Pennsylvania solar rebates and incentives: 2024 guide

Solar panel systems in Pennsylvania are expensive, but incentives from the state and federal governments can help you reduce the upfront cost. Between the federal tax credit and other state-specific incentives, you can save thousands on solar panels, making them well worth the investment. Here's how you can lower the cost of solar if you live in Pennsylvania.

As a Pennsylvania homeowner, you have access to some great incentives that can substantially improve your return on investing in solar panels. The solar tax credit and the state’s SREC program are some of the most impactful ways to bring down your solar costs.

Residential Clean Energy Credit

The Residential Clean Energy Credit, formerly known as the federal investment tax credit (ITC), can reduce your solar panel system's cost by 30%. Your entire system qualifies for this incentive, including equipment, labor, permitting, and sales tax. 

When you file your federal income taxes, you can claim this incentive as a credit towards your federal tax bill. Just keep in mind that to qualify for the ITC, you need to purchase your system either with cash or a solar loan–if you lease your system, you won't be eligible. 

You also need a high enough tax bill, though you can roll over any remaining credit year-to-year until the end of 2034 when the ITC expires. The only time you might be eligible for a direct payment for the ITC is if you're a tax-exempt entity, like a nonprofit organization.

Solar Alternative Energy Credits

The Alternative Energy Credit Program is Pennsylvania’s solar renewable energy credit (SREC) program. Under the state's alternative energy portfolio standards (AEPS), utilities are required to generate a certain amount of solar energy. As a solar owner, you can earn one SREC for each megawatt-hour (MWh) of clean electricity your panels produce. Then, you can sell the SREC to utilities to count towards their renewable generation.

SREC prices vary based on market conditions, but you can expect to earn $30-$40 per SREC. To start selling SRECs, apply through the PennAEPS website and register an account with PJM-GATS to report your generation data. From there, an aggregator or broker will handle the purchase and sale of your SRECs with the utility.  

High Performance Building Program (HPB) 

Pennsylvania’s High Performance Building Program (HPB) provides loans and grants to businesses and individuals for the construction or renovation of “high-performance building projects”. HPB grants amount to 10% of the total eligible building construction or renovation costs (or $500,000, whichever is lower, but residential solar projects won’t cost nearly that much). An individual primary residence project may qualify for a loan of up to $100,000 with a fixed interest rate. 

Eligible projects must meet or exceed the National Green Building Standards (NGBS), Green Building Initiative (GBI) Green Globes Standards, or the United States Green Building Council (USGBC) LEED Gold Standards.

If you connect your solar panel system to the grid, you can benefit from net metering, one of the best solar panel incentives available in Pennsylvania. With net metering, you earn credits when you send excess electricity from your solar panels to the grid. When the sun isn't shining and you need to pull electricity from the grid, your utility will apply the credits to your bill. Net metering makes it so you will owe very little, or even nothing, on your electric bills with solar panels. 

Under Pennsylvania’s net metering program, you’ll earn credits at the retail rate of electricity for each kWh of electricity your system produces up to 100% of your annual utility electricity demand. If you send more electricity to the grid than you demand over the course of a year, you’ll be credited based on the “price-to-compare,” which represents the generation and transmission components of the utility’s retail rate but does not account for distribution. 

Learn more about these net metering programs:

Pennsylvania doesn't offer any state-specific battery incentives. However, all batteries above 3 kWh in size are eligible for the 30% federal tax credit. In Pennsylvania, batteries can also boost energy independence and provide backup power during an outage.

If you're looking for solar installers in Pennsylvania, here are some popular suggestions: