Net Metering is the main way in which a solar system pays for itself in the US. The idea is always the same: you sell your excess solar energy into the commercial grid, gain credits and use them to cover your next electric bill.

The electricity that you send to the grid is credited to your next bill at the full retail kilowatt-hour rate, which includes generation, transmission, and distribution charges. All the remaining NEG are compensated at the utility's "price-to-compare" at the end of the year. The customer gets to keep the RECs that his system produces. Contact your utility for exact rates and net metering conditions.

Save additional $200-400 a year trading SRECs

For generating clean electricity any person can get Solar Renewable Energy Certificates (SRECs). Unlike with Net Metering, you don’t need to sell any electricity to get credits – the certificates are simply given to you. One SREC is granted for 1 Megawatt-hour of power. A 5kW system can generate over 7 Megawatt-hour over the year, so in theory it’s possible to get 5-7 SRECs in 12 months if you would send all your energy into the grid.

In Pennsylvania SRECs or alternative energy credits (AECs) can be traded using the PJM-EIS Generation Attributes Tracking System (GATS) platform. The price of a SREC in Pennsylvania floats around $20-$60. It may increase in the future so it makes sense to store credits for later. The lifetime of an AEC is 3 years. To participate, register your system at PJM EIS platform.

Incentive/ Program	Description	Benefits	Eligibility/ Requirements	Notes
Federal ITC (30%)	30% tax credit on the total cost of solar system installation.	Reduces overall system cost, accelerates payback period.	Must own the system, meet IRS guidelines.	Applies to installation, equipment, and other associated costs.
Loan Programs (Sustainable Energy Fund)	Loans for businesses, nonprofits, and municipalities for solar projects.	Provides accessible financing.	Businesses, nonprofits, municipalities.	Loan amounts $5,000-$1,000,000; terms and rates vary.
PA Net Metering	Allows homeowners to sell excess solar energy back to the grid for credits.	Reduces or eliminates electricity bills.	Customers of participating utility companies.	Credits at full retail rate, remaining NEG at "price-to-compare."
SRECs/AECs	Solar/Alternative Renewable Energy Certificates earned for generating clean energy.	Provides additional income through the sale of certificates.	System registration on PJM EIS platform.	Traded on PJM-GATS, prices fluctuate, 3-year lifetime.

What are solar incentives, and why do they exist?

Governments want everyone to use cleaner energy, like the kind you get from the sun. They know that putting solar panels on your roof can be expensive, so they offer special deals to make it easier. These deals are called solar incentives. They're like discounts or money back offers that help you pay for your solar system. They may come in different forms – incentives, rebates, energy efficiency loan programs.

One way they help is through tax credits. Think of it as getting a break on your taxes. When you do your taxes, you can take off a certain amount of money, which means you owe less. Sometimes, if the energy credit is bigger than what you owe, you might even get money back. Another way is through rebates. This is like getting a refund after you buy and install your solar panels. You might get a check in the mail, or they might just take the money off the price of the system when you buy it.

There's also something called a feed-in tariff. This is a bit different. When your solar panels make more electricity than you use, you can sell that extra electricity back to the power company. They pay you for it. This means you can earn money by making clean energy, which helps pay for your solar system even faster.

Governments offer all this help because they know using solar energy is good for everyone. It helps make the air cleaner, which is better for our health and the planet. It also helps create jobs for people who work in the solar industry, which is good for the economy.

For you, if you put solar panels on your home or business, these incentives mean you can save a lot of money over time. You get help paying for the system itself, and you also save money on your electricity bills every month. And, with feed-in tariffs, you might even make some extra money. Basically, solar incentives make it cheaper and easier to switch to solar. They help you save money while also helping the planet. It's a win-win situation.

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Julia Zaraeva

Author

Years of experience in translation and a love of nature help Julia find the right words to encourage going solar. She joined the team in 2023 and is happy to make her contribution to a greener future.

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