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Philadelphia has the best solar irradiance in Pennsylvania with ~1,500 peak sun hours per year. PECO rates at $0.21/kWh drive strong net metering savings, and SRECs add ~$385/year in additional income. No federal ITC for homeowners in 2026.
Cost Range
$2.8-$3.2
Per watt installed
Avg System
11 kW
~$33,000 gross
Payback
12.2 yrs
Cash purchase
PECO Rate
$0.21
Per kWh
2026 Reality: The 30% federal solar tax credit (25D) expired for homeowners on Dec 31, 2025. All Philadelphia costs and payback in this guide reflect $0 federal credit. Third-party PPA/lease providers can still claim the commercial ITC (Section 48) until July 2026. What this means for you
A typical 11 kW solar system in Philadelphia costs $33,000 before taxes. Add 6% PA sales tax ($1,980) for an all-in cost of $34,980. Annual SREC income of $385/year plus PECO net metering savings of $2,888/year deliver a payback of approximately 12.2 years.
Gross Cost (11 kW)
$33,000
~$3.00/W avg
6% Sales Tax
+$1,980
No exemption in PA
All-In Cost
$34,980
Cash purchase
SREC Income/yr
$385
13.8 SRECs @ $28
Philadelphia homes typically need 8-14 kW systems depending on energy usage. Costs below use the $3.00/W average for the Philadelphia market and include the 6% PA sales tax.
| System Size | Gross Cost | +6% Tax | All-In Cost | SREC/yr | Payback |
|---|---|---|---|---|---|
| 6 kW | $18,000 | +$1,080 | $19,080 | $210 | 12.2 yrs |
| 8 kW | $24,000 | +$1,440 | $25,440 | $280 | 12.2 yrs |
| 10 kW | $30,000 | +$1,800 | $31,800 | $350 | 12.2 yrs |
| 11 kW | $33,000 | +$1,980 | $34,980 | $385 | 12.2 yrs |
| 14 kW | $42,000 | +$2,520 | $44,520 | $490 | 12.2 yrs |
PA is uniquely expensive for solar taxes: The 6% sales tax adds $1,980 to a typical system, and solar increases your property tax assessment by an estimated $450/year. Neighboring NJ and MA both exempt solar from sales and property taxes.
All of Philadelphia is served by PECO Energy, the largest utility in southeast PA. PECO offers strong net metering with no proposed changes, making Philly the safest market in PA for solar investment.
Monthly credits
1:1 full retail rate ($0.21/kWh)
Annual true-up
Excess paid at PTC rate ($0.11/kWh)
Max system size
50 kW residential
Policy threat
None for PECO (PPL has proposed changes)
Competitive choice
PA is deregulated; you can shop supply rate
Interconnection time
3-5 weeks typical
Highest electric rate in PA at $0.21/kWh (PECO) drives the biggest net metering savings
Best irradiance in PA: eastern PA gets 1,250 kWh/kW/year vs 1,050 in Pittsburgh
No net metering policy threat (unlike PPL territory with proposed July 2026 changes)
Largest installer market in PA keeps pricing competitive through strong competition
Philadelphia Energy Authority provides educational resources and workforce training
Highest SREC production in PA due to superior sun exposure
PA has the weakest incentive environment in the Northeast. Here is exactly what Philadelphia homeowners get and what they do not.
PA SRECs
13.8 SRECs/yr at $28/SREC avg. Market-based, traded on PJM-GATS.
1:1 Net Metering (PECO)
Full retail credit monthly. Annual true-up at PTC rate ($0.11/kWh). Stable PECO policy.
Section 48 ITC (PPA/Lease only)
Third-party system owner claims ITC and passes savings as lower PPA/lease rate. Deadline July 4, 2026.
Federal 25D ITC (Homeowner)
Expired Dec 31, 2025. $0 for cash or loan purchases. This is the single biggest change from 2025.
PA State Tax Credit
Pennsylvania offers no state-level solar tax credit. Unlike MA ($1,000 credit) or NJ (SREC-II/ADI).
Sales Tax Exemption
PA charges 6% sales tax on solar equipment. NJ, MA, RI, and NH all exempt solar from sales tax.
Property Tax Exemption
PA has NO property tax exemption. Solar adds to assessed value and increases your tax bill annually.
Pennsylvania is the only state in the Northeast that hits solar with both sales tax AND increased property taxes. This is factored into all our payback calculations.
Solar adds to your assessed value. At Philadelphia's effective property tax rate (~1.36%), a $33,000 system adds approximately:
Note: Some Philadelphia boroughs may assess solar at a different rate. Check with the Philadelphia Office of Property Assessment.
Philadelphia neighborhoods range from dense row houses to suburban single-family homes. Each has different solar potential, roof types, and permitting considerations.
Row houses, tight footprints
Row houses with flat or low-slope roofs are ideal for flush-mount solar panels
Shared walls mean no side shading between buildings
Typical 1,000-1,200 sq ft roofs can fit 5-8 kW systems
High energy usage (older homes, window AC) drives faster payback
Standard permitting, no historic restrictions in most areas
Typical System
5-8 kW
Cost Range
$15,000-$25,600
Permitting
Standard L&I permit, 3-5 weeks
Victorian homes, larger lots
Larger single-family homes with ample south-facing roof area
Mature tree canopy in Mount Airy can create shading issues on some properties
Germantown historic district portions require additional permitting review
Older homes frequently need 200-amp electrical panel upgrades
Suburban-style lots provide good sun exposure on most streets
Typical System
8-12 kW
Cost Range
$24,000-$38,400
Permitting
Standard L&I; historic areas add 4-6 weeks
Single-family homes, suburban character
Large lots and spacious roofs can accommodate 10-14 kW systems
Best sun exposure in the Philadelphia area due to lower density
Higher property values mean the lack of property tax exemption costs more here
Wissahickon Valley tree coverage may shade some parcels
Highest residential solar adoption rate in the Philadelphia metro area
Typical System
10-14 kW
Cost Range
$30,000-$44,800
Permitting
Standard L&I permit, 3-5 weeks
Historic brownstones, condos, mixed-use
Philadelphia Historical Commission (PHC) review required in designated historic districts
Panels not visible from the public right-of-way are typically approved
Flat-roof commercial/residential buildings work well for flush-mount arrays
Condo associations must approve shared-roof installations
Community solar (when available) is an alternative for restricted buildings
Typical System
4-8 kW
Cost Range
$12,000-$25,600
Permitting
L&I permit + PHC review in historic districts (add 4-8 weeks)
Post-war single-family, semi-detached
Post-war homes (1940s-1970s) with simple roof geometries are excellent solar candidates
Large stock of semi-detached homes with adequate south-facing exposure
Minimal tree coverage compared to Northwest Philly neighborhoods
Largest per-capita residential electricity usage in the city
No historic restrictions anywhere in the Northeast
Typical System
8-12 kW
Cost Range
$24,000-$38,400
Permitting
Standard L&I permit, 3-5 weeks
Victorian row houses, student housing, mixed-use
Victorian row houses have large flat roofs suitable for solar arrays
University City properties near Penn and Drexel have high rental demand making PPA attractive
Some multi-family properties along Baltimore Ave and Lancaster Ave are ideal candidates
Older electrical infrastructure in some blocks may require panel upgrades
Philadelphia Energy Authority has historically targeted West Philly for Solarize campaigns
Typical System
6-10 kW
Cost Range
$18,000-$32,000
Permitting
Standard L&I permit, 3-5 weeks
The Philadelphia Energy Authority (PEA) has been a key driver of residential solar adoption in the city. While the Solarize Philly program is no longer active, its legacy continues.
Solarize Philly ran 2017-2023, installing solar on thousands of Philadelphia rooftops through group purchasing
The program lowered costs by 20-30% through bulk procurement and pre-negotiated installer contracts
While the group purchasing program is concluded, many of the installers remain active in the Philly market
PEA now focuses on the Philadelphia Energy Campaign for building efficiency and workforce development
The competitive installer market that Solarize Philly helped create continues to benefit Philly homeowners
Philadelphia EAP (Energy Authority Programs) has historically supported combined solar + heat pump installations
Bundling solar with a heat pump maximizes your PECO bill offset and reduces payback period
HEAR rebates (up to $8,000 income-qualified) are still pending DOE approval for PA
When HEAR launches, Philly homeowners bundling solar + heat pump will see the fastest payback in the state
Electrification of heating is especially valuable at PECO rates when paired with solar self-consumption
Gross system cost
$33,000
6% PA sales tax
+$1,980
Total all-in cost
$34,980
Net metering savings/yr
$2,888
SREC income/yr
$385
Property tax increase/yr
-$450
Payback Period
~12.2 years
25-Year Net Savings
$50,887
Upfront cost
$0
Section 48 ITC
30% claimed by financing company
Typical savings vs PECO
20-40% lower per-kWh rate
SREC income
Kept by third-party (reflected in lower rate)
Contract term
20-25 years typical
Monthly benefit
~$240/mo savings
Post-ITC shift: PPA and lease are now the most attractive option for many Philadelphia homeowners. You pay nothing upfront, the financing company captures the 30% Section 48 ITC, and the savings are passed through as a lower electricity rate. This is more valuable in PA since homeowners get zero federal benefit on cash or loan purchases.
The death of the 25D ITC has fundamentally changed which financing path is optimal in PA. PPA and lease are now more attractive because the third-party company still gets the ITC.
Best for: Homeowners who can afford upfront cost and want maximum long-term savings
Best for: Homeowners who want ownership benefits without large upfront payment
Best for: Most PA homeowners in 2026 — MORE attractive post-ITC because the financing company claims the 30% Section 48 ITC and passes savings as a lower rate
Best for: Homeowners who want predictable monthly costs with no maintenance responsibility
Solar panels in Philadelphia cost $2.80-$3.20 per watt installed, with an average of about $3.00/W. For a typical 11 kW system, the total cost is approximately $33,000 before the 6% PA sales tax ($1,980), bringing the all-in cost to about $34,980. There is no federal tax credit for homeowners in 2026 (Section 25D expired December 31, 2025), no PA state tax credit, and no property tax exemption.
Philadelphia solar systems have an approximate 9-10 year payback period for cash purchases. This is driven by PECO rates at $0.21/kWh, 1:1 net metering, and SREC income of $280-380 per year. The payback is longer than neighboring NJ and MA because PA has no state rebate, no sales tax exemption, no property tax exemption, and the residential federal ITC has expired.
All of Philadelphia is served by PECO Energy, which has the highest retail rate among PA utilities at $0.21/kWh. PECO offers 1:1 full retail net metering for systems up to 50 kW. Excess credits at the annual true-up are paid at the Price-to-Compare (PTC) rate of about $0.11/kWh. PECO has no proposed changes to its net metering policy, unlike PPL.
Philadelphia does not currently have active local solar incentives. The Philadelphia Energy Authority (PEA) previously ran the Solarize Philly program which offered group purchasing discounts, but that program has concluded. PEA now focuses on the Philadelphia Energy Campaign and workforce development. The best available incentives are PA SRECs ($22-$35 per MWh) and 1:1 net metering through PECO.
Absolutely. Philadelphia row houses are among the best candidates for solar in the region. Flat or low-slope roofs are ideal for flush-mount panels, shared walls eliminate side shading, and the compact roof area fits 5-8 kW systems efficiently. South-facing row houses get the best production, but east and west-facing roofs still generate 80-85% of optimal output.
PA SRECs (Solar Renewable Energy Credits) are earned based on your system production: 1 SREC per 1 MWh generated. A typical 11 kW system in Philadelphia produces about 13.75 SRECs per year. At current market prices of $22-$35 per SREC, that is $300-$480 in annual income. SRECs are traded on PJM-GATS and can be sold through platforms like SRECTrade or Flett Exchange. Each SREC has a 3-year useful life.
Yes. Unlike NJ, MA, RI, and NH, Pennsylvania has NO property tax exemption for solar installations. Solar panels add to your assessed property value and increase your property tax bill. For a $33,000 system in Philadelphia, this could mean an additional $400-$500 per year in property taxes at the city effective rate. This is factored into our payback calculations.
In 2026, PPA and lease are significantly more attractive in PA than they were before. Since homeowners get $0 federal tax credit on cash or loan purchases (Section 25D expired), but the third-party PPA/lease company can still claim the 30% Section 48 commercial ITC (until July 2026), those savings are passed through as a lower per-kWh rate. A PPA typically saves 20-40% on your PECO bill with $0 upfront cost.
The PRESS Act (PA Renewable Energy Standard Strengthening) is pending legislation that would raise the state solar carve-out from 0.5% to 5.5%. If passed, this would dramatically increase SREC demand and prices, potentially boosting annual SREC income from $300-$480 to $1,000+ for a typical Philadelphia system. The legislation is still pending and not guaranteed to pass.
We will assess your specific roof, neighborhood, PECO rate, and SREC potential to show you exactly what solar costs and saves for your Philadelphia home.
Statewide costs, incentives, SRECs, and payback for all PA homeowners.
Read moreHow SRECs work, current market prices, PJM-GATS registration, and the PRESS Act.
Read more1:1 retail credit, annual PTC true-up, and PPL proposed tariff changes.
Read moreWhy PA solar still works in 2026 without the 25D ITC. PPA/lease options.
Read moreCompare financing paths with no federal credit. PPA is now more attractive.
Read more6% sales tax, no property tax exemption, and how to factor taxes into your payback.
Read morePricing: EnergySage Solar Marketplace (January 2026), NuWatt Energy PA installations.
Utility rates: PECO Energy R-1 residential tariff schedule, effective January 2026.
SREC data: SRECTrade, Flett Exchange, PJM-GATS (February 2026).
Net metering: PA PUC Act 213/Act 35 guidelines.
Tax data: PA Department of Revenue, Philadelphia Office of Property Assessment.
Philadelphia Energy Authority: PEA annual reports and program documentation.