Assumes 3%/yr rate increases, 0.5%/yr panel degradation and no federal tax credit (the 30% §25D credit ended for systems installed after Dec 31, 2025). How we calculate
Data approachEIA rates · NREL sun hours · 2026 federal policy · methodology
Pennsylvania is a mid-sized solar market. SEIA ranked it 24th in the nation as of September 2026, with about 3.1 GW installed, enough to power roughly 386,000 homes and about 1.5% of the state’s electricity. The big change for 2026 is policy: the federal homeowner solar tax credit ended on December 31, 2025, so the economics now rest on equipment prices, net metering, and a small SREC income.
This guide uses current data to show what an 8 kW home system costs, how PECO and PPL customers are credited for surplus power, what SRECs are really worth, and how long payback takes. Every figure is sourced or labeled as a model, and the sources are listed at the end.
📋 Key Insights
How Pennsylvania’s SREC Market Works in 2026
An SREC (Solar Renewable Energy Credit) is a tradable certificate created for every 1,000 kWh your solar system generates. Under Pennsylvania’s Alternative Energy Portfolio Standard (AEPS), electricity suppliers must buy credits equal to 0.5% of the electricity they sell from in-state solar, and they buy those credits from system owners, usually through a broker.
That 0.5% requirement is small, which is why Pennsylvania SRECs trade far below New Jersey or Maryland. Flett Exchange listed the 2025-vintage price at $23.78 in January 2026 and estimated $23 for 2026. Other trackers report ranges from $22 to $40, so prices are not fixed and vary by source and credit year.
Here is what that means for an 8 kW system. At about 1,250 kWh per kW per year, it produces roughly 10,000 kWh and about 10 SRECs. At $23 that is about $230 a year before broker fees; Flett Exchange lists a $2.50 per credit commission. A credit can be used for compliance for about three years and then expires.
Three practical points apply to SREC income:
You generally need to own the system. Lease and PPA companies typically keep the SRECs.
The system must be in Pennsylvania. Out-of-state systems no longer qualify.
Don’t build your plan on a price increase. Bills to raise the carve-out (often called the PRESS Act) have been proposed, but nothing is guaranteed.
Data visualization
Average installed solar cost per watt in Pennsylvania (2026). The statewide average of $2.55/W (orange) puts an 8 kW system near $20,400 before incentives. Source: EnergySage local cost pages, June to July 2026.
Chart summary: Local prices cluster between $2.51 and $2.92 per watt, with the statewide average at $2.55. Philadelphia ($2.75) and Williamsport ($2.73) are above average, while Lancaster ($2.60) and Pittsburgh ($2.59) are close to it. On an 8 kW system, the gap between the cheapest and priciest location shown is about $3,300, which is why comparing multiple quotes matters more than any single average.
⚖️ Policy & Net Metering
PECO Net Metering: What Philadelphia-Area Customers Need to Know
PECO serves the Philadelphia area, and as an investor-owned utility its net metering follows Pennsylvania’s rules in 52 Pa. Code Chapter 75. Residential systems up to 50 kW qualify, which covers essentially every home installation.
Here is how the billing works. Each month, your meter tracks electricity you send to the grid. Surplus is credited against future bills at the full retail rate and rolls forward. At the end of the 12-month cycle, any credits still unused are paid at the utility’s price to compare (PTC), which includes generation and transmission but not distribution. That is a much lower rate, so the best strategy is to size the system close to your annual use rather than far above it.
Pennsylvania rules also say utilities may not charge net metering customers fees that other customers don’t pay without Public Utility Commission approval. Fixed monthly customer charges still apply to everyone, so solar cannot take a bill to zero. Check your latest bill for the exact charge.
Philadelphia installs are priced above the state average. EnergySage’s June 2026 data shows $2.75 per watt, with an average 11.31 kW system at $31,109 before incentives. Confirm that your installer files the interconnection application and gets permission to operate before switching the system on.
⚖️ Policy & Net Metering
PPL Electric Utilities Net Metering: Central and Eastern Pennsylvania
PPL Electric Utilities serves central and eastern Pennsylvania, including areas such as Allentown, Lancaster and Williamsport. It is also an investor-owned utility, so the same state rules apply: up to 50 kW for residential systems, monthly credits at full retail, and a year-end true-up at the price to compare.
The practical differences between PECO and PPL customers come from their own rate schedules, price-to-compare levels, and local installer pricing, not from different net metering laws. EnergySage’s June 2026 data shows $2.60 per watt in Lancaster and $2.73 in Williamsport. The PUC’s PAPowerSwitch site lists the current price to compare for each utility, and it is updated periodically.
One caution applies to both utilities. If you buy electricity from a third-party supplier instead of your utility, that supplier is allowed but not required to offer net metering. Confirm this before you sign a solar contract, and ask the installer to write down how your surplus credits will be handled.
🏛️ Incentives
Federal and Pennsylvania State Incentives for Solar in 2026
The federal homeowner credit is gone. The One Big Beautiful Bill Act, signed July 4, 2025, ended the 30% Residential Clean Energy Credit (Section 25D) for expenditures made after December 31, 2025. If you buy a system with cash or a loan in 2026, the federal credit is $0. This also removes the homeowner credit for batteries.
Three federal exceptions are worth knowing:
Carryforward. Homeowners with unused 25D credit from a system completed by the end of 2025 can carry it forward.
Leases and PPAs. Third-party owners can still claim a business credit (Section 48E) for a limited time and may pass some savings on to you. Terms vary widely, and they usually keep the SRECs.
Earlier completion. Systems finished by December 31, 2025 qualified for the full 30%.
State level: Pennsylvania has no state solar income tax credit. Sources disagree on whether residential solar purchases are exempt from the 6% sales tax, and several trackers say there is no exemption, so don’t assume one. Ask your installer to itemize equipment and labor, and ask your county assessor how solar affects your assessment.
What remains is net metering (see the sections above) and SRECs, plus any local or utility programs, so check DSIRE and your utility before signing.
💰 Cost
How Much Solar Costs in Pennsylvania in 2026
EnergySage’s marketplace data (June 2026) puts the Pennsylvania average at $2.55 per watt. The average system quoted is 13.38 kW and costs about $34,121 before incentives. Because there is no federal credit in 2026, those figures are close to your actual cost for a cash purchase.
For a smaller home, an 8 kW system (about 20 panels) at $2.55 per watt costs about $20,400. A 5 kW system costs about $12,751, according to EnergySage. Larger systems usually cost less per watt, but only size up if your usage justifies it, because year-end surplus credits are paid at the lower price to compare.
📈 Payback Period
Realistic Pennsylvania Solar Payback Period: What the Numbers Show
Pennsylvania’s average residential electricity price was about 17 cents per kWh in April 2026 (EIA data), slightly below the national average of about 18 cents. That is not a high-rate state, so payback is solid but not fast.
Our model uses an 8 kW system at $20,400 producing 10,000 kWh in year one, with 0.5% annual panel degradation and SREC income of $23 per credit. Year-one value is about $1,700 in electricity savings plus $230 in SRECs.
Scenario
Payback
25-year net savings*
Electricity prices rise 3% a year
About 9.6 years
About $43,000
Flat electricity prices
About 10.8 years
About $25,000
Flat prices, no SREC income
About 12.3 years
Lower than above
*Cash purchase, not discounted for the time value of money. This is a simple model, not a quote.
Data visualization
Modeled cumulative net savings, 8 kW Pennsylvania system. Starts at -$20,400 and reaches about +$25,063 (flat rates) or +$42,973 (3% yearly rate growth) by year 25, with no federal credit. Source: EnergySage, EIA, Flett Exchange; editorial model.
Chart summary: Both lines start at -$20,400 and cross zero around years 10 to 11 (about year 10 with 3% yearly price growth, about year 11 with flat prices). By year 25 the modeled system is ahead by roughly $25,000 with flat prices and roughly $43,000 with 3% annual price growth. The gap between lines shows that future electricity prices matter more to the result than SRECs do.
52 Pa. Code Chapter 75 and Pennsylvania PUC materials: net metering limits and year-end compensation at the price to compare.
IRS and trade-press coverage of the One Big Beautiful Bill Act (Solar Power World, Solar.com): end of the 25D credit.
EIA Electric Power Monthly (April 2026): average residential electricity price.
Last reviewed October 5, 2026. Policies, SREC prices, and utility tariffs change, so verify current details with your utility and installer before you sign.
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The average installed price in Pennsylvania is about $2.55 per watt before incentives, according to EnergySage (June 2026). That puts an 8 kW system near $20,400 and the average 13.38 kW system near $34,121. Philadelphia runs higher at $2.75 per watt, Pittsburgh is $2.59, and Lancaster is $2.60. Because the federal homeowner credit has ended, these are your out-of-pocket prices for a cash purchase.
Not for homeowners who pay cash or take a loan. The 30% Residential Clean Energy Credit (25D) ended for expenditures after December 31, 2025, under the One Big Beautiful Bill Act. Unused 25D credit from an earlier year can still be carried forward. Companies that own leased or PPA systems may still claim a business credit, and Pennsylvania has no state solar tax credit.
Yes, for customers of investor-owned utilities such as PECO and PPL. Residential systems up to 50 kW get monthly surplus credited at the full retail rate. Credits left at the end of the 12-month cycle are paid at the utility's price to compare, which covers generation and transmission but not distribution. Rural co-ops, municipal utilities, and some third-party suppliers are not guaranteed to offer it.
Less than most people expect. One SREC equals 1,000 kWh, so an 8 kW system producing about 10,000 kWh earns roughly 10 SRECs a year. Flett Exchange listed Pennsylvania SRECs near $23 in January 2026, or about $230 a year; other trackers report $22 to $40. Pennsylvania's solar carve-out is only 0.5%, so treat SRECs as a small bonus.
About 10 years in our model of an 8 kW system costing $20,400. With electricity prices rising 3% a year, payback is about 9.6 years. With flat prices it is about 10.8 years, and about 12.3 years if you also earn no SREC income. Higher bills or a lower installer price shorten it. Panels typically carry 25-year warranties.
$137/month electric bill by state
System size and payback vary by electricity rate and sun hours — see your state.
21.04¢/kWh — Pennsylvania average residential price. Source: EIA Electric Power Monthly, Table 5.6.B (year-to-date through July 2026), residential average retail price (July 2026) (EIA)
Solar production
4.2 peak sun hours/day × 0.82 system derate. Approximate state-average daily solar resource (peak sun hours) based on NREL solar resource data (NSRDB); not location-specific — use NREL PVWatts for an address-level estimate. (NREL PVWatts)
Installed price
$3.00 per watt before incentives. Blended 2026 US residential installed price used by this site; EnergySage marketplace reported about $2.60/W (mid-2026); full-market medians are higher.
Federal tax credit
$0 for homeowner-owned systems installed in 2026 — the 30% §25D credit ended Dec 31, 2025 (IRS)
Net metering
Full retail net metering — solar assumed to offset 87% of the bill. Pennsylvania requires retail-rate net metering, with annual excess paid at the price-to-compare.
Estimates only — not tax, legal or financial advice. Get at least three installer quotes and confirm incentives with your utility and a tax professional.