Pennsylvania is an unusual solar market in 2026. Our model puts typical payback near ~8–9 years without modeling SREC income, comparable to Massachusetts and New Jersey on payback alone. But almost everything about PA is structurally different from its Northeast neighbors:
- PA is the only Northeast state with ZERO solar tax benefits. No state income tax credit. Sales tax NOT exempt (6% applies,
$2,300 on a typical system). Property tax NOT exempt ($450/year ongoing — first state in our verified set where property tax isn't exempt). - PA has a real, live SREC market — about $25–40 per credit, $250–480/year of unmodeled income on a typical 8–10 kW system. We don't model it because prices are volatile, but it's real money that makes actual payback faster than the calculator shows.
- PPL is moving away from 1:1. PPL has filed a rate case to shift exports to hourly LMP-based credits starting mid-to-late 2026, similar to California NEM 3.0. Estimated impact: 40–60% cut to export value. PECO (modeled here) remains 1:1 for now.
The driver — and the reason PA solar works at all despite the absent exemptions — is the electricity bill. PECO residential retail is about ~21¢/kWh, above the US average, and rising fast (+30% since 2021).
What changed
The federal Residential Clean Energy Credit (§25D) — the 30% homeowner credit — was repealed for systems installed after December 31, 2025. For 2026 Pennsylvania buyers, the federal credit on a purchased system is $0. The same applies to home batteries purchased outright. The §48E commercial credit (30%) still exists, but only for leased or third-party-owned systems where construction begins before July 4, 2026 — the lessor claims it, not you. Full federal context here.
VERIFIED 2026-06 · irs.govNet metering: 1:1 today, but PPL is moving
Pennsylvania law (Title 52, Chapter 75) requires the major IOUs — PECO (largest, modeled here, greater Philadelphia), PPL (Lehigh Valley, Harrisburg, central PA), Duquesne (Pittsburgh), Met-Ed, Penelec, Penn Power, and West Penn — to credit residential rooftop solar at full retail 1:1 for systems up to 50 kW.
How it works today:
- Self-consumed solar offsets your full retail rate (~21¢/kWh on PECO).
- Exports are credited at the same retail rate, 1:1.
- Credits roll month-to-month.
- Annual true-up settles excess at the lower price-to-compare (PTC) rate — so don't oversize beyond your annual consumption.
The PPL shift — fresh news. PPL has filed a rate case to shift exports from 1:1 to hourly LMP-based credits starting mid-to-late 2026. The mechanism is similar to California NEM 3.0: instead of one retail rate, your exports get credited at the locational marginal price for the specific hour they were sent to the grid. Estimated impact: 40–60% cut to export value. Systems installed before the change may be grandfathered into 1:1 — but until the tariff is finalized, exact terms aren't known.
This is the second utility-driven net metering shift our calculators are tracking — Washington's PSE and Seattle City Light gave similar notices that 2026 is likely their last year of 1:1. PECO remains 1:1 and is what this calculator models. If you're on PPL, verify your current tariff with PPL before signing. If you're already on Duquesne or one of the FirstEnergy utilities (Met-Ed, Penelec, Penn Power, West Penn), they remain 1:1 as well — but watch for similar filings.
VERIFIED 2026-06 · PA Title 52, Ch. 75; PECO / PPL tariffsThe driver: ~21¢/kWh PECO retail, rising fast
PECO residential retail is about ~21¢/kWh — the highest of PA's IOUs (statewide average ~$0.178, range $0.20–0.23 across utilities). PECO rates are up about 30% since 2021 and continuing to rise.
That's the rate that matters for every kWh of solar you self-consume or export under 1:1 net metering. PA's high retail is what makes solar pay back well despite the absent tax benefits. Unlike Montana or Washington where cheap power makes solar payback long even with 1:1, Pennsylvania's expensive grid makes each avoided kWh meaningful.
VERIFIED 2026-06 · eia.govSREC market — real money, not in the payback above
This is the second-most-important Pennsylvania fact, and one most calculators don't show.
Pennsylvania has a live, real Solar Renewable Energy Credit (SREC) market — unlike states where SRECs are claimed in marketing but don't actually exist as tradable instruments. PA SRECs are real and you can sell them.
- One SREC is issued per MWh of solar production, registered through PJM-GATS under PA's Alternative Energy Portfolio Standard (AEPS).
- Current prices: ~$25–40 per SREC. Volatile.
- A typical 8–10 kW residential system earns ~9–12 SRECs/year — about $250–480/year of real income.
- SRECs belong to the system OWNER. If you lease or sign a PPA, the leasing company keeps them. If you buy outright, you keep them.
We don't model SREC income in the payback calculation because the $25–40 price range is wide enough that any specific assumption would mislead. But that money is real. Your actual Pennsylvania payback is meaningfully faster than the calculator shows if you sell your SRECs through a broker.
Track current SREC prices before sizing a system or signing a contract. Most installers can connect you to an SREC broker; SRECTrade and similar platforms handle the registration and sale process.
VERIFIED 2026-06 · PJM-GATS; PA Alternative Energy Portfolio Standard (AEPS)What Pennsylvania doesn't have — and how unusual that is
Pennsylvania is the only Northeast state with zero solar tax benefits. Read carefully because this part of the math frequently gets misrepresented.
No state income tax credit. PA doesn't offer one. Don't budget for it.
Sales tax NOT exempt. Pennsylvania's 6% state sales tax applies to solar equipment — adding roughly $2,300 to a typical residential install. Most Northeast states (Massachusetts, New Jersey, New York, Maryland, Virginia) exempt solar from sales tax. Pennsylvania does not. Sources claiming a PA solar sales-tax exemption are wrong.
Property tax NOT exempt. Pennsylvania does not exempt added solar value from property tax. Your home's assessed value rises by the system value, adding roughly ~$450/year in property tax (at PA's ~1.2% effective rate). Over 25 years that's roughly ~$11,000 of ongoing cost the displayed payback doesn't show. Multiple bills to create a solar property tax exemption have been introduced in the PA legislature; none have passed as of 2026.
The pattern is structural, not an oversight. Pennsylvania's neighbors — NJ, NY, MD, VA, MA — all built solar incentive structures over time. PA didn't. What carries PA solar despite this is high retail rates and the SREC market — the policy gap is real, but the dollar economics still work.
Fixed customer charge — solar doesn't offset it
One more line item the payback doesn't show: PECO and PPL both levy a fixed monthly customer charge of roughly $10–15 that you pay regardless of how much solar you produce. Over 25 years that's $3,000–$4,500 of bill that solar can't touch.
Factor this into your savings expectations. Your "post-solar" PA bill isn't zero — it includes the fixed customer charge no matter how cleanly your generation matches your usage.
Battery in Pennsylvania — weak arbitrage, decent resilience, PPL-conditional upside
Under PA's current 1:1 net metering on PECO, the retail-vs-export gap is effectively zero — same as Florida, Virginia, Maryland, Massachusetts, and other 1:1 retail states. On pure energy arbitrage, a battery in PA today doesn't pay off.
Pennsylvania has no state battery incentive. There's no federal credit on the battery purchase in 2026 (§25D repealed).
What's worth flagging:
- High PECO retail (~$0.21) makes the resilience case decent. Each outage hour avoided is worth more in PA than in low-retail states like Montana or Washington. Pennsylvania's storm season is real.
- If PPL's LMP shift goes through, a battery becomes meaningfully more valuable for PPL customers — storing what would have been low-LMP exports for high-LMP hours, similar to how California batteries work under NEM 3.0. But this is speculative until PPL's tariff is final.
If you're considering a battery in PA, the case is resilience now plus speculation about PPL's shift — not arbitrage math today.
The honest picture
Pennsylvania solar in 2026:
- Federal credit: $0. Not 30%.
- No state income tax credit.
- Net metering: full retail 1:1 on PECO, PPL, Duquesne, Met-Ed, Penelec, Penn Power, West Penn (Title 52, Ch. 75), up to 50 kW. Monthly rollover; annual true-up settles at lower PTC rate.
- FRESH NEWS for PPL: rate case to shift exports to hourly LMP-based credits mid-to-late 2026 — could cut PPL export value 40–60% (CA NEM 3.0 mechanism). Possible grandfathering. PECO remains 1:1.
- Retail rate: ~21¢/kWh on PECO (statewide avg $0.178, range $0.20–0.23). Above US average. Up ~30% since 2021. This is what carries PA solar.
- No state tax benefits:
- Sales tax: 6% APPLIES (NOT exempt). ~$2,300 on typical system.
- Property tax: NOT exempt.
$450/year ongoing ($11k over 25 years). Multiple bills introduced; none passed.
- SREC market: LIVE. ~$25–40/SREC, ~$250–480/year on 8–10 kW. PJM-GATS / PA AEPS. Owner not lessor. Not modeled (volatile), but real income that makes payback faster than shown.
- Fixed customer charge: ~$10–15/month on PECO/PPL — NOT offset by solar. ~$3,000–$4,500 over 25 years.
- Battery: weak on arbitrage today. Decent resilience case (high retail). PPL LMP shift would create real battery upside for PPL customers (speculative).
- Typical model payback: ~8–9 years without modeling SREC. With SREC sold through a broker: meaningfully faster.
Pennsylvania is the inverse of states like Minnesota and Maryland, which have moderate retail but real upfront cash and tax exemptions. PA has high retail and no upfront cash and no exemptions — and a real SREC market that doesn't show up in calculators. The math still works because the bill is high enough that even with the policy gap and the property tax addition, displaced retail dollars and SREC sales clear the system cost in single-digit years.
If you're on PECO, this calculator's ~8–9 year output is roughly right (and SREC makes it faster). If you're on PPL, the answer depends on whether you can interconnect before the LMP shift takes effect — verify the current tariff and grandfathering rules with PPL directly. If you're considering lease or PPA, remember the SREC income goes to the lessor — that's part of why outright purchase is the better economic choice in PA for buyers who can afford it.
Before you commit:
- Reject any quote that includes a 30% federal credit. Repealed for 2026 purchases.
- Reject any quote that claims a PA sales-tax exemption or PA property-tax exemption. Neither exists. The 6% sales tax applies; property tax rises by system value.
- Confirm whether you're on PECO, PPL, Duquesne, or a FirstEnergy utility — PPL's pending LMP shift specifically affects PPL customers.
- Track current SREC prices through a broker (SRECTrade or similar) — that income meaningfully shortens real payback.
- Buy outright if you can — SRECs belong to the system owner; a lease/PPA hands them to the lessor.
- Factor the property tax addition (
$450/year) and fixed monthly customer charge ($10–15/month) into your savings expectations — both are real ongoing costs the calculator doesn't show. - Don't expect a battery to shorten payback today on PECO; the case may strengthen for PPL customers after the LMP shift.
- Run the calculator with your actual ZIP and system size.
Estimates only — PECO modeled; PPL shifting to LMP (verify if on PPL); SREC prices volatile and not in payback; sales/property NOT exempt. Verify with your utility. This is not financial advice.