Pennsylvania Solar Incentive Programs
Key Incentives at a Glance
Pennsylvania's incentive landscape changed materially in 2026. The federal ITC is gone for homeowners; state and utility programs carry the load.
Net Metering
Investor-owned utilities (PECO, PPL, Met-Ed, Penn Power, Duquesne Light) must credit exported solar at the full retail rate monthly. Annual surplus is settled at the lower price-to-compare rate. Residential cap: 50 kW.
Alternative Energy Credits (AECs)
Pennsylvania's AEPS Tier I requires 0.5% solar (EY 2026). Residential systems generate one AEC per MWh produced. Credits trade on the open market. An 8 kW system generates roughly 8 to 10 AECs/year (~$160 to $400 annually).
PECO Solar Rebate
PECO customers may receive a one-time rebate on qualifying residential solar installations. Check PECO's current program portal for availability, rebate budgets are limited and may be exhausted in a given year.
HEELP Loan Program
The Home Energy Efficiency Loan Program offers 1% interest financing up to $10,000 for qualifying energy improvements including solar. Available through participating lenders for income-qualifying homeowners.
Sales Tax on Solar
Pennsylvania does not exempt solar equipment and installation from the state's 6% sales tax. Combined with local rates, effective tax can reach 7 to 8% in some counties. This adds $900 to $1,500+ to a typical 8 kW system.
Property Tax
Pennsylvania does not exempt solar additions from property assessment. A system that adds value to your home will increase your property tax bill. Factor this into long-term ROI calculations.
Net Metering, Full Rules
Pennsylvania's net metering policy is set by the PUC and applies to investor-owned utilities statewide.
| Parameter | Rule |
|---|---|
| Eligible utilities | PECO, PPL Electric, Met-Ed, Penn Power, Duquesne Light (all IOUs). Municipal utilities and rural electric cooperatives are not required to offer net metering. |
| Residential system cap | 50 kW, covers the vast majority of home installations (typical systems are 6 to 12 kW). |
| Non-residential cap | 3 MW (megawatts) for commercial and industrial customers. |
| Monthly credit rate | Yes Full retail rate, your meter runs backward when you export. |
| Annual true-up | Annual surplus (credits unused at year-end) are settled at the price-to-compare rate, the generation and transmission component only, excluding distribution. This is meaningfully lower than full retail. |
| Interconnection timeline | Utilities must process standard residential applications within 20 business days. |
| Aggregate capacity limit | PUC eliminated the aggregate cap, no utility-wide cap restricts residential enrollment. |
| Credit rollover | Monthly credits roll forward indefinitely until the annual reconciliation. |
Alternative Energy Credits (AECs)
Pennsylvania's version of SRECs, generated for every megawatt-hour your system produces.
| AEC Detail | Current Status |
|---|---|
| Credit unit | 1 AEC = 1 MWh of solar generation |
| Market price (2025 to 2026) | Approximately $20 to 40 per AEC (market fluctuates; thin market) |
| Annual credits (8 kW system) | ~8 to 10 AECs/year → ~$160 to $400/year at current prices |
| Geographic eligibility | Solar systems generally must be located in Pennsylvania to earn PA solar AECs. Act 40 of 2017 restricted out-of-state solar eligibility. |
| Registration | Systems must register with PJM-EIS GATS (Generation Attribute Tracking System) to mint and sell AECs. |
| Contract options | Spot sales or multi-year contracts with aggregators, aggregators typically pay slightly below spot but offer price certainty. |
| AEPS compliance cost | Tier I carve-out: 0.5% (EY 2026) of 8.0% total Tier I. Source: pennaeps.com (program administrator) |
Pennsylvania Savings Estimator (2026)
Estimates only. Based on avg PA retail rate ~$0.13/kWh, 1,300 kWh/kW/yr production, AEC at $30/credit mid-range. No federal ITC included.
Major Utilities & Service Territories
Net metering is mandatory for all investor-owned utilities in Pennsylvania.
Honest Assessment: Is Solar Worth It in PA Right Now?
The incentive environment changed significantly in 2026. Here's what to weigh.
Working in your favor
Retail-rate net metering (one of the better policies in the Mid-Atlantic)
Active AEC market, ongoing passive income from credits
No aggregate cap, no waitlist for net metering
20-day interconnection timeline, faster than many states
Long-term electricity rates in PA have trended upward, solar hedges against rate increases
Headwinds to factor in
No federal residential ITC after Dec 31, 2025, this was 30% of system cost
No sales tax exemption, 6% adds $900 to $1,500 to a typical system
No property tax exemption, solar adds to assessed value
AEC market is thin and prices volatile ($20 to 40 range)
Annual surplus credits settle at below-retail price-to-compare rate
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