Pennsylvania Solar Energy Incentives and Rebates 2022

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    If you’re a Pennsylvania homeowner thinking of installing solar panels in 2021, the biggest question on your mind is probably: “How much will this cost?”

    Fortunately, the multitude of financial incentives available in the Keystone State means that the effective cost of going solar is far lower than what you’ll pay upfront.

    As of 2020, Pennsylvania residents pay an average of 10.13 cents per kWh, easily in the top half of prices for continental U.S. states. The state’s power usage doesn’t just result in financial cost. Due to the burning of fossil fuels to meet power needs, Pennsylvania is ranked #4 in total carbon dioxide emissions, producing 218.6 million metric tons of carbon dioxide emissions in the year 2016 alone.

    Considering the heavy environmental burden and the ever-increasing costs Pennsylvanians are paying on their electric bills, this is a great time to make the switch to clean solar power. Read on to learn about money-saving incentives that Pennsylvania state offers its residents!

    Renewable Portfolio Standard (RPS)

    Renewable Portfolio Standard (RPS) is a law that requires a certain amount of electricity to be generated by renewable sources- the percentage of which is up to the individual state. Not complying with this standard results in hefty fines for the state. Pennsylvania’s goal is to achieve 18% clean energy by the year 2020.

    For Pennsylvania, there are two tiers within this RPS. Eight percent of the state’s power is to be generated from Tier 1 sources, which are clean and environmentally friendly ones, such as solar power and wind technology. Of that 8%, about .5% should come from solar. Unfortunately, this is a small percentage, considering that 10% of the state’s power is mandated to come from Tier 2 producers such as coal and large-scale hydropower, which are less clean, potentially causing environmental damage.

    The Keystone State still has a way to go until achieving fully renewable energy, but as a home or business owner, this is a great time to cash in on the incentives that are only available for a short while longer!

    Federal Solar Investment Tax Credit

    The first major program that you should know about is the solar investment tax credit (ITC). The ITC is a federal program available to everyone in the U.S. and allows you to take a 26 percent tax credit on the cost of your solar system. A tax credit is a dollar-for-dollar reduction in your total income tax liability. The ITC functions as a 26 percent discount on your solar system. If your system costs $20,000, for instance, you could take advantage of the ITC to claim a $6,000 credit on your taxes.

    If you want to avail yourself of the ITC (and you should!), 2021 is the year to do it. The tax credit will decline to 22 percent after 2022 and phase out completely after 2023.

    Solar Rebates in Pennsylvania

    Net Metering

    At the state level, Pennsylvania has several financial incentives available in 2021. Like most states, Pennsylvania has a net metering program. Net metering is an arrangement in which your local electric utility purchases excess energy produced by your solar system. The energy you don’t need to power your home is shunted back into the grid and distributed to other homes and businesses, essentially turning your home into a miniature electricity generation station. For instance, if you consume $50 worth of energy but produce $40 worth of energy in a given month, you’ll only owe the utility $10. If the amount of energy you produce exceeds the amount of energy you consume, you’ll receive a credit on your bill that will roll over to the next month.

    Your installer should be able to help you set up a net metering arrangement as you move forward with your installation process. Net metering will require your utility to install a bi-directional meter, allowing you to monitor both the amount of energy you consume from the grid and the amount of energy you contribute.

    Solar Renewable Energy Credit (SREC)

    The third major financial incentive program available in Pennsylvania is the solar renewable energy credit (SREC) scheme, sometimes referred to as solar power performance payments or production incentives. For each megawatt-hour of energy you produce, you earn an SREC. You can then sell these SRECs to your electricity distribution company (your electric utility, which owns the grid, pipes, and other infrastructure that brings energy to your home) or electricity generation supplier (the company that produces the energy).

    SREC prices in Pennsylvania have long been based on SREC values across a shared market known as the PJM region that, in addition to Pennsylvania, encompasses Ohio, New Jersey, Maryland, Delaware, West Virginia, and parts of seven other states. As a result, the market is saturated with SRECs, and their relative value has declined from $300 per megawatt-hour 2010 to around $21 per megawatt-hour today. This year, Pennsylvania lawmakers sought to correct this issue by forbidding out-of-state SREC sellers from selling SRECs in Pennsylvania. But the state’s low renewable energy targets (known formally as alternative energy portfolio standards, or AEPS), which determine how many SRECs utilities are required to purchase, remains as a barrier to SREC price increases. You can find the most up-to-date credit market prices at

    City and County Level Incentives

    In addition to financial incentives at the state and federal levels, other incentives may be available at the city and county level. The nature of these incentives and your eligibility for them varies considerably. The Solarize Philly program in Philadelphia, for instance, helps low- and moderate-income households go solar by connecting them with reputable installers, negotiating contracts, and providing financing. The Solarize Greater Media initiative offers similar services for groups of residents living in and around Media, Pennsylvania. Your installer will be able to apprise you of local financial incentives available in your area, or you could contact your local energy or housing authority to find out more.


    On the whole, Pennsylvania’s solar incentives have proven effective. The state boasts some 21,490 installations, and 2021 will surely see that number rise. If you are interested in going solar in 2021, contact your local installer to find out whether your home is a good candidate for solar panels.


    How much does it cost to install solar panels in Pennsylvania?

    As of 2019, the average cost for solar power in Pennsylvania is $3.13/W. An average-sized solar system is 5 kilowatts (kW), which means the cost could range from $13,302 to $17,998. Cashing in on the Federal Investment Tax Credit (ITC) and other incentives could save you thousands of dollars on this estimate!

    Do solar panels increase home values in PA?

    Solar panels do tend to increase a home’s value, but only if you own the panels. Leased panels are rented from a third-party owner, so they wouldn’t be considered in a property’s assessment.

    According to an eleven-year study of eight states, including Pennsylvania, buyers are consistently willing to pay more for a home with solar power. Your investment in solar energy is an investment for a greener earth and savings on electric bills- and it can also increase your home’s property value!

    Will solar panels increase my PA property taxes?

    Unfortunately, Pennsylvania does not provide a property tax exemption for solar power systems. Your home’s increased value could lead to an effective annual tax rate of 1-2% of your property’s increased value.

    Pennsylvania has some strides to make to help encourage residents to go solar, but it can still be a worthwhile investment in the long run. You can still become less dependent on ever-increasing electricity prices, and benefit from the limited-time incentives detailed above!