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How to Save Money on Solar Panels In Pennsylvania


This article provides a comprehensive, in-depth guide on how to maximize savings when going solar in Pennsylvania. With high electricity rates but lower solar resources than other states, PA homeowners can benefit from targeted strategies to reduce the costs of installing and operating solar panel systems. Whether you want to eliminate your electric bill or make solar pay for itself in the shortest timeframe, this guide covers all the best ways to save money on solar in Pennsylvania.

Leverage the Full Federal Solar Tax Credit Before It Declines

The federal investment tax credit (ITC) for solar provides the biggest savings opportunity across the U.S., including Pennsylvania. This tax credit currently offers a 26% deduction on all expenses for new solar systems, including panels, inverters, racking, wiring, installation labor, permitting fees, and more.

For example, on a typical 6 kW solar system costing $18,000 before incentives, the ITC would reduce your tax bill by $4,680 (26% of $18,000). For a larger 10 kW system at $30,000, you would save $7,800 off your taxes. These thousands in savings make solar far more affordable.

Importantly, the federal ITC is set to decrease to 22% for systems installed in 2023. And it drops further to 0% for residential projects in 2024. So Pennsylvania homeowners have a limited window to capitalize on the full 26% credit.

Acting before the end of 2022 will put the most money back in your pocket and provide the fastest payback on your solar investment. Consult local installers for quotes and financing options that allow you to complete your solar project within the year.

Maximize Savings by Owing More in Taxes

To benefit the most from the ITC, plan your install in a year when you expect to owe higher taxes. The credit directly reduces your tax bill, so the more tax liability the better.

For example, if you owed $5,000 in federal taxes, a $4,680 solar credit would reduce your bill to just $320 owed. But if you only owed $2,000 in tax, the credit would be capped at lowering your liability to $0.

Run the numbers with your tax professional to identify the best year for maximizing ITC savings. Options include:

  • Selling investments at a gain to incur higher capital gains tax
  • Doing a Roth IRA conversion which adds to taxable income
  • Claiming fewer deductions like charitable giving
  • Waiting for a year with higher business or W-2 income

Proactive tax planning paired with the federal solar credit can potentially save you thousands more.

Understand Net Metering in Pennsylvania for Ongoing Bill Savings

One of the most valuable solar policies in Pennsylvania is its net metering program. Net metering allows you to get full retail credit for excess solar electricity exported to the grid. This credit directly offsets your electricity usage charges.

For example, if your solar panels produce 1,000 kWh more than you use in a month, that excess kWh production gets banked as a monetary credit at the same retail per kWh rate you would have paid your utility.

At the end of each year, your utility cuts you a check to compensate for any accrued net metering credit balance. This provides a powerful financial incentive for generating surplus solar.

Pennsylvania also has no statewide cap on the amount of solar capacity eligible for net metering. And credits roll over month-to-month indefinitely. This gives your system maximum time to earn back your investment through utility bill savings.

Specific net metering policies can vary slightly by utility within Pennsylvania. But in general, you can count on this incentive to substantially boost the financial return from your solar panels for decades into the future.

Model Bill Savings and Payback Periods

When evaluating solar in Pennsylvania, be sure to calculate projected utility bill savings and system payback periods taking full advantage of net metering.

For example, a 6 kW system in central Pennsylvania might produce 8,000 kWh of electricity in a year. If your average utility rate is 15 cents per kWh, that solar output would save you $1,200 annually on your electricity bill.

Accounting for net metering credits at the full retail rate, you could offset about $150 per month during the sunnier months. This reduces your payback period on the system cost.

Consult with solar installers to run precise savings estimates based on your location, utility rates, and system size. Accurately modeling the long-term bill savings will show you the solar investment return with net metering.

Sell Your SRECs to Pennsylvania Utilities

On top of net metering, you can further recoup your solar costs in Pennsylvania by selling your Solar Renewable Energy Credits (SRECs).

SRECs are certificates generated for each 1,000 kWh (1 MWh) of solar electricity your system produces. As solar owners generate SRECs, they can sell them on the open market to utilities that need them.

Utilities have to meet state renewable energy standards, so they purchase SRECs from solar producers like you to fulfill compliance requirements. This creates ongoing solar income.

In Pennsylvania, SRECs currently sell for around $40 – $50 per credit on the open market. For a 6 kW system producing about 8 SRECs per year, you could earn $320 – $400 in extra income annually. Larger systems can generate even more valuable SRECs.

When accounting for 30 years of SREC sales plus net metering savings, you may find your solar system pays for itself in as little as 7-9 years in Pennsylvania.

Use Online Tools to Estimate SREC Income

You can get an estimate of potential SREC earnings by using tools such as the EPA SREC Calculator.

Simply enter your location, system size, and projected production. It will estimate the number of SRECs and potential sale price in Pennsylvania‘s solar market. This can reveal thousands in extra income over your system‘s lifespan.

Registering your panels in Pennsylvania‘s SREC program takes a small amount of paperwork. But the ongoing revenue can be well worth the minor effort for years of payouts.

Explore Solar Loans and PPAs for Affordable Financing

While solar incentives help offset hardware costs, you may still need financing to pay for your system upfront. Pennsylvania homeowners have a couple options for affordable solar financing.

One is a solar loan, which spreads out your principal and interest payments over a period of years. Solar loans typically range from 3-12% interest based on your credit profile. This converts your upfront solar expense into manageable monthly payments.

For example, instead of paying $15,000 in cash, you could finance that amount over 10 years at a 5% interest rate. That equates to about $150 per month in solar loan payments, likely far less than your immediate utility savings.

Another option is a Power Purchase Agreement (PPA) offered by some installers. With a PPA, the installer owns your solar equipment. And you just pay a fixed rate per kWh of power produced. This can secure solar with no down payment or long term loan.

Shop multiple solar financing offers to find the best terms. And double check that loans still allow you to claim the federal tax credit. With the right financing, you can affordably access solar energy savings.

Take Advantage of Falling Equipment Prices

One bright spot in today‘s economy – solar panel prices continue to fall. According to the Solar Energy Industries Association (SEIA), solar system costs have dropped by more than 70% over the last decade, while efficiency has increased.

As you evaluate installers, leverage these industry-wide equipment price reductions to negotiate the best deal. Falling solar costs combined with financing can eliminate upfront barriers to adoption.


While Pennsylvania‘s solar resources are limited compared to sunnier states, savvy homeowners can still capitalize on substantial savings. By layering federal tax credits, state incentives like SRECs, net metering bill credits, and affordable financing, you can slash your electricity costs for decades to come. And with solar equipment prices dropping each year, now is the time to explore how Pennsylvania solar can pay off for you both financially and environmentally.