Solar in Pennsylvania: SRECs, Net Metering, and a Solid Case

Last updated: 2026-07-20 — updated to reflect a July 2026 change to PPL's net metering tariff.

Pennsylvania is a sneaky-good solar state. It does not get the attention of California or New York, and nobody is putting Pennsylvania on a "best states for solar" list. But the combination of SRECs (Solar Renewable Energy Certificates), net metering, rising electricity rates, and moderate installation costs creates an economic case that is stronger than most people expect — with one important caveat if you're a PPL customer, covered below.

If you are a Pennsylvania homeowner paying PECO, PPL, Duquesne Light, or one of the many competitive electricity suppliers, here is what solar actually looks like in 2026. Net metering rules are not uniform across the state's utilities, and that gap just got wider.

The Good News

SRECs — Pennsylvania's Hidden Solar Income

This is the big one that most people outside the mid-Atlantic do not know about. Pennsylvania has an SREC market created by its Alternative Energy Portfolio Standards (AEPS). For every 1,000 kWh (1 MWh) your solar system produces, you earn one SREC that you can sell on the open market.

Pennsylvania SREC prices in 2026 fluctuate between $20 and $45 per SREC, depending on market conditions. A typical 7.5 kW system producing 9,000 kWh per year generates approximately 9 SRECs, worth $180-$405 per year.

This is not life-changing money, but it is ongoing annual income on top of your electricity savings. Over 15 years, SRECs can add $2,700-$6,000 to your total return. SREC prices can be volatile, so do not build your financial case entirely around high SREC values — treat them as a bonus.

Net Metering — Solid for Most Utilities, Changed for PPL

Pennsylvania requires electric distribution companies to offer net metering for residential systems. Historically, that has meant excess generation credited at the full retail rate, with credits rolling over month to month and any year-end surplus compensated at the utility's price to compare. PECO and Duquesne Light customers still get this deal. Your summer overproduction banks credits that offset your winter shortfall, and every kWh you export is worth the same as every kWh you buy.

PPL customers, this section changed for you. As of July 1, 2026, PPL Electric Utilities customers are no longer guaranteed flat, full-retail-rate credit for excess solar generation. The Pennsylvania Public Utility Commission approved a revised net metering tariff for PPL that moves away from a simple one-to-one retail credit. PPL's service territory covers a large chunk of central and eastern Pennsylvania outside Philadelphia — including the Lehigh Valley, Harrisburg, and Lancaster areas — so this affects a meaningful share of the state's solar-eligible homeowners.

What we can confirm: the blanket "full retail net metering" assumption no longer holds for PPL accounts. What we cannot tell you from here is the exact new credit rate for your specific rate class — that detail depends on your tariff and needs to come from PPL directly or from an installer quoting your address. Before you sign a contract in PPL territory, get the crediting structure in writing and run the math on your actual export credit rate, not the full retail rate assumed elsewhere in this article.

This does not eliminate the case for solar if you're a PPL customer. Self-consumption savings (the power you use as you generate it) and SREC income are unaffected by this change. But your payback period will likely be longer than the PECO-based numbers below if a large share of your production gets exported rather than self-consumed.

Rising Electricity Rates

Pennsylvania's average residential rate is $0.17-$0.20/kWh, with some PECO customers in the Philadelphia suburbs paying $0.20-$0.24/kWh depending on their supplier and rate plan. These rates have increased significantly over the past five years, and deregulation means prices can spike when you renew your supply contract.

Higher rates mean higher savings per kilowatt-hour produced. Pennsylvania rates are above the national average, which strengthens the solar math.

Sales Tax Exemption

Solar equipment is exempt from Pennsylvania's 6% sales tax. On a $23,000 system, that saves $1,380 right off the top.

The Challenges

No State Tax Credit

Pennsylvania does not offer a state solar tax credit. With the federal ITC expired, there is no direct tax credit available. The SRECs provide ongoing income instead of an upfront cost reduction, which helps but does not hit the same way as a $5,000 or $7,000 credit in year one.

Moderate Solar Resource

Pennsylvania averages 3.8 to 4.3 peak sun hours per day. Philadelphia and the southeast get the most. Pittsburgh and the western part of the state are cloudier — Pittsburgh is one of the cloudiest cities in America. Production varies meaningfully across the state.

A 7.5 kW system in Philadelphia produces roughly 9,500 kWh per year. The same system in Pittsburgh produces roughly 8,200 kWh. That 14% gap directly affects your payback.

Roof Age and Condition

Many Pennsylvania homes — especially in Philadelphia's row house neighborhoods and Pittsburgh's older suburbs — have aging roofs. Solar panels last 25+ years. If your roof has less than 10 years of life remaining, replace it before installing solar. Removing and reinstalling panels for a roof replacement costs $2,000-$5,000.

The Pennsylvania Solar Math (2026)

The numbers below assume full retail net metering, which still applies for PECO and Duquesne Light customers. If you're on PPL, your export credit rate may be lower than the full retail rate as of the July 2026 tariff change — treat the payback estimates below as a best case until you confirm your actual crediting terms.

Typical 7.5 kW system (Philadelphia area):

• Installed cost: $22,500 ($3.00/watt)
• Federal ITC: $0 (expired January 1, 2026)
• State credits: $0
• Sales tax savings: ~$1,350
• Net cost: ~$21,150

Annual production: ~9,500 kWh

Average PECO rate: $0.19/kWh

Annual electricity savings: ~$1,805

Annual SREC income: ~$270 (9 SRECs x $30 average)

Total annual benefit: ~$2,075

Payback period: ~10.2 years

25-year savings: $28,000-$40,000 (including SRECs, assuming 3-5% annual rate increases)

That is a genuinely competitive payback period for a post-ITC world. The combination of high rates and SREC income pushes Pennsylvania into the top tier of solar economics among states without a state tax credit.

With PECO and PPL rates — and now PPL's net metering terms — varying significantly across the state, comparing quotes from multiple installers and confirming your utility's actual export crediting is the best way to find the right system at the right price.

Pittsburgh variant:

• Lower production: ~8,200 kWh/year
• Annual savings: ~$1,558 + $245 SRECs = ~$1,803
• Payback: ~11.7 years

Still solid, but the cloud cover does make a difference.

When Solar Makes Sense

Install if:

• Your monthly electric bill exceeds $130
• You are in southeastern Pennsylvania (best sun in the state)
• You plan to stay in your home 8+ years
• Your roof is in good condition with 10+ years of life remaining
• You want to take advantage of SRECs while the market exists

Wait or skip if:

• Your bill is under $90/month
• You plan to move within 5 years
• Your roof needs replacement soon
• You are in an area with heavy shading from mature trees

Key Takeaways

• Pennsylvania's SREC market provides $180-$405 per year in ongoing solar income
• Net metering now varies by utility — PECO and Duquesne Light still credit exports at the full retail rate; PPL customers lost that guarantee as of July 1, 2026 and need to confirm their actual export credit rate before signing
• No state tax credit, but SRECs and the sales tax exemption partially compensate
• Electricity rates of $0.17-$0.24/kWh make each kWh of solar production highly valuable
• Typical payback: 10-12 years in Philadelphia, 11-14 years in Pittsburgh
• 25-year savings of $28,000-$40,000 including SREC income
• Sales tax exemption saves ~$1,350 on a typical system
• Check your roof age before installing — many PA homes need a roof first

Pennsylvania is a state where solar makes quiet, practical financial sense. You will not see the flashy incentive stacking of New York or the desert production numbers of Arizona. What you get instead is a reliable combination of high rates, SRECs, and — for most utilities — full-retail net metering that produces a solid return over time. PPL customers should read the net metering section above closely and confirm their actual export credit rate before assuming the same math applies to them. For most homeowners in the Philadelphia to Harrisburg corridor, the math still works.

Affiliate Disclosure: This article may contain affiliate links. If you make a purchase through these links, we may earn a small commission at no extra cost to you. We only recommend products we genuinely believe in. This helps support our work and allows us to continue providing free content.