Solar incentives in Pennsylvania

The federal solar investment tax credit (ITC) is the best way to make a new solar system more budget-friendly for Pennsylvania homeowners. If you decide to install a residential solar panel system by the end of 2032, you can get a federal income tax credit for 30% of the total cost on your federal income taxes. That includes everything: equipment, labor and permits.

For example, let’s say you get a solar setup that costs $20,000 before incentives. By using the ITC, you can claim a $6,000 credit when you file your federal taxes, effectively bringing your out-of-pocket expenses to $14,000.

The federal solar investment tax credit drops to 26% in 2033 and 22% in 2034.

Don’t get confused — the solar tax credit is not a rebate or refund. You must claim it when you file federal taxes for the year that your solar panel system was installed. You have to complete Form 5695 to save some cash while embracing clean, green energy in the Keystone State.

» MUST-KNOW: The tax benefits of owning a home: must-know deductions and secrets

Residential solar incentives

Pennsylvania doesn’t offer solar tax breaks for homeowners, but it does have a loan program to help pay for your new solar panel system. It also offers rebates on permits and solar water heaters.

Solar rebates

If you live in Philadelphia, you get a permit fee break for your solar installation. You'll only pay $25 for every $1,000 of labor. To qualify, your system must be 10 kilowatts (kW) or less and installed on a one- or two-family residential unit.

Residents can also take advantage of solar water heater rebates from their electric company. Duquesne Light Company’s residential energy efficiency program helps customers save $300 on solar water heaters. If you're a customer, you just need to fill out a rebate form and submit it to the company for payment within 60 days.

Solar loan programs

The High-Performance Building Program helps residents secure up to $100,000 with a fixed-rate loan to assist with building or renovating homes that will include solar. To qualify, the home you’re putting solar panels on must be your primary residence and must meet several building requirements. There is a $100 nonrefundable application fee to apply.

What to know about net metering in Pennsylvania

Net metering lets people with solar panels get credit for extra electricity they generate. This helps lower overall utility costs. In Pennsylvania, all electric companies must offer net metering to solar customers. Systems under 50 kilowatts (kW) qualify, while larger ones over 50 kW can use virtual net metering.

How net metering works

When your solar panels make more power than you need, the extra goes back into the utility grid. This earns you credits on your bill based on how much unused power you produce. If your solar panels produce less power than you use that month, the net metering credits help cover what you owe the utility.

The average estimated 25-year net savings for going solar are $23,634 in Pennsylvania.

For example, Huntingdon homeowner Ted hasn’t paid an electric bill in more than a year thanks to net metering credits. “Penelec owed me money,” he said. “When I went and started generating this, they had to pay me back.”

At the end of each year, utilities in Pennsylvania pay solar customers for surplus credits above 1,000 kilowatt-hours (kWh) at the average annual avoided cost rate. Customers retain net metering benefits for 15 years after installation.

The Pennsylvania solar alternative energy credits program provides additional compensation for solar power generation — typically $30 to $47 per megawatt-hour (MWh).

» GREENEST STATES: Pennsylvania ranks No. 22

More incentives in Pennsylvania

Most of the solar incentives in Pennsylvania are for commercial use. The state and many cities offer loans, grants, building incentives and even industry recruitment perks for going solar in commercial, industrial and other sectors.

» MORE: Commercial solar panels

Solar resources in Pennsylvania

Below are some additional resources that can guide you through transitioning to solar in Pennsylvania.

• High-Performance Building Program (HPB)
• Pennsylvania Alternative Energy Credit Program 
• Philadelphia Solar Rebate Program
• Department of Environmental Protection Solar Energy Resource Hub
• Resources for homeowners considering solar energy
• Public Utility Commission solar energy fact sheet

» GUIDE: Solar panel installation guide

Find solar companies in Pennsylvania

Compare popular solar companies available in Pennsylvania below. Read our guide to finding the best solar companies for more.

Bottom line: How much are solar panels in Pennsylvania?

In Pennsylvania, after factoring in tax credits, the average cost of a solar system comes to approximately $15,173. Pennsylvania offers various incentives, including loan, grant and rebate programs, but most of them are for commercial and nonprofit use — not for residential solar customers.

One good thing about going solar in Pennsylvania is the net metering program. It lets residents earn compensation for excess energy production. This helps you rack up savings over the decades you own your solar system.

The ConsumerAffairs Research Team conducted an in-depth analysis to determine how much it costs to go solar in Pennsylvania and the average solar costs in other states.

Solar costs: Pennsylvania vs. nearby states