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

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), full retail net metering, rising electricity rates, and moderate installation costs creates an economic case that is stronger than most people expect.

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.

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.

Full Retail Net Metering

Pennsylvania requires all electric distribution companies to offer net metering for residential systems. Excess generation is credited at the full retail rate, and credits roll over month to month. At year-end, any remaining credits are compensated at the utility's price to compare.

This is essential for the economics. Your summer overproduction banks credits that offset your winter shortfall.

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)

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 varying significantly across the state, comparing quotes from multiple installers 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
• Full retail net metering is required for all utilities statewide
• 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 net metering that produces a solid return over time. For most homeowners in the Philadelphia to Harrisburg corridor, the math works.

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