Every kilowatt-hour your system sends to the grid earns a credit at the full retail rate — the same rate you’d pay to buy that electricity back. Credits roll over month to month and settle annually on May 31. This is the largest source of ongoing solar savings in Pennsylvania, worth $1,400–$2,400 per year for a typical system.

PPL territory warning: PPL Electric has proposed replacing 1-to-1 retail credits with lower hourly wholesale rates, potentially effective July 2026. If approved, this significantly reduces solar savings for Lehigh Valley, Harrisburg, and Scranton homeowners. Systems installed before the change may be grandfathered — another reason PPL customers may want to move sooner rather than later. If your bill went up right after going solar, see our guide on why your bill looks higher after solar for the most common causes.

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

You must own your solar system to earn SRECs — lease and PPA holders are not eligible, the solar company keeps them. Credits are bankable for the year generated plus the following two years. Most homeowners use an SREC aggregator or broker who handles the sale automatically and sends a 1099 at year end. SREC income is taxable.

See the current PA SREC price and how to sell them for a full breakdown, updated monthly.

While the residential solar panel credit expired at the end of 2025, home battery storage systems still qualify for the 30% federal Residential Clean Energy Credit in 2026 — as long as the battery is charged primarily by solar (at least 70% from solar sources). Batteries installed alongside new solar automatically qualify. Standalone batteries added to an existing solar system also qualify.

On a $15,000 Powerwall 3 installation, that’s $4,500 directly off your federal tax bill — not a deduction, but a dollar-for-dollar credit. This is one of the strongest remaining federal incentives for Pennsylvania homeowners in 2026. A Pennsylvania solar consultant can confirm your eligibility during the site assessment.

Solar leases and Power Purchase Agreements are structured as commercial transactions. The solar company that owns your system can still claim the commercial Investment Tax Credit (Section 48E) in 2026 — and typically passes those savings through as lower monthly rates. This is why leases and PPAs have become more competitive relative to cash purchases in 2026 than they were before the residential credit expired.

You don’t receive this credit directly — the solar company does. The trade-off: you don’t own the system, and you don’t earn SRECs (the company keeps those). Net metering credits still come to you. See our Buy vs. Lease vs. PPA guide for the full 2026 comparison.

The 30% federal Residential Clean Energy Credit for purchased and financed solar panel systems expired December 31, 2025. Pennsylvania homeowners who completed a solar installation in 2025 can still claim the credit on their 2025 federal tax return (filed in 2026). For new 2026 solar panel installations financed with cash or a loan, no federal tax credit is available.

Without the credit, payback periods are longer — typically 10–13 years for cash purchases in Pennsylvania, compared to 7–9 years before expiry. The long-term savings case remains solid because PA net metering and SREC income are unaffected, and utility rates continue to rise. See the full 2026 impact in our Pennsylvania Solar Guide.

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

Pennsylvania utilities also offer energy efficiency rebates under Act 129 for qualifying appliances and HVAC upgrades that can be combined with solar. PPL, PECO, Duquesne Light, and FirstEnergy each run their own programs — check directly with your utility for current availability and eligibility.