Going solar in Pennsylvania

Solar Guide · The Keystone State

The Complete Pennsylvania
Solar Guide 2026

Everything Pennsylvania homeowners need to know about going solar in 2026 — real costs, available incentives, how each utility compares, and what changed when the federal tax credit expired.

Updated April 2026 Pennsylvania-specific 15 min read
$0.178
avg. PA electricity rate/kWh
(up 29% since 2021)
$2.95–3.15
installed cost per watt
in PA (2026)
$26–40
per SREC earned
(current PA market)
10–13 yrs
typical payback period
without federal tax credit
01

Is solar worth it in Pennsylvania in 2026?

The short answer is yes — but the financial picture changed significantly at the end of 2025. The federal residential solar tax credit (Section 25D) expired on December 31, 2025 under the One Big Beautiful Bill Act. Pennsylvania homeowners who purchase solar with cash or a loan in 2026 no longer qualify for a direct federal tax credit.

That’s a meaningful change. But the state’s core incentives — 1-to-1 net metering and the SREC program — remain in place and still make solar a strong long-term investment for most Pennsylvania homeowners. Electricity rates in Pennsylvania have climbed nearly 29% since 2021, reaching an average of $0.178/kWh in 2024. Every kilowatt-hour your panels produce is one you don’t have to buy from your utility at that growing rate.

The math has simply shifted. Without the federal credit, payback periods are longer — roughly 10–13 years for a cash purchase compared to the 7–9 years many homeowners expected before. But over 25 years, a typical PA homeowner can still save $50,000–$66,000 in electricity costs with a properly sized owned system.

The lease/PPA landscape changed too

Here’s an important nuance: solar leases and Power Purchase Agreements (PPAs) are structured as commercial transactions. The third-party company that owns the system can still claim the commercial Investment Tax Credit (Section 48E) and pass those savings through as lower monthly rates. This means in 2026, a lease or PPA has actually become more competitive relative to a cash purchase than it was in previous years — because the homeowner ownership advantage (the personal tax credit) no longer exists.

Our full Buy vs. Lease vs. PPA guide covers the trade-offs in detail.

02

Pennsylvania solar incentives in 2026

Pennsylvania doesn’t have a simple statewide solar rebate or state tax credit. Instead, the financial case for PA solar rests on three pillars: net metering, SRECs, and rising utility rates. Here’s what each one means for your bottom line.

1-to-1 Net Metering

Active — all PA utilities

Every kilowatt-hour your system sends to the grid earns you a credit at the full retail rate — the same rate you’d pay to buy that electricity. Credits roll over month to month. At the annual true-up on May 31, any remaining balance is paid at the lower “price-to-compare” rate.

Net metering is mandated by the PA PUC for all investor-owned utilities under Title 52, Chapter 75. It is the single largest source of ongoing solar savings in Pennsylvania.

Credit rate
$0.17–$0.21/kWh (varies by utility)
True-up date
May 31 annually
Max system size
50 kW residential
Typical annual savings
$1,400–$2,400/year

Solar Renewable Energy Credits (SRECs)

Active — ownership required

For every 1,000 kWh (1 MWh) your system generates, you earn one SREC — also called a Solar Alternative Energy Credit (SAEC) in PA. These credits can be sold on the open market to electric utilities that are required by law (under the Alternative Energy Portfolio Standards Act) to source a portion of their power from solar.

You must own your system to earn SRECs — lease or PPA holders are not eligible. Credits are tracked through the PJM-GATS system. Your installer typically handles registration; many homeowners work with an SREC broker to sell them.

Current market price
$25–$40 per SREC (2026)
Typical annual credits
9–13 SRECs/year (avg. system)
Annual SREC income
~$250–$520/year
Credit eligibility
Generated year + 2 following years

Federal 30% Residential Tax Credit (Section 25D)

Expired Dec 31, 2025

The 30% federal Residential Clean Energy Credit expired for purchased and financed solar systems at the end of 2025. Pennsylvania homeowners who install solar with cash or a solar loan in 2026 do not qualify for any federal tax credit on their purchase.

The exception: standalone home batteries (charged by solar) still qualify for the residential credit through 2026 in some circumstances. And solar installed via a lease or PPA still benefits indirectly because the commercial tax credit (48E) can be claimed by the third-party owner.

If you installed solar in 2025, you can still claim the credit on your 2025 tax return filed in 2026.

Penn Energy Savers & Utility Rebates

Pending / varies by utility

Pennsylvania’s Penn Energy Savers program (funded through IRA HEAR funding) is expected to offer rebates of up to $8,000 for income-qualified households for energy efficiency upgrades including electrical panel work — relevant for many solar installations that require a panel upgrade. As of April 2026, the program is not yet operational but administrators have been selected.

All major PA utilities also offer energy efficiency rebates under Act 129 for appliances and HVAC upgrades that can be combined with solar to further reduce your overall energy costs.

03

What does solar cost in Pennsylvania?

Solar prices have fallen roughly 40% over the past decade, and PA costs are competitive with the rest of the Northeast. In 2026, without the federal tax credit, the out-of-pocket cost is higher than it’s been in recent years — but the per-watt installed price itself hasn’t changed much.

Pennsylvania’s 6% sales tax applies to solar installations

Unlike New Jersey and many other states, Pennsylvania does not exempt solar installations from sales tax. The 6% state sales tax is applied to your system cost, adding roughly $1,800–$2,400 to a typical installation. Pennsylvania also does not offer a property tax exemption for solar — your assessed home value and property taxes will increase modestly after installation. These two factors make PA’s out-of-pocket cost higher than neighboring states.

Pennsylvania solar savings estimator

Adjust to your situation — results update instantly

Monthly electric bill $165
$60$500
Region / utility
SE PA (PECO)
Central PA (PPL)
Pittsburgh (Duquesne)
Erie / NW PA
System size
11.2 kW
Est. system cost
$35,100
Annual savings
$2,110
Payback period
~12 yrs

These are estimates based on regional averages — your actual numbers will depend on your specific roof, usage, and installer pricing. The best way to get an accurate number is to have a qualified installer assess your home and provide a detailed proposal based on 12 months of your actual utility bills.

04

How solar economics vary across Pennsylvania

Pennsylvania stretches across nearly 300 miles east to west, and solar economics vary meaningfully by region. Southeast PA gets the most sun and the highest utility rates — a combination that produces the strongest solar ROI in the state. Erie and northwestern PA face the opposite conditions.

Region Utility Peak sun hrs/day Avg. rate (¢/kWh) Installed cost/W Solar outlook
Philadelphia & SE PA PECO 4.5–4.9 ~21¢ $2.95–$3.20 Excellent
Lancaster / York / Berks Met-Ed (FirstEnergy) 4.3–4.6 ~17¢ $2.70–$3.10 Very good
Allentown / Lehigh Valley PPL Electric 4.2–4.5 ~17¢ $2.95–$3.15 Good — watch PPL changes
Harrisburg / Scranton PPL Electric 4.0–4.3 ~17¢ $2.90–$3.10 Good — watch PPL changes
Pittsburgh metro Duquesne Light 3.8–4.2 ~18¢ $2.85–$3.10 Good
Westmoreland / SW PA West Penn (FirstEnergy) 3.8–4.1 ~17¢ $2.80–$3.05 Good
State College / Central Penelec (FirstEnergy) 3.9–4.2 ~17¢ $2.85–$3.05 Good
Erie & Northwest PA Penelec (FirstEnergy) 3.4–3.7 ~15¢ $2.80–$3.00 Marginal — low sun hours
Peak sun hours and utility rates are averages as of early 2026 and subject to change. PPL territory note: proposed tariff changes expected July 2026 may reduce the effective value of net metering credits for PPL customers. See our PA net metering guide for full details.
PPL territory homeowners: act before July 2026

PPL Electric Utilities has filed a rate settlement proposing to replace 1-to-1 retail net metering credits with hourly wholesale market rates — effective July 1, 2026. If approved, this would significantly reduce the financial value of solar for PPL customers in the Lehigh Valley, Harrisburg corridor, and Scranton areas. Systems installed and interconnected before the new rates take effect may be grandfathered. If you’re in PPL territory, now is the time to get a quote.

05

What does the PA solar process look like?

Going solar in Pennsylvania follows a fairly consistent process, but timelines vary by municipality and utility. Here’s what to expect from first contact to your system turning on.

1
Week 1–2

Site assessment and proposal

A qualified installer assesses your roof, shade exposure, and electrical panel. They review 12 months of utility bills and produce a detailed proposal with system size, equipment specifications, projected production, and savings estimates. Get at least three proposals before committing.

2
Week 2–4

Contract and permit application

After choosing your installer and reviewing the contract, you sign. Your installer immediately submits the permit application to your municipality and the interconnection application to your utility (PECO, PPL, Duquesne Light, or a FirstEnergy company).

3
Week 4–10

Permit approval and utility interconnection review

Municipal permits typically take 1–4 weeks. Utility interconnection reviews run 2–5 weeks depending on your utility: PECO 3–5 weeks, PPL and Duquesne 2–4 weeks, FirstEnergy companies 2–3 weeks. Your installer manages this process — you shouldn’t have to follow up with anyone.

4
1–2 days

Installation

Most residential installations take one to two days. Your installer mounts the racking, installs panels, runs wiring to the inverter, and connects to your electrical panel. You’ll want to be home for part of this so the installer can walk you through the system at completion.

5
Week 1–3 after install

Inspection and Permission to Operate

Your municipality inspects the installation. Once approved, your utility grants Permission to Operate (PTO) — the moment your system legally switches on and begins generating electricity and net metering credits. Total timeline from contract to PTO: typically 8–14 weeks in PA. After PTO, your installer (or you) registers the system with PJM-GATS to begin earning SRECs.

06

Pennsylvania solar — frequently asked questions

Does Pennsylvania solar still make sense without the federal tax credit?
Yes — but the numbers look different than they did pre-2026. Payback periods are now 10–13 years for cash purchases rather than 7–9 years. Over 25 years, a typical PA system still delivers $50,000–$66,000 in electricity savings. Net metering and SRECs remain active. The key is making sure your system is sized correctly for your actual usage and that you compare at least three installer quotes to avoid overpaying on the upfront cost.
Does PA have a property tax exemption for solar?
No — Pennsylvania does not offer a statewide property tax exemption for solar installations. When your solar system increases your home’s assessed value, that increase is subject to local property taxes. Estimates vary, but most homeowners in PA see an increase of $300–$500 per year in property taxes after a solar installation. Factor this into your payback calculation. (By comparison, New Jersey and many other states do exempt solar from property tax, making PA’s tax environment less favorable.)
Is there a sales tax exemption for solar in Pennsylvania?
No — Pennsylvania’s 6% sales tax applies to solar installations. On a $35,000 system, that adds approximately $2,100 in sales tax. This is one of the factors that makes PA solar more expensive than neighboring states. When comparing quotes, confirm that the price you’re seeing includes sales tax — some installers present pre-tax pricing and the tax shows up at contract signing.
Do solar panels increase home value in Pennsylvania?
Yes. Research consistently shows that owned solar systems increase home resale value — typically 3–4% above comparable homes without solar in Pennsylvania markets. A Zillow study found homes with solar sell for approximately 4.1% more. The caveat: leased solar systems can complicate sales, as the lease must transfer to the buyer. This is one reason why owning your system (cash or loan) is often preferred if you plan to sell within 10 years.
How does PA solar compare to New Jersey or Ohio?
New Jersey has stronger solar incentives — particularly through the SuSI/ADI SREC program which pays roughly $90/MWh for 15 years, plus sales tax and property tax exemptions. This makes NJ one of the best solar markets in the country. Ohio offers net metering but the incentive structure is less robust than PA; SRECs in Ohio trade at lower values. Pennsylvania sits in the middle — stronger than Ohio, weaker than NJ, with solid net metering and a decent SREC market being the main drivers.
Are SRECs taxable income in Pennsylvania?
Yes. SREC income is considered taxable income and should be reported when filing your federal and state income taxes. If you earn $300–$500 per year in SRECs, you’ll owe taxes on that amount at your marginal rate. Keep records of all SREC sales through your broker — they should provide a 1099 form. Consult a tax professional if you’re unsure how to report SREC income for your specific situation.
What happens to my SREC credits if I sell my home?
SRECs are tied to the solar system itself, not the owner. When you sell your home with solar panels, the new owner typically inherits the right to earn SRECs going forward — provided the system is transferred correctly in PJM-GATS. Any SRECs you’ve already earned and sold before closing are yours to keep. SRECs that have been earned but not yet sold at the time of closing can sometimes be transferred or sold before you move — discuss this with your SREC broker well in advance of your closing date.

Ready for a real quote for your Pennsylvania home?

Colin Dunham is a Solarity solar consultant serving homeowners across Pennsylvania. He’ll assess your specific utility territory, roof, and usage to give you an honest picture of what solar would cost and save — with numbers based on your actual situation, not regional averages.

CD
Colin Dunham Solar Consultant · Solarity · Serving all of PA
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