Loading NuWatt Energy...
We use your location to provide localized solar offers and incentives.
We serve MA, NH, CT, RI, ME, VT, NJ, PA, and TX
Loading NuWatt Energy...
Pennsylvania has arguably the worst state-level solar incentive stack of any major solar market. No property tax exemption, no sales tax exemption, no state credit, and SRECs worth a fraction of neighboring New Jersey. Here is the honest picture — and why some homeowners still save.
NONE
Sales Tax Exemption
$0.15/kWh
Avg Electric Rate
$28/MWh
SREC Value
~10 yrs
Avg Payback
Pennsylvania homeowners have the thinnest incentive stack in the Northeast. The federal ITC (Section 25D) expired Dec 31, 2025 — $0 federal credit. PA charges 6% sales tax on solar equipment (no exemption), solar increases your property taxes (no exemption), and SRECs are worth only $22-35/MWh (vs NJ's $85.90/MWh). What PA does have: 1:1 net metering at $0.14-$0.17/kWh (for now), weak but present SRECs, and Section 48/48E for lease/PPA through July 4, 2026. Payback is approximately 10 years for a 10 kW cash purchase at $3.05/W.
PA's active incentive list is short. Here is everything that still works — and everything that does not.
$0.14-$0.17/kWh
Full retail credit for excess solar. Monthly rollover with annual PTC true-up. PPL may shift to hourly LMP ~July 2026.
~$1,734/yr (PECO, 10 kW)
$22-$35/MWh
PA AEPS requires 0.5% solar — weakest carve-out in the region. SRECs trade via PJM-GATS. 1 SREC = 1 MWh produced.
~$336/yr (10 kW avg)
30%+ ITC
Third-party system owners (lease/PPA companies) claim 30% commercial ITC. The homeowner does not claim this directly.
Lower PPA/lease rate
$0
Expired December 31, 2025. No federal credit for homeowner cash or loan purchases.
NONE
PA has NO property tax exemption for solar. Your solar panels INCREASE your assessed property value and property taxes.
NONE
PA charges 6% state sales tax on solar equipment. A $30,500 system costs you an extra $1,830 in tax.
$0
Pennsylvania has never offered a state solar tax credit. No state-level credit exists.
NOT YET OPERATIONAL
HB 1155 signed April 7, 2025 but PUC rules due April 2026. You cannot subscribe yet.
Let us be direct: Pennsylvania offers the worst state-level solar incentive package of any major solar market in the Northeast. While NJ, CT, MA, and RI all exempt solar from sales and property taxes, PA charges both. While NJ pays $85.90/MWh for SRECs through its ADI program, PA's weak 0.5% solar carve-out means SRECs trade at a fraction of that — $22-35/MWh.
The math is straightforward: a 10 kW system in PA costs approximately $30,500 + $1,830 in sales tax = $32,330. In NJ, that same system costs approximately $30,500 with $0 in sales tax, $0 in property tax increase, and $85.90/MWh in SREC payments. PA homeowners start from a worse position on every metric except one: 1:1 net metering is still intact.
Despite all of this, solar can still make financial sense in PA. With 1:1 net metering, moderate electricity rates ($0.14-$0.17/kWh), decent solar production (~1,200 kWh/kW/year), and SRECs worth something (not nothing), many PA homeowners see a payback around 10 years on a 25+ year asset. The returns are thinner than in neighboring states, but they are real.
Any solar company telling you the "30% federal tax credit is still available" for homeowner-owned systems is either uninformed or deliberately misleading you. Section 25D expired on December 31, 2025. If a solar salesperson claims otherwise, walk away.
Exception: Section 48/48E commercial credits are still available for third-party system owners (solar lease and PPA companies) on projects beginning construction before July 4, 2026. The homeowner does not claim this credit — the financing company does, and passes savings through as a lower rate.
PA net metering provides full retail credits for excess solar. This is the single most important incentive left. PPL may change to hourly LMP ~July 2026, reducing value for PPL customers. PECO and Duquesne have not announced changes.
PA SRECs at $22-35/MWh add ~$336/year for a 10 kW system. Not much, but it is money. If PRESS legislation passes, SRECs could jump to $100+/MWh — a game-changer that would transform PA solar economics overnight.
In states with tax exemptions, buying is usually better. In PA, leasing has an unusual advantage: the TPO company absorbs the property tax impact, claims Section 48 credits, and handles SREC complexity. The math favors leasing more in PA than in most states.
Net metering is PA's most important solar incentive — and the one most at risk. Currently, all three major utilities provide 1:1 retail credits for excess solar, but PPL's proposed shift to hourly LMP pricing could change the equation for central and eastern PA customers.
$0.17/kWh
SE PA / Philadelphia (1.6M customers)
10 kW system annual savings: ~$1,734/yr
NM change risk: Low
$0.15/kWh
Central & Eastern PA (1.4M customers)
10 kW system annual savings: ~$1,530/yr
NM change risk: HIGH — LMP change possible
$0.14/kWh
Pittsburgh / Allegheny (600K customers)
10 kW system annual savings: ~$1,428/yr
NM change risk: Low
PPL Electric has proposed shifting from 1:1 retail net metering to hourly LMP (Locational Marginal Pricing) credits, potentially around July 2026. Under LMP, credits would be based on the real-time wholesale market price at the time your solar produces — typically $0.03-$0.06/kWh during midday solar peak hours, far below the $0.15/kWh retail rate.
If you are a PPL customer, acting before this change is finalized could lock in 1:1 retail net metering under a grandfathered arrangement. Contact us for current PPL interconnection timelines.
This is where PA differs most painfully from its neighbors. In NJ, CT, MA, and RI, solar is exempt from property tax assessment. In Pennsylvania, there is no exemption — your solar panels add to your assessed property value, and you pay higher taxes every year.
Solar panels typically add $2,000-$3,000 per kW to your home's assessed value. At PA's average effective property tax rate (~2.03%), a 10 kW system adding ~$20,000 in value costs approximately:
$20,000 assessed value x 20.3 mills = ~$406/year in additional property taxes
Over 25 years: ~$10,150 in extra taxes
Pennsylvania charges 6% state sales tax on solar equipment, inverters, racking, and installation materials. This is not a small number. Your neighbors in NJ, CT, MA, and RI all pay $0 in sales tax on solar.
8 kW System
Equipment: $24,400
$1,464
in PA sales tax
In NJ/CT/MA/RI: $0
10 kW System
Equipment: $30,500
$1,830
in PA sales tax
In NJ/CT/MA/RI: $0
12 kW System
Equipment: $36,600
$2,196
in PA sales tax
In NJ/CT/MA/RI: $0
Pennsylvania's Alternative Energy Portfolio Standards (AEPS) Act requires utilities to source 0.5% of electricity from solar — the weakest solar carve-out in the region. This low mandate means oversupply, which depresses SREC prices. One SREC = 1 MWh of solar production, traded via PJM-GATS.
PA SRECs: $28/MWh avg x 12 = $336/year
NJ ADI: $85.90/MWh x 12 = $1,031/year
NJ homeowners earn 3x more per MWh than PA homeowners. The difference: NJ has a strong solar carve-out; PA does not.
The Pennsylvania Renewable Energy Standard Surge (PRESS) legislation would raise the solar carve-out from 0.5% to 5.5% — an 11x increase. This would dramatically boost demand for PA SRECs and push prices higher, potentially to $100+/MWh. If PRESS passes, a 10 kW system's SREC income could jump from $336/year to $1,200+/year.
Status (March 2026): PRESS has not passed. Its fate remains uncertain in the current legislative session. Do not count on it when making your solar decision — but if it passes, it would transform PA solar economics.
In most states, buying solar outperforms leasing. PA is different. Because PA has no tax exemptions, the lease/PPA model offers unusual advantages — the third-party owner absorbs property tax exposure, claims Section 48/48E credits, and handles SREC complexity.
Deadline: July 4, 2026 — Projects must begin construction before this date
After July 4, 2026, the Section 48/48E commercial ITC will no longer be available for new residential solar projects. Lease/PPA prices will likely increase significantly.
| Factor | Buy (Loan) | Lease/PPA |
|---|---|---|
| Upfront cost | $30,500 + $1,830 tax | $0 |
| Monthly payment | ~$280/mo (7.5% APR, 15yr) | ~$90-$120/mo |
| You own system? | Yes | No |
| Federal credit | None (25D expired) | 48/48E to owner (until July 2026) |
| SRECs | You keep them (~$336/yr) | Company keeps them |
| Property tax impact | YOUR taxes go up | Company handles |
| 25-year savings | $25K-$35K | $8K-$18K |
| Maintenance | Your responsibility | Company handles |
A PPA lets you buy solar electricity at a fixed rate lower than your utility rate:
PA is a competitive choice state with three major electric distribution companies. Your utility determines your net metering rate and interconnection process.
| Feature | PECO | PPL Electric | Duquesne Light |
|---|---|---|---|
| Territory | SE PA / Philadelphia | Central & Eastern PA | Pittsburgh / Allegheny Co. |
| Customers | ~1.6M | ~1.4M | ~600K |
| Avg Rate | $0.17/kWh | $0.15/kWh | $0.14/kWh |
| Net Metering | 1:1 retail | 1:1 retail (at risk) | 1:1 retail |
| Annual Savings (10 kW) | ~$1,734 | ~$1,530 | ~$1,428 |
| NM Change Risk | Low | HIGH (hourly LMP) | Low |
| Interconnection | 4-8 weeks | 4-8 weeks | 4-6 weeks |
| Choice Market | Yes — shop supply | Yes — shop supply | Yes — shop supply |
Governor Shapiro signed HB 1155 on April 7, 2025, authorizing community solar in Pennsylvania. However, the PUC must finalize implementation rules by approximately April 2026, and the first projects are unlikely to be operational before late 2026 or early 2027.
Bottom line: You cannot subscribe to community solar in PA today. When it launches, it will be an option for renters, condo owners, and homeowners with shaded roofs. We will update this guide when subscriptions become available.
Adjust system size and utility to see exactly how PA solar economics work — including the sales tax you will pay and the property tax increase you will absorb. No sugarcoating.
See exactly how Pennsylvania solar economics work for your system. Warning: PA has the weakest incentive stack of any major Northeast solar market.
Federal Solar ITC (Section 25D): EXPIRED
$0 for homeowner cash or loan purchases. Expired December 31, 2025. PA also has NO sales tax exemption and NO property tax exemption for solar.
Southeastern PA / Philadelphia metro
Equipment Cost
$30,500
+ Sales Tax (6%)
+$1,830
Annual Production
12,000 kWh
Electric Rate
$0.17/kWh
Solar adds ~$20,000 to assessed value, increasing your property taxes
Net Annual
$1,664
per year
Payback
19.4
years
25-Year Net
$9,270
lifetime
Benefits (Year 1)
Costs (Year 1)
Estimates based on PA avg pricing ($3.05/W), 1:1 net metering at PECO (Exelon) retail rate ($0.17/kWh), SRECs at $28/MWh, 6% PA sales tax (NOT exempt), property tax increase at ~20.3 mills avg effective rate (NO exemption). Section 25D residential ITC expired Dec 31, 2025 — $0 federal credit. PPL net metering may shift to hourly LMP ~July 2026.
The comparison is not kind to Pennsylvania. PA trails every neighbor on state-level solar incentives.
| State | Avg Rate | Sales Tax | Property Tax | Net Metering | SREC/Program | Payback |
|---|---|---|---|---|---|---|
| Pennsylvania | $0.14-$0.17 | 6% — TAXED | TAXED (no exemption) | 1:1 retail (at risk) | $22-35/MWh (0.5%) | ~10 years |
| New Jersey | $0.26 | 100% exempt | 100% exempt | Full retail | $85.90/MWh (ADI) | 14-16 years |
| Connecticut | $0.27-$0.28 | 100% exempt | 100% exempt | Full retail | No SRECs | 8-10 years |
| Massachusetts | $0.28-$0.32 | 100% exempt | 100% exempt | ~60% NEM 3.0 | SMART $0.03/kWh | 12-14 years |
PA's solar policy has been incrementally supportive at best, with the AEPS solar carve-out never rising above 0.5%.
PA Alternative Energy Portfolio Standards (AEPS) Act signed — creates solar carve-out
AEPS solar requirement reaches 0.5%. SREC market emerges in PJM-GATS.
Net metering rules codified by PUC. 1:1 retail rate for systems up to 110% of annual usage.
PRESS legislation introduced — would raise solar carve-out to 5.5% and boost SREC prices.
HB 1155 community solar bill signed by Governor Shapiro. PUC rulemaking begins.
Federal residential ITC (Section 25D) expires. $0 for PA homeowner purchases.
PA solar relies on net metering + weak SRECs. PRESS fate uncertain. PPL may shift to hourly LMP.
Common questions about Pennsylvania solar incentives in 2026.
No. The federal residential solar tax credit (Section 25D) expired on December 31, 2025. Pennsylvania homeowners who purchase solar with cash or a loan receive $0 in federal credits. However, solar lease and PPA companies can still claim Section 48/48E commercial credits on projects beginning construction before July 4, 2026.
No. Pennsylvania is one of the few major solar markets with NO property tax exemption for residential solar. When you install solar panels, the added value increases your assessed property value, and you pay higher property taxes. At PA average mill rates (~20.3 mills), a 10 kW system adding ~$20,000 in value costs approximately $406 more per year in property taxes.
No. Pennsylvania charges 6% state sales tax on solar equipment, inverters, racking, and installation materials. On a 10 kW system at $3.05/W ($30,500), you pay approximately $1,830 in sales tax. Unlike New Jersey, Connecticut, and Massachusetts — which all exempt solar from sales tax — PA offers no exemption.
Solar Renewable Energy Credits (SRECs) are tradeable certificates earned for every megawatt-hour (MWh) your solar system produces. PA AEPS requires utilities to source 0.5% from solar — the weakest carve-out in the region. SRECs trade at $22-35/MWh via PJM-GATS. A 10 kW system producing ~12 MWh/year earns approximately $336/year. Compare that to NJ ADI payments of $85.90/MWh.
PA net metering provides 1:1 full retail credits for excess solar electricity on a monthly basis. Unused credits carry forward month-to-month and are trued up annually at the Price-to-Compare (PTC) rate — the generation supply rate only, not the full retail rate. Systems are limited to 110% of your prior 12-month usage. PPL Electric may shift to hourly LMP-based credits around July 2026, which could reduce the value of net metering for PPL customers.
The Pennsylvania Renewable Energy Standard Surge (PRESS) legislation would raise the solar carve-out from 0.5% to 5.5%, dramatically increasing demand for PA SRECs and pushing prices higher — potentially to $100+/MWh. As of March 2026, PRESS has not passed. Its fate is uncertain in the current legislative session.
Yes, for many homeowners — but PA solar works despite the state, not because of it. Net metering at $0.14-$0.17/kWh offsets your utility bill, and SRECs add modest income ($336/yr for 10 kW). Payback is approximately 10 years for a cash purchase. Solar panels last 25+ years, so you get 15+ years of essentially free electricity after breakeven. Lease/PPA offers an easier path since the financing company handles tax exposure and property tax impacts.
In PA specifically, leasing has an unusual advantage: the third-party owner handles the property tax implications (since PA has no exemption), can claim Section 48/48E credits through July 2026, and keeps the SRECs but passes savings through as lower payments. Buying maximizes long-term savings ($25K-$35K over 25 years vs $8K-$18K for lease) but requires absorbing the 6% sales tax, property tax increase, and higher upfront cost.
Governor Shapiro signed HB 1155 on April 7, 2025, authorizing community solar in PA. The PUC has until approximately April 2026 to finalize rules. The first projects are unlikely to be operational before late 2026 or early 2027. If you rent or cannot install rooftop solar, community solar will eventually be an option but is not available today.
PPL Electric has proposed shifting from 1:1 retail net metering to hourly LMP (Locational Marginal Pricing) credits, potentially around July 2026. LMP-based credits vary by hour and are typically lower than full retail rates, especially during midday solar peak hours. If you are a PPL customer considering solar, acting before this change takes effect locks in more favorable terms. PECO and Duquesne Light have not announced similar changes.
PA Energy Hub
All PA solar & heat pump guides
PA Solar Cost 2026
Pricing by city and utility
Solar Without the ITC
Is it still worth it in PA?
PA Net Metering Guide
How credits work in 2026
PA SREC Guide
How to earn and sell SRECs
Buy vs Lease vs PPA
Best financing for PA
PECO vs PPL vs Duquesne
Utility rate comparison
PA Community Solar
HB 1155 status and timeline
PA Commercial Solar
Section 48 for businesses
Solar + Heat Pump Bundle
Electrification strategy
PA Solar Tax Impact
Property & sales tax analysis
Solar Lease & PPA
TPO options in 2026
Section 48 Guide
How commercial ITC helps you
Philadelphia Solar
PECO territory pricing
Pittsburgh Solar
Duquesne territory pricing
Allentown Solar
PPL territory pricing
Lancaster Solar
PPL territory pricing
Get a Quote
Free PA solar quote in 2 minutes
PA's incentives are thin, but the math still works for many homeowners. Get a free, no-pressure solar quote from NuWatt Energy. We will show you the honest numbers — no phantom tax credits, no inflated SREC projections, no hidden property tax surprises.
Section 48 lease/PPA deadline: July 4, 2026. PPL net metering changes possible mid-2026.