Pennsylvania’s average residential electricity rate currently stands at 12.75¢/kWh, which is substantially higher than the national average. In other words, PA residents pay a higher price for using the same amounts of electricity as many other states. So, they have a pretty strong incentive to go solar and save big on their monthly utility bills. However, there’s a caveat!
Compared to most other states in the U.S., the keystone state has a lot of catching up in the residential solar domain. For instance, several other states offer sales tax exemptions and property tax exemptions on residential solar system purchases. However, Pennsylvania has no such incentive for its residents.
Naturally, a question emerges – is it still worth adopting residential solar in Pennsylvania?
Let’s find out.
Pennsylvania Financial Incentives for Residential Solar
Although the state does not offer any tax exemptions on residential solar purchases, a flurry of other incentives can make solar energy quite attractive to homeowners. Here’s a quick overview of them:
- Federal Solar Tax Credit
The federal Income Tax Credit (ITC) is perhaps the biggest financial incentive available to homeowners. Depending on your purchase date, you may get a flat 22%-26% credit on the cost of your solar system. Remember, this is a credit, not an upfront discount. So, your annual income should be big enough to take advantage of the credit. If that’s the case, then that’s a sharp cut in your investment into solar.
- Net Metering
It is mandatory for all utility companies to offer net metering arrangements to their customers in the state. You can divert excess energy from your solar system to the power grid and earn from it as part of this arrangement. Since you’ll be doing this over several years, your savings will accumulate rapidly over time and snowball into five-digit sizes. That’s a lot of savings!
- Solar Renewable Energy Certificates (SRECS)
Solar Renewable Energy Certificates (SRECss) are another brilliant way for solar energy customers to earn money. They work similar to carbon credits, and utility companies are required by law to purchase them. Market forces regulate the prices of SRECs, but they tend to be pretty substantial.
Every megawatt-hour of solar energy you generate is equal to 1 SREC. So, the more solar energy you produce and use, the more SRECs you get.
Cost Savings on Utility Bills
Once you go solar, you get free, clean energy for nearly three decades. The best-quality solar systems often last longer than 30 years. So, the savings on utility bills alone can be tens of thousands of dollars.
Considering the various incentives and cost savings offered by residential solar, there’s no doubt that it makes perfect financial sense for most homeowners in Pennsylvania to go solar.