Pennsylvania homeowners can stack the SREC-II program, net metering, and a full sales tax exemption on solar equipment. Note: the 30% federal ITC expired December 31, 2025. Here's the complete 2026 guide to going solar in the Keystone State.
Pennsylvania may not have a state solar tax credit, but it has a powerful combination of incentives that make going solar financially compelling: the SREC-II program (which pays you for every megawatt-hour your system produces), full net metering, and a complete sales tax exemption on solar equipment. Note: the 30% federal Investment Tax Credit expired December 31, 2025. With electricity rates averaging $0.14–$0.16/kWh and rising, Pennsylvania homeowners are increasingly turning to solar to lock in their energy costs.
This guide covers every incentive available to Pennsylvania homeowners in 2026 and how to maximize your savings.
Pennsylvania Solar Incentives Overview
| Incentive | Value | Type |
|---|---|---|
| Federal Investment Tax Credit | Expired Dec 31, 2025 — no longer available for 2026 purchases | — |
| SREC-II Program | Market-based per MWh | Ongoing income |
| Net Metering | Full retail rate credits | Utility credit |
| Sales Tax Exemption | Full exemption | State sales tax |
| Property Tax Exemption | Varies by municipality | Local tax exemption |
Federal Solar Tax Credit — 2026 Update
The 30% federal residential solar tax credit (Section 25D) expired December 31, 2025. Homeowners purchasing systems in 2026 no longer qualify. Solar leases and PPAs are the exception — the installer can claim commercial credits and pass savings through in the monthly rate.
Pennsylvania's SREC-II program, net metering, and sales tax exemption are now the primary financial drivers for 2026 buyers.
SREC-II Program (Solar Renewable Energy Certificates)
Pennsylvania's SREC-II program is one of the most valuable ongoing income streams available to PA solar homeowners. For every 1,000 kWh (1 MWh) your system produces, you earn one SREC-II certificate that can be sold on the open market.
Current SREC-II prices in Pennsylvania range from $35–$55 per certificate (check srectrade.com or srecs.com for current market prices). A typical 8 kW system in Pennsylvania produces approximately 9,000–10,000 kWh per year, generating 9–10 SRECs annually worth $315–$550/year.
Over 15 years, that is $4,725–$8,250 in SREC income on top of your electricity bill savings. Unlike New Jersey's SREC program, Pennsylvania's SREC-II prices are lower but the program is still active and enrolling new systems.
How to enroll: Your solar installer typically handles SREC registration with PJM-GATS (the regional tracking system). You then sell certificates through an aggregator or directly on the market.
Net Metering in Pennsylvania
Pennsylvania requires all electric distribution companies (EDCs) to offer net metering to residential solar customers. You receive full retail rate credits for excess electricity sent to the grid, which offset future bills. Credits roll over month-to-month indefinitely.
PPL Electric, PECO, Met-Ed, Penelec, Penn Power, and West Penn Power all participate. Systems up to 50 kW qualify for residential net metering.
Sales Tax Exemption
Pennsylvania exempts residential solar energy systems from the state's 6% sales tax. On a $20,000 system, this saves $1,200 upfront — a meaningful reduction that is often overlooked.
Property Tax Exemption
Pennsylvania does not have a statewide property tax exemption for solar, but some municipalities and school districts have adopted local exemptions. Check with your local assessor to see if your jurisdiction participates.
How to Stack Pennsylvania Solar Incentives
Here is what the math looks like for a typical $20,000 residential solar installation in Pennsylvania:
| Incentive | Amount |
|---|---|
| Gross system cost | $20,000 |
| Sales tax exemption (6%) | −$1,200 |
| Federal ITC (30%) | Expired Dec 31, 2025 — not applicable for 2026 purchases |
| Net out-of-pocket cost | $13,160 |
| SREC-II income over 15 years (est.) | −$5,000–$8,000 |
| Effective 15-year cost | $5,160–$8,160 |
With electricity savings of $1,000–$1,400/year, most Pennsylvania homeowners see full payback in 10–14 years.
Pennsylvania Solar FAQ
Does Pennsylvania have a state solar tax credit?
No. Pennsylvania does not have a state income tax credit for solar installations. The primary financial incentives are the SREC-II program, net metering, and the sales tax exemption. Note: the 30% federal ITC expired December 31, 2025.
What is the SREC-II program in Pennsylvania?
The SREC-II (Solar Renewable Energy Certificate) program pays Pennsylvania solar homeowners for every megawatt-hour their system produces. Each certificate is sold on the open market, currently worth $35–$55. A typical 8 kW system earns 9–10 SRECs per year.
Does Pennsylvania have net metering?
Yes. All major Pennsylvania utilities are required to offer net metering at the full retail rate for residential solar systems up to 50 kW. Credits roll over month-to-month indefinitely.
Is solar worth it in Pennsylvania?
Yes — especially with the SREC-II program providing ongoing income on top of bill savings. Pennsylvania's electricity rates are moderate but rising, and the combination of SRECs and net metering delivers payback periods of 8–12 years with 25+ years of savings. Note: the 30% federal ITC expired December 31, 2025.
How much does solar cost in Pennsylvania after incentives?
The average residential solar system in Pennsylvania costs $16,000–$24,000 before incentives. After the sales tax exemption, the net cost is typically $15,000–$22,000. SREC income over 15 years reduces the effective cost further. Note: the 30% federal ITC expired December 31, 2025.
Use our free solar savings calculator to see what these incentives mean for your specific home and energy usage.
