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PA offers 1:1 full retail rate net metering credits monthly, with PTC true-up at the annual reset. Understanding the difference between retail credits and PTC payout is critical for optimal system sizing. PPL customers face proposed tariff changes around July 2026.
Credit Rate
1:1 Retail
monthly credits
True-Up Rate
PTC Only
$0.10-$0.13/kWh
Res. Cap
50 kW
max system size
Annual Savings
~$3,122
12.81 kW / PECO
PA's net metering policy (under Act 213/Act 35) provides full retail rate credits for excess solar generation. Here's how the two-tier system works.
Excess generation credits at full retail rate, rolling month to month
At 12-month true-up, net excess paid at Price-to-Compare (PTC) rate — supply-only, much lower than full retail
Why the PTC/Retail Difference Matters
The gap between retail rate ($0.17-$0.21/kWh) and PTC rate ($0.10-$0.13/kWh) means every kWh of annual excess loses 40-50% of its value. For a 12.81 kW system in PECO territory, the true-up at PTC rate is only ~$264/year compared to ~$3122 total annual credit. Optimal sizing means producing about 100-110% of your annual usage to minimize PTC payout and maximize retail-rate offsets.
PPL Electric Utilities has proposed moving from 1:1 retail net metering to hourly LMP-based credits. This would affect customers in the Lehigh Valley, Harrisburg, Scranton, and northeastern/central PA.
Expected Date
July 2026
Affected Customers
~550,000
PPL residential
Recommendation
Install Before Change
Grandfathering likely
Grandfathering: Systems installed before the tariff change is implemented may be grandfathered under current 1:1 rates. This is not guaranteed but has been the pattern in other states that have modified net metering. PPL territory customers should not delay their solar decision.
Your utility determines both your retail rate (monthly credit value) and PTC rate (annual true-up value). Higher retail rates mean more valuable net metering.
| Utility | Territory | Retail Rate | PTC Rate | Annual NM Value | True-Up Value | Threat |
|---|---|---|---|---|---|---|
| PECO Energy | Philadelphia and southeast PA (largest by residential customers) | $0.21 | $0.110 | $3,122/yr | $264/yr | Stable |
| PPL Electric Utilities | Lehigh Valley, Harrisburg, Scranton, northeastern/central PA | $0.21 | $0.130 | $2,917/yr | $287/yr | At risk |
| Duquesne Light | Pittsburgh and Allegheny County | $0.20 | $0.124 | $2,537/yr | $250/yr | Stable |
| Met-Ed (FirstEnergy) | Reading, York, Lancaster, south-central PA | $0.19 | $0.119 | $2,642/yr | $263/yr | Stable |
| Penelec (FirstEnergy) | Erie, State College, northeastern PA | $0.18 | $0.110 | $2,171/yr | $211/yr | Stable |
| Penn Power (FirstEnergy) | New Castle area, northwest PA | $0.19 | $0.119 | $2,412/yr | $240/yr | Stable |
| West Penn Power (FirstEnergy) | Greensburg, Johnstown, southwest PA | $0.17 | $0.103 | $2,151/yr | $208/yr | Stable |
All values based on a 12.81 kW system. Annual NM value includes both monthly retail offsets and PTC true-up. Actual values vary by consumption patterns.
PA is a competitive choice state. Customers can shop for supply rate, which affects the PTC true-up value.
PA lets you choose your electricity supply provider (generation) while keeping your distribution utility (PECO, PPL, etc.). You can shop for lower generation rates from dozens of licensed suppliers.
Monthly net metering credits apply at your full retail rate regardless of supply choice. However, the PTC rate used at the annual true-up is based on the utility's default service rate, not your competitive supply rate.
If you are on competitive supply, size your system to avoid excess at the annual true-up. The monthly 1:1 credits are most valuable. A higher retail rate means more valuable net metering, so switching to a lower supply rate after installing solar can actually reduce your credit value.
The PA residential cap is 50 kW. Optimal sizing means producing about 100-110% of your annual usage to minimize the PTC true-up penalty.
| Monthly Bill | Recommended Size | Annual kWh | Est. Cost (before tax) | Est. Cost (with 6% tax) |
|---|---|---|---|---|
| $100/mo | 4.6 kW | 5,714 | $13.6K - $14.5K | $14.4K - $15.4K |
| $150/mo | 6.9 kW | 8,571 | $20.4K - $21.7K | $21.6K - $23.0K |
| $200/mo | 9.1 kW | 11,429 | $26.8K - $28.7K | $28.5K - $30.4K |
| $250/mo | 11.4 kW | 14,286 | $33.6K - $35.9K | $35.6K - $38.1K |
| $300/mo | 13.7 kW | 17,143 | $40.4K - $43.2K | $42.8K - $45.7K |
Based on PECO territory ($0.21/kWh) and eastern PA production (1,250 kWh/kW/year). Actual sizing should be based on 12 months of utility bills.
PA allows virtual net metering for properties with multiple electric meters under the same account. This is valuable for farms, multi-building properties, and businesses.
PA net metering provides 1:1 full retail rate credits for excess solar production on a monthly basis. When your solar panels produce more electricity than you use, the excess is sent to the grid and you receive a credit at the full retail rate. Credits roll over month to month. At the annual 12-month true-up (typically in June), any remaining excess is paid out at the Price-to-Compare (PTC) rate, which is the supply-only portion of your bill and much lower than the full retail rate.
The PTC rate is the supply-only portion of your electricity bill. When your annual excess generation is cashed out at the 12-month true-up, you receive the PTC rate rather than the full retail rate. PTC rates range from $0.103/kWh (West Penn Power) to $0.13/kWh (PPL), compared to full retail rates of $0.17-$0.21/kWh. This means optimal system sizing to minimize annual excess is important.
For residential customers, PA allows net metering for systems up to 50 kW. Non-residential systems can be up to 3 MW. Your system should be sized to produce no more than about 100-110% of your annual electricity consumption to avoid excess paid at the lower PTC rate.
Yes. PPL Electric Utilities has proposed tariff changes expected around July 2026 that would replace 1:1 retail rate credits with hourly LMP (Locational Marginal Pricing) based credits. This would dramatically reduce the value of net metering for PPL customers in the Lehigh Valley, Harrisburg, and Scranton areas. Systems installed before the change may be grandfathered under current 1:1 rates.
Yes. PA is a competitive choice state, meaning you can choose your electricity supply provider while keeping your distribution utility. Net metering credits still apply regardless of your supply choice. However, the PTC rate used at the annual true-up is based on your utility's default service rate, not your competitive supply rate. Shopping for supply can affect the value of your true-up credits.
PA allows virtual net metering for multi-meter properties (like farms or businesses with multiple buildings on one property). This lets you allocate solar generation credits across multiple meters under the same account. True community solar virtual net metering is not yet available — HB 1155 was signed in April 2025 but the program is not yet operational.
A typical 12.81 kW system in PECO territory saves approximately $3,122/year through net metering credits. This includes monthly offsets at the full $0.21/kWh retail rate and the annual PTC true-up at $0.11/kWh. Net metering is the single largest source of solar savings in PA.
Net metering credits are tied to the meter, not the customer. If you sell your home with solar panels, the new owner inherits the net metering arrangement. Any accumulated credits at the time of sale are typically forfeited. Some utilities allow credit transfer as part of a property sale — check with your specific utility.
After your solar system is installed, the interconnection process typically takes 2-5 weeks depending on your utility. PECO takes 3-5 weeks, PPL and Duquesne Light 2-4 weeks, and FirstEnergy utilities (Met-Ed, Penelec, Penn Power, West Penn) take 2-3 weeks. Your installer handles the interconnection application.
If you are a PPL customer, installing solar before the proposed July 2026 tariff change is strongly recommended. Systems installed under the current 1:1 retail rate net metering policy may be grandfathered, protecting your investment. After the change, hourly LMP-based credits could reduce net metering value by 40-60%.
PPL customers: proposed tariff changes could reduce your net metering value by 40-60%. Installing now may grandfather you under the current 1:1 retail rate policy.