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Pennsylvania Incentives the key to Going Solar in the Keystone State
Pennsylvania has always been an energy state. It was the first state to have an oil boom and was a steel state early on. It may be evolving into a renewable energy state a little slower than its mid-Atlantic neighbors but it’s starting to transition, offering some incentives to its homeowners and businesses to go solar. Here we’ll explore the benefits of solar energy in the Keystone State as well as incentives and rebates that are available to businesses and homeowners to help them transition to renewable energy.
Solar Energy Trends in Pennsylvania
At $0.1801 per kilowatt hour Pennsylvania has slightly higher residential electricity costs than the national average of $0.1545 per kWh. This makes installing solar panels a great option for homeowners to reduce energy costs in the state.
State Incentives and Rebates for Homeowners
Pennsylvania and local governments and utilities provide several incentives and rebates for homeowners to install solar on their property. The incentives help increase the affordability of solar and make it accessible to more people in the state. These are some of the main incentives:
Philadelphia Solar Rebate Program
The Philadelphia Solar Rebate Program offers an incentive of $0.20 per watt for homeowners who install PV systems in Philadelphia. Under the program a 6 kW home solar system can qualify for a $1,200 rebate. After the solar installation and the utility, PECO, grants permission to operate, the city will grant this one-time incentive payment.
Homeowners Energy Efficiency Loan Program (HEELP)
This is a state incentive for Pennsylvania’s lower income homeowners designed to help with energy-efficiency modifications. For those that qualify, it offers loans between $1,000 and $10,000 that have a 1% interest rate over a ten-year period. Prepayment of loans by borrowers is permitted and does not result in fines.
The amount of people in the family and in the house determine the income restrictions for HEELP participation. These annual caps generally vary from $53,450 for a single person to $100,800 for a household of 8 people.
Pennsylvania Net Metering
The Pennsylvania Public Utilities Commission has a rule allowing a generous net energy metering program in the Keystone State. Residential solar systems up to 50 kW in size can access Net metering in Pennsylvania. Wind and biomass energy systems are also allowed to net-meter in Pennsylvania.
Under the program, our solar panels produce any excess energy credited at the full retail rate toward your energy bill in future months. You can carry over any excess credit to the following month. If you have excess net-metered energy credits after a year it’s reconciled at what the state calls the “price-to-compare” rate.
Federal Solar Investment Tax Credit
A major incentive available to Pennsylvanians (and all Americans) who buy solar systems is the Solar Investment Tax Credit (ITC). Installing a solar panel system allows homeowners a 30% federal income tax deduction on the project’s total cost. The year that you install your solar system, you can claim the credit. If the credit amount isn’t fully utilized, the remaining amount can be carried forward for a maximum of 5 years.
State Incentives and Rebates for Businesses in Pennsylvania
Pennsylvania provides businesses with assistance in paying for solar energy projects through various incentive programs. Whether you run a large company or a small local business, there are incentives available to help you offset the cost of installing solar. The following are some of the main incentives for businesses:
Green Loan Program:
The Pennsylvania Energy Development Authority (PEDA) offers grants to businesses for the development and implementation of renewable energy projects, including solar installations. These grants provide businesses with financial assistance to offset the costs of solar equipment and installation, helping them achieve their sustainability goals while reducing operating expenses.
Net Metering:
Pennsylvania’s net metering policy allows businesses to receive credits on their electricity bills for any excess solar energy they generate and feed back into the grid. This arrangement enables businesses to offset their solar investments and achieve a better return on investment. Under the program in the Keystone State organizations and businesses can net-meter a renewable energy system producing up to 5 megawatts.
Alternative Energy Portfolio Standard (AEPS) Solar Carve-Out:
By 2021, all utilities serving retail electric customers in Pennsylvania must meet the state’s Alternative Energy Portfolio Standard, established by S.B. 1030 on November 30, 2004. Under that law, they must provide approximately 18% of their electricity through alternative energy resources, with roughly 8% coming from Tier I and 10% from Tier II technologies. Solar is a Tier I resource.
To meet those requirements utilities must acquire solar alternative energy credits (SAEC). These are produced when a solar installation produces one megawatt-hour (MWh) of electricity. An SAEC is also known as a solar renewable energy certificate or “SREC” in many other states. To comply with legal requirements, electricity providers must either acquire SAECs or make up any shortages in SAEC purchases with a Solar Alternative Compliance Payment.
Let's talk
If you’re interested in learning more about solar installation services and incentives in Pennsylvania, reach out to your local solar installers at SolarSME. SolarSME is a leading provider of solar energy solutions, specializing in residential, commercial, and industrial solar installations.
