Key Points
- Pennsylvania ranks 7th for the least amount of sunlight in the country, but homeowners can still save thousands of dollars by switching to solar panels in the state.
- Pennsylvanians can take advantage of net metering, which allows them to receive a credit each month for excess solar energy and receive a check for any leftover credits at the end of the year.
- Selling solar renewable energy credits (SRECs) to utility companies can earn homeowners about $360 a year for a 6kW system.
Pennsylvania ranks 7th for the least amount of sunlight in the country. Still, this has not stopped the Keystone State from supporting solar energy. Homeowners can take advantage of programs such as rebates and net metering to save money on equipment. This can result in thousands of dollars returned for switching to solar panels in Pennsylvania.
With so many programs available, you may not know where to start looking. In this article, we break down every available incentive, from federal to municipal. Let’s get started.
How to Save Money on Solar Panels in Pennsylvania: Overview
While Pennsylvanians receive some of the lowest sunlight in the country, they benefit from affordable solar panel prices and high traditional electricity rates. Those purchasing an array could save as much as $21,000 on power over 25 years.
And this only marks the base savings for homeowners in Pennsylvania. The Keystone State offers decent incentives that are backed by a modest set of renewable standards. These help homeowners save money on an installation, and some can even earn a paycheck.
Support for solar panels in Pennsylvania comes in many forms. From net metering to performance programs, homeowners have methods for saving money. Let’s take a closer look at how it’s done.
Solar Panels in Pennsylvania: Federal Incentive
You might want to get right into state-sponsored benefits, but the largest savings come from the federal solar tax credit. The United States government offers a 30% return on income taxes for all installation costs. This includes equipment and storage, labor, and even sales tax.
However, you must meet a few requirements to qualify for this massive return. First, it’s necessary that you own your solar array, either through a loan or purchasing outright. Additionally, you must live at the home where the system is installed, and all equipment must be new.
Pennsylvanians that install a 6kW system can save as much as $4,500 on installation costs, but they should not sit on this incentive. The program tapers off, dropping to 26% in 2033. It continues to decrease until 2035, when it terminates.
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Pennsylvania’s State Credits and Rebates
Many states provide financial incentives in the form of tax credits and rebates. While Pennsylvania is not one of those states, homeowners in Philadelphia can earn a paycheck for installing solar panels.
The program, which launched in 2019, offers a rebate of $200 per kilowatt installed. This means that you could earn back $1,200 for a 6kW system in this city. However, the program is currently on hold as Pennsylvania recovers from the COVID-19 Pandemic. For now, you can join a waitlist in case funding returns.
Fortunately, all Pennsylvanians can take advantage of the state’s net metering policy. This is a mandate that requires utility companies to purchase excess solar energy from residents. Net metering for solar panels in Pennsylvania is as good as it gets; homeowners receive a credit each month for all excess energy at the full retail rate. And at the end of the year, any leftover credits are paid to the customer in the form of a check.
Alongside net metering, Pennsylvanians can save money by selling their solar renewable energy credits (SRECs) to their utility companies. They use these credits to show that they’re meeting regulations, helping them avoid fees.
Homeowners receive an SREC for each MW of solar energy produced in a year. A 6kW system can produce 8 SRECs each year. When residents sell these to their utility company (the going rate is about $45 each), they can earn about $360 a year.
Solar Panels in Pennsylvania: Government Regulations
Pennsylvania has pretty decent incentives, and they stem from the state’s modest renewable portfolio standard (RPS). We use the RPS to determine a state’s intention to invest in solar renewable energy. The better it is, the more likely homeowners will benefit from financial incentives now and in the near future.
The Keystone State has a goal for 18% renewable production by 2021. The requirements aren’t as aggressive as in some states, but it’s a start. However, the RPS expired a couple of years ago, meaning we can’t expect utilities to support continued progress.
Should Pennsylvanians Lease Solar?
Some states offer solar leasing as a method for those unable to afford an installation. While the returns are modest and there’s no benefit from incentives, it still helps reduce the cost of electricity while improving carbon footprints.
Fortunately, you can lease solar panels in Pennsylvania if you don’t have the funds to own them. However, the utility returns hardly offset the loan payments, making this option negligible in the Keystone State. Therefore, it’s wise to lease solar here only if you have a desire to save the environment.
Solar Panels in Pennsylvania: Incentive Summary
| Incentive | Access |
|---|---|
| Federal Tax Incentive | 30% return |
| Pennsylvania Tax Credits / Rebates | None / none |
| Net Metering | Monthly credit at the retail rate, full payment for excess credits at the end of the year |
| Renewable Portfolio Standard | 18% by 2021 (expired) 0.5% solar carve-out by 2021 (expired) |
| Property Tax Exemption | None |
| Sales Tax Exemption | None |
| Performance Payment Program | SRECs at an average rate of $45 each |
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