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The 30% residential ITC is gone. PA homeowners now face the full $41,415 cost for a 12.81 kW system. But SRECs, 1:1 net metering, and PPA/lease deals still make solar work with a ~13-year payback.
Gross Cost
$41K
incl. 6% tax
Federal ITC
$0
expired 12/31/25
Annual Savings
$3,570
NM + SRECs
Payback
~13 yrs
cash purchase
The One Big Beautiful Bill Act (OBBBA), signed July 4, 2025, eliminated Section 25D effective December 31, 2025. This was the 30% residential solar investment tax credit.
The ITC loss adds ~$11,721 to your net cost
That's approximately 3 more years of payback. PA is harder hit than NJ or MA because PA also lacks sales tax exemption ($+2,344) and property tax exemption (+$450/yr ongoing).
PA's remaining value drivers add up. Net metering alone saves over $2,400/year. Combined with SRECs and PPA/lease deals, solar delivers solid long-term returns.
Your solar production offsets your electric bill at the full retail rate (up to $0.21/kWh in PECO territory). A 12.81 kW system saves approximately $3,122/year in avoided electricity costs. This is the single largest value driver for PA solar.
PA SRECs trade at $22-$35/MWh. A 12.81 kW system generates ~16 SRECs/year, earning approximately $448/year. Modest income that adds up — about $10,561 over 25 years.
Third-party PPA/lease providers claim the 30% Section 48/48E ITC and pass savings as 20-40% lower rates. $0 upfront. In PA, this is MORE attractive post-ITC because homeowners get zero federal benefit on cash purchases. Monthly savings of ~$80.
PA electricity rates have risen ~3% annually. Each year, solar savings increase as utility rates climb. Over 25 years, this compounding effect is significant — today's $2,400/year savings becomes $4,300+ in year 25 at 3% annual escalation.
Combined Annual Benefit (Cash Purchase)
~$3,570/year
Net metering + SREC income (PECO territory, 12.81 kW system)
With $0 federal benefit on cash purchases, the PPA/lease model has become more compelling. The third-party owner claims the 30% Section 48/48E ITC and passes savings through as a lower rate.
No out-of-pocket cost. No 6% sales tax. No property tax increase (you don't own the system).
The financing company claims the 30% Section 48 ITC and passes through savings as a lower per-kWh rate. Estimated ~$80/month savings.
Section 48/48E requires projects to begin construction before July 4, 2026. After that, PPA/lease terms will be less favorable.
PA-specific advantage: In states with sales tax exemptions and property tax exemptions, cash ownership is more attractive. In PA, which has neither, PPA/lease avoids both the $2,300+ sales tax and $450/year property tax increase since the third party owns the system.
Each financing option has different payback characteristics in the post-ITC world.
| Metric | Cash | Loan (7% APR) | PPA/Lease |
|---|---|---|---|
| Upfront cost | $41,415 | $0 (financed) | $0 |
| Federal credit | $0 | $0 | 30% (to owner) |
| Payback period | ~13 years | ~15 years | Day 1 savings |
| 25-year savings | $53,573 | ~$34,822 | $24,019 |
| SREC income | You keep 100% | You keep 100% | Owner keeps |
| PA sales tax | $2,344 | $2,344 | $0 (not your purchase) |
July 4, 2025
Section 25D residential solar ITC scheduled to expire at end of 2025.
December 31, 2025
Last day to qualify for the 30% residential solar tax credit. $0 available for homeowner purchases after this date.
July 4, 2026
Last day for commercial/third-party projects to begin construction and qualify for 30% ITC. Affects PPA/lease availability.
July 2026 (proposed)
PPL proposed shift to hourly LMP-based credits could reduce net metering value for Lehigh Valley, Harrisburg, and Scranton areas.
TBD (pending)
Would raise solar carve-out from 0.5% to 5.5%, boosting SREC values significantly for all PA solar owners.
Timing matters more in PA than most states due to pending policy changes.
Risk: Every month you wait, you lose ~$298 in solar savings and face increasing risk of net metering changes.
See exactly what solar costs and saves based on your utility, system size, and financing type.
Estimate your solar return on investment with SREC income, net metering credits, and PA-specific costs.
Federal Residential Solar Tax Credit (Section 25D) Expired
Homeowners who purchase solar with cash or a loan receive $0 in federal tax credits. Section 25D expired December 31, 2025.
Greater Philadelphia / Southeast PA
Electric Rate
$0.18/kWh
Net Metering
1:1 retail credit
SREC Value
~$28/SREC
Interconnection
4-8 weeks
~12 SRECs/yr at ~$28/SREC
Payback Period
12.7
years
25-Year Savings
$48,511
total
Monthly Benefit
$208
per month
Estimates based on average 2026 PA solar pricing at $3.00/W, SREC spot ~$28/SREC, 1:1 retail net metering, 6% PA sales tax (applies to solar), NO PA state rebate, NO property tax exemption. Section 25D residential ITC expired Dec 31, 2025 -- $0 federal tax credit for cash/loan purchases.
Yes, but the economics are tighter. Without the 30% ITC, your net cost for a 12.81 kW system is approximately $41,415 (including 6% PA sales tax). With net metering saving ~$3,122/year and SRECs earning ~$448/year, payback is approximately 13 years. Solar PPA/lease offers $0-down savings with the financing company claiming the Section 48 ITC.
The One Big Beautiful Bill Act (OBBBA), signed by President Trump on July 4, 2025, eliminated Section 25D, the residential clean energy credit. This was the 30% tax credit that homeowners could claim on solar purchases. The credit expired on December 31, 2025. There are no plans to reinstate it.
Not for cash or loan purchases. However, if you use a solar PPA or lease, the third-party financing company can claim the 30% Section 48/48E commercial ITC on projects that begin construction before July 4, 2026. The benefit is passed to you as a lower electricity rate, typically 20-40% below your current utility bill.
A typical 12.81 kW system costs $39,071 at $3.05/W, plus $2,344 in PA sales tax (6%), for a total of $41,415. PA also has no property tax exemption, so solar adds ~$450/year to property taxes. With the old 30% ITC, the net cost was only ~$29,694.
PA has several disadvantages: 6% sales tax on solar (NJ and MA exempt), no property tax exemption (NJ and MA exempt), weak SRECs ($22-35 vs NJ's $85.90/SREC-II), and no state rebate. The upside is PA's 1:1 net metering, competitive supply choice, and lower installation costs in some areas.
Waiting is risky. PPL is proposing net metering changes for July 2026 that could reduce credits by 40-60%. Section 48 PPA/lease deals expire July 4, 2026. SREC prices are already low and unlikely to improve without the PRESS Act. If you're in PPL territory, acting before July 2026 is strongly recommended.
PA SRECs add approximately $448/year to your solar income (about $10,561 over 25 years). While this doesn't replace the ~$11,721 you would have received from the ITC, it does contribute to a faster payback. If the PRESS Act passes and raises the solar carve-out to 5.5%, SREC values could increase substantially.
For many PA homeowners, yes. A PPA requires $0 upfront, the financing company claims the 30% Section 48 ITC, and you get 20-40% savings on your electric bill from day one. You don't own the system or earn SRECs, but with zero federal benefit on cash purchases, the PPA's immediate savings are compelling. Act before the July 4, 2026 Section 48 deadline.
No tax credit does not mean no value. See what solar saves you based on your roof, utility, and preferred financing.