Updated March 2023
Pennsylvania gets about 4.4 peak sun hours during the summer and 2.8 peak sun hours during the winter. This is enough sunlight to generate energy and help you save money.
If you’re thinking about getting a solar energy system for your home in Pennsylvania, you’ve surely looked at the great costs of installation, but also at the tax incentives and rebates. The rebates and incentives can be complicated to navigate, but they’re your best shot at saving money on this investment.
We’re here to help you break it all down and make it easy to understand how incentives work, how they help you save money, and most importantly – how to make solar affordable for your home.
Will there be incentives in 2023 in Pennsylvania? Yes, the best incentives and tax rebates will be available in 2023, especially with the new Inflation Reduction Act signed. You’ll find details of each rebate and incentive below.
If you already did your research and you’re ready to install a system, you can get a quote here!
The top solar incentives and rebates in Pennsylvania are:
- The Inflation Reduction Act (IRA): amongst other benefits, homeowners with home solar systems could be eligible for the federal solar tax credit of up to 30%.
- The Solar Energy Loan Program: this incentive offers loans and grants to businesses and other organizations to start their solar systems.
- The Solar Alternative Energy Credits Program: a similar program to the previous one – apply after installing your solar system and you’ll get one Alternative/Renewable Energy Credit per every 1000 kWh of energy produced. You can then sell this on the market.
- There are also fixed rebates of up to $500 for users of Duquesne Light Company utilities and buyers of ENERGY STAR solar water heaters.
- Philadelphia Solar Rebate Program: essentially a cashback program, this option provides you with $0.20 for every watt of electricity your system produces (or $0.10 if you’re a business, not a resident).
- Lastly, there’s Solarize Philly: an initiative ensuring financing to low and moderate-income homes through leases and other creative financing solutions.
Inflation Reduction Act (IRA)
The IRA is a pretty big deal when it comes to renewable energy – it is the biggest federal legislation addressing climate change in history! The plan is to invest $391 billion of provisions to energy security, $128 billion of which goes to producers of renewable energy to fight negative climate change.
But what does this mean to you and how can you make use of it?
Well, the Act makes it easier for Pennsylvanians to afford energy efficient appliances and save money on utilities through the following measures:
- rebates ranging from 50 to 100% of the cost of heat pumps, water heaters, dryers, stoves, and similar appliances
- rebates for house repairs with the goal of making the home more energy-efficient
- tax credits for homes installing solar panels cover 30% of the costs (with no income limits)
- tax credits for communities that want to invest in solar projects to cover for 30% of the costs
Based on this Act, it’s estimated that more than 610 000 household in Pennsylvania will invest in solar energy panels!
Another important point of the Act is the help to rural communities – Pennsylvania’s electric cooperative farms will be eligible for direct-pay clean energy tax credits for the first time ever!
This incentive will be available all across the State, so it’s not area-specific. All homeowners, regardless of their income, will be able to apply for 30% tax credits for solar panel installation.
To put it simply – you get 30% of the cost of the installation of solar panels taken off the amount of taxes you have to pay at the end of the year.
To apply, you’ll have to wait for the IRS to release the form for this Act. Check this website every once in a while – this is where the IRS will post all updates regarding federal tax credit for installing solar panels.
In the meantime, just to know what to expect, take a look at a similar form from 2021.
Pennsylvania Solar Incentives
There are other solar incentives available as well. The incentives and programs we’ll cover in this section are the Solar Energy Loan Program, Solar Alternative Energy Credits, Duquesne Light Company – Residential Solar Water Heating Program, and others.
All of these incentives and programs require a certified solar installer, and you can find your best solar installers in PA on our website. Solar installers are well-acquainted with solar incentives and will often help guide you through the process of applying and getting approved!
Solar Energy Loan Program
This program comes in the form of a loan to help fund the use of solar energy in Pennsylvania. It’s administered by the DCED and the DEP.
Only businesses, organizations focused on economic development, and political subdivisions (municipalities, counties, and school districts) can apply. Unfortunately, homeowners can’t apply.
You can get a grant of up to $5 000 for every new job created within three years after the loan is approved. How much money do you get? Well, the term is that you invest $1 for every $1 that the program grant invests, or $1 for every $3 of the program loan (there’s a difference between a loan and a grant).
You can find more information, including application guidelines, here.
Solar Alternative Energy Credits
This financial incentive is also applicable across the entire state of Pennsylvania. Unlike the loan program, everyone can apply – businesses and homeowners, as well as local government, schools, etc.
It works really simply – after installing an alternative energy facility (solar panels in this case) you submit an application through this website. Every month, you enter data about energy generation.
For every 1000 kWh you generate, one Alternative Energy Credit is created for you.
Every once in a while, an official will conduct an inspection in your home or your business to confirm that the system itself is functional and that the reported electricity generation is factual.
You can sell your AECs afterwards.
Find more information about this program at the link provided above.
Duquesne Light Company – Residential Solar Water Heating Program
Another rebate program for Pennsylvania, this program only applies to residential users of Duquesne Light Co utility company.
This incentive is very straightforward – you get a fixed amount of $300 for the installation of any solar water heating system with a tank of a minimum capacity of 1.26 gallons per square foot of collector.
The program is available until May 31st, 2026 or until all funds are depleted.
Essentially, it’s a $300 discount for the purchase of a solar water heater if you’re a Duquesne Light Co customer. Apply and learn more here.
ENERGY STAR Solar Water Heater Rebate
This rebate is very similar to our previous entry. All Pennsylvanians that buy an ENERGY STAR solar water heater by May 31st, 2026, to replace their existing electric water heater (not a gas water heater) can apply.
In exchange, you get a fixed $500 cheque, which is essentially a $500 discount. Make sure to apply within 90 days of purchasing the water heater, though.
For the application and more information about this rebate, follow this link.
Philadelphia Solar Incentives
There are a few solar incentives available in the City of Philadelphia specifically, most notably: City of Philadelphia – Solar Rebate Program, and Solarize Philly.
City of Philadelphia – Solar Rebate Program
This rebate, active until December 31st, 2024, is a one-time incentive available for all residents and businesses in Philadelphia. To be eligible, you have to install a solar system, get permission to operate from PECO, have no outstanding debts to the City, and not have any unresolved building code.
After receiving the rebate, your solar system has to remain operational for at least another 36 months and produce at least 80% of the energy projected in the application.
How much is the Philadelphia Solar Rebate Program, you ask? For residential projects, you get $0.20 per each watt produced, while commercial projects get $0.10 per each watt produced. Each project is capped at $100 000, so you can’t get more than that.
To learn more and apply, follow this link.
Another program available to Philadelphians, Solarize Philly makes it easier and more affordable for residents of Philadelphia to go solar. This includes loan loss reserves and a stable fund for the solar renewable energy credits.
This program is especially well-tailored for low and moderate-income households.
You might also be eligible for a lease, allowing you to go solar with no upfront costs. Check it out and apply here.
Net Energy Metering in Pennsylvania
A net metering program is available in Pennsylvania, with many people still wondering what net metering exactly is.
Net metering is a program in which owners of solar systems can participate in. In this program, all excess energy your solar system produces is taken off from your monthly energy bills.
It’s possibly the most effective way of lowering your electricity bills.
In Pennsylvania, all residential homes can apply, as well as businesses and other organizations. A bi-directional meter will be installed to keep track of your system.
It will measure how much energy (measured in kilowatts) is generated and sent towards the utility company. The energy is credited to your next bill at a full retail price and that amount is taken away from your bill!
This makes it easier to go solar as you’re instantly saving money on your electric bills, while you’re also becoming less reliant on your utility company. On top of all that, you’re producing clean, green energy.
Which Utilities in Pennsylvania Have Net Metering?
Pennsylvanian utilities that have net metering are Citizens Electric Co, Duquesne Light Co, Metropolitan Edison Co, Pennsylvania Electric Co, PPL Electric Utilities Corp, Pennsylvania Power Co, PECO Energy Co, Pike County Light & Power Co, UGI Utilities, Inc, Wellsborough Electric Co, and West Penn Power Co.
This program doesn’t only benefit you, but the utility companies as well, which is why most utility companies sign up for it.
Can You Combine These Incentives in Pennsylvania?
You can combine solar incentives in Pennsylvania, as long as it’s not specifically stated that you’re not allowed to do that. This can make it even cheaper to install your solar system.
Are There Rebates for Solar in Pennsylvania?
There’s a rebate in Philadelphia of $0.20 per kW produced, which can add up to $100 000 throughout the years (that’s the limit of the program).
There’s also the Solar Alternative Energy Credits program, where you get one Alternative Energy Credit for every 1000 kWh produced. You can then sell those credits for profit.
The Solar Energy Loan Program is also available, offering loans and grants to businesses and other organizations.
Can I Get Free Solar Panels in Pennsylvania?
It’s difficult for any program to ensure free solar panel installations, but Solarize Philly has a lease program with no upfront costs for low-income and moderate-income households. This is worth looking into.
Do Solar Panels Increase Property Taxes in Pennsylvania?
Yes, installing solar panels will most definitely increase property taxes, but this is why you should rely on rebates. If you play your cards right, you can get 30% of tax credit because of your solar panels.
How Does Solar Tax Credit Work in Pennsylvania?
The Inflation Reduction Act guarantees tax credit covering 30% of the installation costs of your solar system. You can claim it once you file your yearly tax report.
Can You Lower Your Electricity Bill Through Solar Energy in Pennsylvania?
Yes, you can lower your electricity bill by producing more electricity than you spend. The amount of energy you produce is measured on a monthly basis, and if you produce more than you spend, that amount will be taken off from your next monthly bill.
Pennsylvania has a broad selection of incentives and rebates that you should definitely take advantage of to minimize your financial straining. Aside from net metering, you can apply for tax credit (based on the IRA) and even for loans and grants.
On top of that, there are some fixed rebates for the purchase and installation of solar water heaters that are definitely worth looking into if your plan was to buy a new water heater.
All in all, going solar in Pennsylvania is now easier than ever.
How to Take Advantage of These Credits in Pennsylvania?
After doing your research, get a quote from one of our recommended installers in Pennsylvania. These professionals already know how to handle the applications for rebates and incentives, so they’ll be able to guide you through the process!
Read More: Best Solar Companies in Pennsylvania 2023