Pennsylvania Rebates and Incentives Summary

Rhode IslandPennsylvania has a history of innovation and forward-thinking ideas. It was the first state to put its website URL on its license plate. It’s home of the first baseball stadium, built in 1909. The first automobile service station went up in Pittsburgh in 1913. And, in 1946 Philadelphia became home to the first computer. The state is not quite leading the charge on solar the way it has in so many other fields. But it’s not far behind either.

Pennsylvania offers home and business owners as well as non-profits and government properties incentives and rebates for installing alternative energy, including photovoltaics, solar thermal, wind turbines and geothermal systems. In 2008, the state fueled its renewable energy program when Gov. Ed Rendell (D) signed a law creating the commonwealth’s $650 million Alternative Energy Investment Fund. This legislation broadly increased funding for projects of all sizes and included an additional $16 million Alternative Fuels Investment Fund. Large sums are reserved to help home and property owners invest in energy efficiency – $237.5 million. And the state invests another $428.4 million in developing alternative energy and creating green jobs.

A fair amount of that money – $100 million – directly benefits homeowners and small businesses through the Pennsylvania Sunshine Solar Program, which provides rebates to help subsidize the cost of installing PV arrays and solar thermal systems. What’s great about the programs is that they’re not mutually exclusive, so if you get a state grant or low-interest-rate loan to help you renovate your building for energy efficiency, you can still qualify for the solar rebate program. All state incentives are offered on a first-come-first serve basis, and the programs are incredibly popular. Some funding is drying up years in advance of expectations.

Incentives are offered at the state and local level and by individual utility companies. Under different legislation, utilities in Pennsylvania are required to purchase power produced by independent solar and other renewable energy providers. The state also renewed its residential and business solar tax credit programs through Dec. 31, 2016. The program allows a 30 percent investment tax credit for each installed system.

Pennsylvania benefits from being centrally located in what is a hotbed of solar activity.  Neighboring New Jersey, Maryland, and New York are currently three states in the top 10 for solar activity in the US.  You will find many qualified solar installers working in most areas of the state that also work in these other states and vice versa.


AEPS Alternative Energy Credit Program

Program Type Net Metering/Performance-Based Incentive

PV, Solar-Thermal Electric, Wind, Landfill Gas, Biomass, Large and Small Hydroelectric, Fuel Cells, Municipal Solid Waste, Combined Heat and Power, and More

Amount Retail rate of utility-provided electricity
Required Documentation Resource Qualification Application and registration
Official Web Site

Pennsylvania’s investor-owned utilities (IOUs) must offer net metering to grid-tied systems and reimburse residential and nonresidential customers at retail rates. The rule applies for systems that generate up to 50 kW (residential) and up to 3 MW (nonresidential installations).

Utilities must provide bi-directional meters that measure the flow of electricity in both directions. If an existing meter does not have this capability and the customer agrees, the utility may set up a dual-meter arrangement instead of a bi-directional meter. Net metered homes and buildings are not assessed additional fees and are subject to the same rate structure, retail rates and monthly charges that non-net-metered customers experience.

In addition to reimbursement for excess electricity generation, system owners earn and retain rights to alternative energy credits, unless they agree to assign the credits to another entity or the generator refuses ownership. These credits are obtained each time the system generates 1 MW hour of electricity. Large electricity suppliers must purchase these credits or pay an Alternative Compliance Payment for those credits it did not purchase. The price is determined by the market and has ranged as high $690 per credit, according to the state’s utility commission. The average price paid in 2009 was $260.19.

Solar Energy Incentives Program

Program Type State Grant, industry, recruitment
Technologies Solar water heat, solar thermal process heat, Photovoltaics
Amount Varies by project, but usually requires matching funds
Required Documentation Systems must be new and SRCC OG-100 rated
Official Web Site

This Pennsylvania solar program supports solar technology adoption on a large scale with loans, grants and loan guarantees. Eligible facilities are those that generate, distribute, or store solar energy; manufacturing or assembly facilities for solar panels or other solar equipment; and solar technology R&D facilities.

All projects have to have a minimum lifetime of four years.

Funds can be used for land and building acquisition, right-of-way and easements, land preparation, construction and renovation, equipment purchase, installation, project planning and feasibility studies, permit fees and administrative costs.

Incentives rang in value. Maximums include:

Manufacturer loans: $35,000 per job created within 3 years
Manufacturer grants: $5,000 per job created within 3 years
Loans for distribution projects: Lesser of $5 million or $2.25/watt
Loans for solar thermal projects or R&D facilities: $5 million
Grants for distribution projects: Lesser of $1 million or $2.25/watt
Grants for solar thermal projects or R&D facilities: $1 million
Grants for feasibility studies: 50% of cost up to $175,000
Loan guarantee grants: Up to 75% of deficient funds up to $30 million


Sunshine Solar Program

Program Type Rebate
Technologies Photovoltaic and Solar Thermal
Amount Up to 35 percent of total cost of project
Required Documentation Pre-application submitted by state-certified installer, application and fee, and proof of deposit with installer
Official Web Site

Home and small business owners who install solar qualify for state rebates. Residential systems can be between 1 and 10 kilowatts. Commercial installations have to be a minimum of 3 kilowatts.

The rebate pays the lesser of $7,500 or 35 percent of installed costs for residential systems and the lesser of $52,500 or 35 percent of installed costs for commercial systems. There are also rebates of $140 per kilowatt up to 400 amp-hours/kW for residential battery back-up systems. Rebates for solar thermal max out at $5,000 for residential applications and $50,000 for commercial.

Originally, small systems between 3 kW and 10 kW qualified for rebates of $2.25 per watt, medium systems between 10kW and 100 kW qualified for rebates of $2.00 per watt, and large systems between 100 kW and 200 kW qualified for rebates of $1.75 per watt. Due to popularity of the program, by July 2010, rebates fell to $0.75 per watt, $0.50 per watt, and $0.25 per watt for the same sizes, respectively.

To qualify, for the PV rebate, all PV components must use new equipment and be in compliance with the state’s construction codes. A solar shade analysis is required. It must show that the system will produce at least 80 percent of what an optimally placed system would produce. The PV installer must be approved by the state Department of Environmental Protection. And for new construction to qualify for the rebate, it must be Energy Star qualified. Most systems must be grid-tied, but applicants can request exceptions.

For solar thermal, it must also be new equipment and it does not cover solar pool heating, solar hot tub heating, solar thermal heating for homes and businesses.

Pennsylvania Solar Power Financial Incentives

Financial Incentives

Green Building Incentive

Industry Recruitment/Support

Local Grant Program

Local Loan Program

Performance-Based Incentive

Property Tax Incentive

State Grant Program

State Loan Program

State Rebate Program

Utility Loan Program

Utility Rebate Program

Rules, Regulations & Policies

Building Energy Code

Energy Efficiency Resource Standard

Energy Standards for Public Buildings

Generation Disclosure

Green Power Purchasing


Net Metering

Public Benefits Fund

Renewables Portfolio Standard

Solar/Wind Permitting Standards

Related Programs & Initiatives

Alternative Fuels and Advanced Vehicles Data Center

The U.S. Department of Energy's Alternative Fuels and Advanced Vehicles Data Center (AFDC) provides a wide range of information and resources to enable the use of alternative fuels and other petroleum-reduction options, such as advanced vehicles, fuel blends, idle reduction and fuel economy. The AFDC site offers a database of state and federal laws and incentives related to alternative fuels and vehicles, air quality, fuel efficiency, and other transportation-related topics.

Green Power Network

The U.S. Department of Energy's Green Power Network provides news and information on green power markets and activities, including opportunities to buy green power. This site provides state-by-state information on green power marketing and utility green power programs. In addition, the site lists marketers of renewable energy credits (RECs), also known as green tags or renewable energy certificates, which represent the environmental attributes of the power produced from renewable energy projects.

Weatherization Assistance Program

The U.S. Department of Energy's Weatherization Assistance Program (WAP) enables low-income families to reduce their energy bills by making their homes more energy-efficient. Through this program, weatherization service providers install energy-efficiency measures in the homes of qualifying homeowners free of charge. The WAP program web site offers a state-by-state map of opportunities, projects and activities.

Wind Powering America

The U.S. Department of Energy's Wind Powering America site provides state-by-state information on wind projects and activities, including wind working groups, validated wind maps, anemometer loan programs, small wind guides, state-specific news, wind for schools, workshops and web casts.