Find out what Pennsylvania programs are available to you!
*PECO, PPL, FirstEnergy, and Duquesne net-metering terms, PennAEPS SREC values, and federal credit status current as of June 2026, per 52 Pa. Code §75.13, PA PUC and PennAEPS filings, and IRS guidance on the One Big Beautiful Bill Act.
What Solar Incentives Does Pennsylvania Have in 2026?
Pennsylvania runs an incentive-light program that leans on stable utility rules instead of cash payments.
Two mechanisms carry the financial case: full-retail net metering, set by 52 Pa. Code §75.13, and the Alternative Energy Portfolio Standard market for solar renewable energy credits. Everything else is either gone or never existed here.
So it helps to weigh each incentive by how much you can count on it. Net metering is the anchor, locked in state regulation with no sunset on file. SREC income is real but rides a small market, so it counts as upside that can rise or fall. The federal credit now depends entirely on who owns the system. The tax exemptions other states offer are not on Pennsylvania’s books.
Incentive | How It Works | Who Collects It | Reliability |
|---|---|---|---|
Net metering (§75.13) | Exports credited at the full retail rate, with a year-end true-up | The system owner; the financier on a lease or PPA | High, fixed in state code |
SRECs (AEPS Tier I) | Sell 9.8 credits a year on the PennAEPS market | The owner; the financier on a lease or PPA | Low to moderate, price swings |
Federal credit, owned (25D) | $0 for systems completed after Dec. 31, 2025 | No one; expired for owners | None in 2026 |
Federal credit, leased (48E) | Financier claims 30% on a third-party-owned system | The financier, not you | Moderate, has a deadline |
Sales-tax exemption | None; the 6% tax applies to equipment and labor | Not applicable | None |
Property-tax exemption | None; no statewide solar exemption | Not applicable | None |
State cash rebate | None; PA Sunshine ended in 2013 | Not applicable | None |
The Federal Solar Tax Credit in Pennsylvania for 2026
The federal credit is the single biggest change to the Pennsylvania picture this year, and ownership decides whether you see any of it.
Homeowners Who Buy: Section 25D Is $0
The 30% Residential Clean Energy Credit under Section 25D ended for any system completed after December 31, 2025, under the One Big Beautiful Bill Act. The IRS treats the expense as made when installation finishes, so a system you complete in 2026 cannot claim it even if you paid a deposit in 2025. A Pennsylvania homeowner who buys or finances this year gets no federal credit, though unused credit from a pre-2026 install can still carry forward.
That one change is why net metering and the rate trend now carry the return, with the federal credit gone for owners. Whether solar pays off in Pennsylvania turns on that math.
Lease and PPA: Section 48E Still Reaches the System
One federal option remains. The Section 48E commercial credit still applies to third-party-owned systems, meaning a solar lease or power purchase agreement where the company owns the panels. The financier claims the 30% credit and may fold part of it into a lower monthly rate. Current terms require construction to begin by July 4, 2026, and that window is nearly closed as of mid-2026, so a lease signed today may not qualify unless the installer can show its build already started. The trade is also real: when a financier owns the system, that company keeps your SRECs and your net-metering credits. $0-down solar offers in Pennsylvania work exactly this way, with the financier capturing the incentives in exchange for the lower monthly payment.
Net Metering in Pennsylvania: Full-Retail Credit Under §75.13
Net metering is the incentive that makes solar work in Pennsylvania, and the state’s version is among the stronger ones still standing.
Under 52 Pa. Code §75.13, every Pennsylvania utility regulated by the PUC credits the electricity your panels send to the grid at the full retail rate, generation, transmission, and distribution combined. When your panels overproduce during the day, those credits roll forward month to month at full value, and you are billed only for the net power you draw. The residential cap is 50 kW, seven times the size of a typical 7 kW home system.
How Year-End Credits Settle at the Price to Compare
The credits do not stay at full retail forever. At the close of the compliance year on May 31, the utility cashes out any leftover credit balance at the Price to Compare, the default generation-and-transmission rate, which sits below the full retail rate. That lower true-up is why sizing matters. A system built to cover a year’s use captures full-retail value all year, while an oversized system banks surplus that gets trued up at the cheaper rate. In practice the May 31 payout on a well-sized system is small and arrives as a credit or check worth a fraction of full retail, so the aim is to use your production as you generate it rather than bank a surplus you will be paid little for. Size to your yearly usage, not to fill the roof.
How Net Metering Varies Across Pennsylvania Utilities
The crediting rule is statewide, but the year-end true-up rate depends on your utility, since each sets its own Price to Compare. Most of these rates reset on June 1, though Duquesne adjusts quarterly, and all have been climbing.
Utility | Price to Compare (June 1, 2026) | Share of Residential Customers |
|---|---|---|
PECO | 11.572¢/kWh | 29% |
PPL | 13.147¢/kWh | 19% |
Duquesne Light | 14.14¢/kWh | 10% |
FirstEnergy (Met-Ed, Penelec, Penn Power, West Penn) | 12.075¢ to 13.951¢/kWh | 35% |
The remaining customers are served by small utilities. A 2026 PUC decision affecting PPL applies only to export-focused systems above 100 kW, so home systems keep full-retail crediting. If a borough utility or rural cooperative serves you, confirm its policy directly, because those providers are not bound by §75.13.
These utility rates shape the total bill you offset, which feeds straight into what solar costs in Pennsylvania.
Why Rising Pennsylvania Electric Rates Lift Net-Metering Value
An incentive that credits you at the retail rate grows more valuable every time that rate climbs, and Pennsylvania rates are climbing.
The statewide residential price reached 20.43¢/kWh in 2026, 14.1% above the national average and rising at a five-year compound rate of 5.19%.
Most of that pressure traces to the regional grid: PJM Interconnection, the operator that runs Pennsylvania’s wholesale power market, has seen its capacity prices jump, and those costs flow into every utility’s rates no matter which supplier you buy generation from.
PPL settled its first distribution rate increase since 2016 in March 2026, adding $7.42 to the average monthly bill from July 1, and the other utilities reset their Price to Compare upward on the same June 1 schedule.
This is what makes net metering a compounding benefit rather than a fixed one. Because the credit follows the retail rate, a kilowatt-hour you offset today is worth more each year the rate rises, so the payback you would calculate at today’s price shortens if rates keep climbing at their recent pace.
Pennsylvania does not hand you a rebate check; it hands you a smaller electric bill, and a rising rate makes that bill smaller every year for the 25-year life of the system.
Pennsylvania SREC Income and How the AEPS Market Works
Pennsylvania’s second incentive pays you as income, but it comes with real swings.
Your system earns one Solar Renewable Energy Credit (SREC) for every 1,000 kWh it produces, under the state’s Alternative Energy Portfolio Standard. A typical 7.01 kW Pennsylvania system generates 9,807 kWh a year, so it earns 9.8 credits annually.
The market exists because the AEPS requires every Pennsylvania utility to source a small slice of its power from in-state solar each year, the Tier I solar carve-out, and utilities meet that obligation by buying these credits.
To sell your SRECs, you register the system with the PennAEPS administrator, open a PJM-GATS account that meters its output, and then sell through a broker who aggregates many homes, since one household’s handful of credits is too small to trade on its own.
What those credits pay changes from year to year. The weighted-average price for a Pennsylvania solar credit was $33.20 per credit in the CY2024/25 energy year, which earns a 7.01 kW system $325 a year.
Recent broker spot quotes have run lower, at $22.50, a single-source figure that shifts week to week. The Solar Alternative Compliance Payment that caps the market is $66.40, set by formula at 200% of the prior year’s weighted average.
Two rules shape that income. Act 40 of 2017 limited eligibility to systems sited in Pennsylvania, which steadied a market that out-of-state oversupply had pushed down. Credits also expire three years after they are minted, and the income counts as taxable.
On a lease or PPA, the financier holds the SRECs, so that yearly payment goes to the company, not to you. Treat SREC income as a bonus the market can shrink in any year, never a stream to bank on.
Pennsylvania Has No Solar Rebate or Tax Exemptions
Several incentives that homeowners in nearby states count on are absent in Pennsylvania, so it pays to know what is not here before you plan around it.
No Sales-Tax Exemption: The 6% Tax Applies
Pennsylvania charges its 6% state sales tax on residential solar equipment and installation, with no exemption.
The basis is the Department of Revenue’s Sales and Use Tax Bulletin 2010-01, which holds that home solar does not qualify for the manufacturing exclusion. On a $19,908 system that adds $1,194, and Allegheny County adds 1% more while Philadelphia adds 2%. Neighboring states that waive this tax start their homeowners ahead.
No Property-Tax Exemption for Added Solar Value
Solar can raise a home’s market value, but the State of Pennsylvania does not shield that added value from property tax.
The county assessment law at 53 Pa.C.S. §8811 lists exempt improvements and is silent on solar, so treatment falls to county practice. Homeowners in states with a solar property-tax exemption avoid a yearly cost that many Pennsylvania homeowners must pay.
In practice many counties do not single out rooftop solar for reassessment, but nothing in the law stops them, so your exposure depends on your county assessor rather than on a statewide protection you can count on.
The State Rebate (PA Sunshine Solar Program) Ended in 2013
Pennsylvania did run a cash rebate for solar at one point in time. The PA Sunshine Solar Program paid up to $0.75 per watt, but it stopped taking applications after December 31, 2013, when its funding ran out.
No statewide cash rebate has replaced it, and a separate Philadelphia city rebate closed at the end of 2024. If you see a current offer for a Pennsylvania state solar rebate, it is out of date
Beyond confirming your own utility’s net-metering terms, there are no active statewide municipal or utility solar rebates to chase; a city or borough program is the rare exception worth a quick local check.
Who Qualifies for Pennsylvania Solar Incentives?
Whether you qualify for Pennsylvania solar incentives depends on three things: who owns the system, which utility serves you, and how big the system is.
Ownership
Ownership comes first. Buy or finance the system and you keep the net-metering credits and the SRECs. Sign a lease or PPA and the financier owns the system, collecting both along with the 48E federal credit. That is the core trade in any $0-down offer: someone else takes the incentives in exchange for the lower payment.
Your Utility Company
Your utility comes second. Customers of PECO, PPL, Duquesne, and the FirstEnergy companies all get full-retail net metering, but the year-end true-up rate differs by territory, so the same system pays back a little differently depending on who serves you. If a borough utility or rural cooperative serves you, confirm its policy directly, since those providers write their own rules and are not bound by §75.13.
System Size
System size comes third. The residential net-metering cap is 50 kW, and the SREC market pays on production, so a system sized to your annual use qualifies cleanly for both without banking surplus that trues up at the lower rate.
Who Doesn’t Qualify & When Solar Incentives Aren’t Worth It
Some Pennsylvania homeowners get little or nothing when it comes to incentives, so check these cases before you sign anything.
Renters and condo owners: Pennsylvania has no operational community-solar program; House bills 1155 and 504 remain in committee, and neither has been enacted, despite claims that a program launched in 2025.
Without community solar, the usual fallback for people who cannot put panels on their own roof does not exist in the state, so shopping a competitive supplier on PAPowerSwitch is the practical option.
Low-usage homes: Solar pays back more slowly for low-usage homes. Below 400 to 500 kWh a month, a small system costs more per watt while the fixed monthly customer charge keeps the bill above zero, stretching payback past the usual range, so efficiency upgrades come first.
Aging or shaded roofs: A roof with under 10 to 15 years of life should be replaced before panels go on.
Homeowner who expect to move: If you expect to move within five years, ownership rarely pays back in time, though a transferable lease can be an option.
A qualified local installer can confirm these conditions before you commit; start with vetting Pennsylvania solar installers.
Check Which PA Solar Incentives You Qualify For
Pennsylvania’s incentives turn on your utility, your roof, your usage, and whether you own the system.
Enter your ZIP code to see which net-metering terms and programs apply where you live, and what a system sized to your home would save.
Find out what Pennsylvania programs are available to you!
Frequently Asked Questions
No. Pennsylvania has no state solar tax credit and no active cash rebate. The PA Sunshine rebate ended in 2013, and no statewide program has replaced it. The financial benefit comes from net metering and selling SRECs, not from upfront state payments.
Not for systems you own. The 30% Section 25D credit ended for systems completed after December 31, 2025. Only third-party-owned systems, through a lease or PPA, can still capture the 30% credit under Section 48E, and the financier claims it, not you.
The weighted-average price for a Pennsylvania solar credit was $33.20 per credit in the CY2024/25 energy year, which earns a typical 7.01 kW system $325 a year. Recent broker spot quotes have been lower, at $22.50. Prices shift, so treat the income as money that can rise or fall.
Yes. Under 52 Pa. Code §75.13, utilities regulated by the PUC credit exported electricity at the full retail rate, with leftover credits trued up each May 31 at the lower Price to Compare. The residential cap is 50 kW. Municipal utilities and cooperatives set their own terms.
No. Pennsylvania has no operational community-solar program as of June 2026. Legislation has been introduced but not enacted, so renters and homeowners who cannot install panels have no community-solar option in the state.
Yes. Pennsylvania applies its 6% sales tax to residential solar equipment and installation, with no exemption. On a $19,908 system that adds $1,194, and Allegheny County and Philadelphia add 1% and 2% more.
References & Research Sources:
EcoGen America reviewed federal electricity price data, Pennsylvania net metering regulations, Alternative Energy Portfolio Standards reports, alternative energy credit pricing data, federal tax guidance, Pennsylvania tax guidance, property assessment statutes, utility commission rate materials, solar production modeling tools, expired solar rebate program materials, and community solar legislation for this article. Sources were accessed July 12, 2026, unless another publication, release, effective, or update date is listed below.
- U.S. Energy Information Administration (EIA). Electric Power Monthly, Table 5.6.B: Average Price of Electricity to Ultimate Customers by End-Use Sector, by State, Year-to-Date. Federal residential electricity price data table. Data for April 2026; released June 25, 2026. Accessed July 12, 2026.
- Pennsylvania Code & Bulletin. 52 Pa. Code § 75.13: General Provisions. Pennsylvania net metering regulation under Chapter 75, Alternative Energy Portfolio Standards. Accessed July 12, 2026.
- Pennsylvania Public Utility Commission (PUC). Alternative Energy Portfolio Standards Act of 2004: Compliance for Reporting Year 2023–2024. AEPS Annual Report 2024. Accessed July 12, 2026.
- Pennsylvania Alternative Energy Portfolio Standard Program (PennAEPS). 2024/2025 Alternative Energy Credit Pricing. Alternative energy credit pricing resource for Solar PV, Tier I, and Tier II credits. Published September 25, 2025. Accessed July 12, 2026.
- Internal Revenue Service (IRS). FAQs for Modification of Sections 25C, 25D, 25E, 30C, 30D, 45L, 45W, and 179D Under Public Law 119-21. Fact Sheet FS-2025-05. Published August 21, 2025. Accessed July 12, 2026.
- Pennsylvania Department of Revenue. Sales and Use Tax Bulletin 2010-01: Electricity Manufacturing Exemption. Sales and use tax guidance related to electricity manufacturing and solar photovoltaic systems. Issued July 28, 2010. Accessed July 12, 2026.
- Pennsylvania General Assembly. 53 Pa.C.S. § 8811: Subjects of Local Taxation. Consolidated County Assessment Law provision. Accessed July 12, 2026.
- Pennsylvania Public Utility Commission (PUC). PUC Alerts Consumers to June 1 Electric Price Changes and Higher Summer Energy Costs. Electric price change consumer alert. Published May 20, 2026. Accessed July 12, 2026.
- Pennsylvania Bulletin. Implementation of Act 35 of 2007; Net Metering and Interconnection. Pennsylvania Public Utility Commission final-omitted rulemaking order; 38 Pa.B. 6473; Doc. No. 08-2145. Published November 29, 2008. Accessed July 12, 2026.
- Pennsylvania Bulletin. Implementation of Act 40 of 2017. Pennsylvania Public Utility Commission tentative implementation order; 48 Pa.B. 111; Doc. No. 18-35. Published January 6, 2018. Accessed July 12, 2026.
- PPL Electric Utilities. PPL Electric Utilities Reaches Settlement in First Distribution Rate Increase Since 2016. Utility distribution rate settlement announcement related to Docket R-2025-3057164. Published March 13, 2026. Accessed July 12, 2026.
- National Renewable Energy Laboratory (NREL). PVWatts Calculator. Solar photovoltaic energy production modeling tool. Accessed July 12, 2026.
- Pennsylvania Department of Environmental Protection (DEP). Pennsylvania Sunshine: Guidelines for the Residential and Small Business Solar Program. Expired Pennsylvania solar rebate program guidelines. Revised January 2013. Accessed July 12, 2026.
- Pennsylvania General Assembly. House Bill 1155: Community Solar Facilities. Proposed legislation providing for community solar facilities and related duties for the Pennsylvania Public Utility Commission, electric distribution companies, and subscriber organizations. Accessed July 12, 2026.
- Pennsylvania General Assembly. House Bill 504: Community Energy Facilities. Proposed legislation providing for community energy facilities and related duties for the Pennsylvania Public Utility Commission, electric distribution companies, and subscriber organizations. Accessed July 12, 2026.
