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Pennsylvania homeowners pay an average of $0.19/kWh in 2026 — 6% above the national average and rising faster than almost any other state. PECO, PPL, Met-Ed, and Penelec rates have all surged since 2020. Here is exactly what happened, why, and what you can do about it.
Pennsylvania has four major utilities serving different regions. PECO (Philadelphia area) is the most expensive, while Penelec (western PA) offers the lowest rates. PA is a deregulated state — you can choose your electricity supplier.
~1.6 million
$0.19
per kWh (2026)
~1.4 million
$0.18
per kWh (2026)
~560,000
$0.17
per kWh (2026)
~590,000
$0.16
per kWh (2026)
PA is deregulated — but solar beats any supplier
Pennsylvania deregulated electricity in 1996, allowing customers to choose competitive suppliers. While switching suppliers can save 5-10% on the supply portion of your bill (~$100-200/year), solar eliminates 80-90% of your total bill ($2,500-3,500/year). Even the best competitive rate cannot match generating your own electricity for $0/kWh for 25+ years.
Pennsylvania electricity rates have increased approximately 45% since 2020 — one of the fastest rates of increase in the US. What was once a "cheap electricity" state is rapidly becoming expensive.
| Utility | 2020 | 2021 | 2022 | 2023 | 2024 | 2025 | 2026 | 6-Year Change |
|---|---|---|---|---|---|---|---|---|
| PECO | $0.1310 | $0.1420+8.4% | $0.1580+11.3% | $0.1720+8.9% | $0.1850+7.6% | $0.1780-3.8% | $0.1900+6.7% | +45.0% |
| PPL | $0.1240 | $0.1340+8.1% | $0.1490+11.2% | $0.1630+9.4% | $0.1760+8.0% | $0.1690-4.0% | $0.1800+6.5% | +45.2% |
| Met-Ed | $0.1180 | $0.1280+8.5% | $0.1420+10.9% | $0.1550+9.2% | $0.1670+7.7% | $0.1600-4.2% | $0.1700+6.3% | +44.1% |
| Penelec | $0.1120 | $0.1210+8.0% | $0.1340+10.7% | $0.1460+9.0% | $0.1570+7.5% | $0.1510-3.8% | $0.1600+6.0% | +42.9% |
Pre-pandemic baseline: PA avg ~$0.13/kWh. Among the cheapest states east of the Mississippi thanks to nuclear + gas generation.
Post-COVID demand recovery. Natural gas prices begin climbing. PECO rate cap expiration for some legacy customers adds 8-12% increase.
Russia-Ukraine war drives gas prices up. PA nuclear plants request higher capacity payments. All four utilities see 7-10% increases.
PJM capacity auction clears at record prices. FirstEnergy (Met-Ed/Penelec) base rate case approved with 5.8% increase.
PECO peaks at $0.185/kWh. PPL files multi-year rate plan. Gas price volatility persists. SREC prices stabilize at $35-50/MWh.
PPL rate increase approved. PJM capacity costs flow through. Nuclear plant relicensing costs begin appearing in rates.
PECO reaches $0.19/kWh. PA avg now $0.19 — up 45% from 2020. No longer a "cheap electricity" state.
PA was long a cheap-electricity state, but structural changes in energy markets are driving rapid rate increases that are unlikely to reverse.
Pennsylvania generates ~45% of its electricity from natural gas. While PA produces more natural gas than any other state (Marcellus Shale), pipeline constraints mean local generation still pays market prices. When gas spikes, PA electricity costs follow — even though the gas is produced right here.
PJM Interconnection (PA's grid operator) runs capacity auctions that have cleared at record prices. The 2025/26 Base Residual Auction cleared at significantly higher prices than previous years due to generator retirements and new reliability requirements. These costs are passed directly to all PA ratepayers.
Pennsylvania has 5 operating nuclear plants generating ~35% of the state's electricity. As these plants age, maintenance costs increase and relicensing requires significant capital investment. These costs are recovered through generation charges, adding ~$0.01/kWh to rates compared to 5 years ago.
When PA deregulated in 1996, many customers received rate caps that shielded them from market prices. As these caps have expired (the last ones in 2020-2021), customers saw immediate 15-25% increases as their rates adjusted to reflect actual wholesale market costs. This catch-up effect is permanent.
All four major PA utilities are investing in smart meters, distribution automation, and storm hardening. PECO alone is spending $2.5B+ on capital improvements. These costs are recovered through delivery charge increases over 20-30 years, regardless of supply cost changes.
Pennsylvania's Alternative Energy Portfolio Standard (AEPS) requires utilities to source increasing percentages from renewable and alternative energy. SREC purchases, solar carve-out compliance, and renewable energy certificate costs add approximately $0.005-0.01/kWh to total rates.
$0.059/kWh
PECO rate increase since 2020. On a 900 kWh/month home, that is $53/month more than 6 years ago.
$637/yr
Annual cost increase for a typical PECO home vs. 2020 rates, purely from rate inflation.
$15,930+
Cumulative extra cost over 25 years if rates stay at current levels vs. 2020 rates. Solar locks in your rate at $0.
Based on PUC filings, PJM capacity market results, and utility capital spending plans, here is what Pennsylvania ratepayers should expect.
Quarterly PTC adjustment expected to increase supply rate. Total rate projected at $0.195-0.20/kWh by year-end.
Multi-year rate plan Phase 2. Delivery charges increase 4-5%. Total rate projected at $0.19-0.20/kWh.
New base rate case filing expected. Grid modernization costs begin flowing. Total rates up 6-8%.
Record capacity auction prices locked in. All PA utilities will see higher capacity charges — adding ~$0.01-0.015/kWh.
Peach Bottom (2034), Limerick (2044-49) relicensing costs begin accruing. $500M+ in capital spending flows into generation charges.
PA rates projected to reach $0.22-0.24/kWh by 2028. No longer a cheap-electricity state. Gap with New England narrowing rapidly.
Bottom Line on PA Rate Forecasts
Pennsylvania is no longer a cheap-electricity state. The structural factors — PJM capacity costs, nuclear relicensing, grid modernization, and gas price volatility — all push rates higher. PA rates are projected to reach $0.22-0.24/kWh by 2028. Solar with SRECs and net metering is the only way for PA homeowners to lock in a $0/kWh electricity cost for 25+ years.
Every kWh your solar panels generate avoids the full retail rate. PA's 1:1 net metering and SREC income create a compelling case even at $0.19/kWh — and savings grow as rates increase.
| System Size | Annual kWh | Bill Offset | Monthly Savings | Annual Savings | 25-Year Savings | Payback (No ITC) |
|---|---|---|---|---|---|---|
| 7 kW | 8,400 | 85% | $149 | $1,788 | $44,700 | 13.2 years |
| 9 kW | 10,800 | 88% | $198 | $2,376 | $59,400 | 12.5 years |
| 11 kW | 13,200 | 91% | $250 | $3,000 | $75,000 | 11.8 years |
| 14 kW | 16,800 | 94% | $329 | $3,948 | $98,700 | 11.2 years |
Based on $2.90/W system cost (PA average), $0.19/kWh rate, 1,200 kWh/kW annual production, no federal ITC (expired 2025), SREC income included in payback.
Pennsylvania's SREC program pays solar owners for every MWh generated. At current prices of $35-50/MWh, a 10 kW system earns approximately $420-600/year in SREC income on top of bill savings. SRECs are traded on the open market and prices can fluctuate, but PA's solar carve-out requirement ensures ongoing demand for SRECs through at least 2030.
PA rates have increased 45% since 2020 — faster than New England states that were already expensive. This rapid increase means solar installed today will be worth significantly more in 5-10 years as rates continue climbing. Every $0.01/kWh increase adds ~$132/year in savings for an 11 kW system. If PA rates reach $0.24/kWh by 2028, your system saves $660/year morethan at today's rates.
$0.19/kWh
Current PA Rate
Every kWh your solar generates is worth $0.19 in avoided electricity costs. Six years ago, it was worth only $0.13. PA rates are rising faster than almost any other state.
11-13 yrs
Payback Period
Without the federal ITC (expired 2025), PA's lower system costs ($2.90/W), 1:1 net metering, and SREC income bring payback under 13 years for most homes.
$75K+
25-Year Savings
An 11 kW system saves $75,000+ over its lifetime from bill savings + SREC income. If rates rise 4%/year (likely), total value exceeds $100,000.
For an 11 kW system producing 13,200 kWh/year:
Rate increase scenarios (25-year impact):
Every month you wait, you pay another $175-350 in electricity costs that solar could eliminate. PA solar costs are among the lowest in the Northeast at $2.90/W.
No sales calls. Instant online estimate. See your exact savings at current PA rates.