Pennsylvania has a steady growing solar industry that has over 761 MW of installed solar power and plans to double its capacity in the next 5 years.
The state solar industry takes full advantage of the solar policies and programs to make solar viable. In particular, the Net Metering compensates and rewards the initial investment of solar, allowing a residential owner to generate around 21.000 $ of extra income on the 25 years lifespan of the system.
Much of the solar positive highlights are found by a good experience with the solar installer you choose for your project, that’s why we bring a guide of the top solar installers and incentives you should look out for.
What you should know about the Electricity Sector in Pennsylvania?
Pennsylvania’s electric deregulation market began in 1996, meaning that, since then, residents and business owners of the state have the opportunity to choose their electricity provider. The energy market approach creates many opportunities for the average consumer, achieving an average electricity cost of 13.09 cents per kWh.
The access to different electricity rates allows the customer to compare and contrast all options of the market, ultimately reducing the cost of the bills, creating many jobs depending on the market, and creating a better client experience for the customers along the way.
In Pennsylvania you can choose whether to buy electricity from one of the many Electric Distribution Companies (EDC’s), or one of the 11 Utility companies of the state, depending on the area where you live at. In particular, the Utility companies are regulated by Pennsylvania’s Public Utilities Commission (PUC), a public entity that supervises all utility and services operations of the state.
The Utility companies are in charge of the operation and maintenance of the electricity infrastructure, while EDC’s or also called Energy Providers, are energy retailers that buy energy from the wholesale market and re-sell it to their customers.
Is it worth going solar in Pennsylvania?
As we mentioned, Pennsylvania has an average electricity rate of around 13.09 cents per kWh, ranking in the top half of the electric rates by states of the US. Making the average electric bill in the state averages about 120 USD a month.
An already installed standard system, of around 5 kW can cost around 15,000 USD to 20,000USD before the 26% Tax incentive (ITC), and it will save up anywhere from 60 USD up to 115 USD, of your monthly electric bill, depending on the time of the year.
Meaning that a solar system of around 5 kW, after incentives, will pay itself in around 8.5 to 10 years. And passed that time, generate savings of around 21,000 USD on the remaining 15 years of lifespan of the system.
The greatest advantage of solar in Pennsylvania is the Net Metering policy of the utility, meaning that any excess energy generated by your system during any time of the day, will be sent to the grid where you will receive credits in kWh that you can offset in your later consumption.
For the average energy consumption of a Pennsylvania home, an 8 kW system can supply all the electric demand. When already installed, such a system can cost anywhere from 21,000 USD up to 30,000 USD before federal and state incentives.
How much energy will your solar system generate?
The amount of energy you can generate with a solar system is directly related to the amount of solar exposure that your photovoltaic panels receive, this exposure is called solar irradiance. Pennsylvania averages about 4.00 – 4.25 kWh/m2/day, according to the National Renewable Energy Laboratory (NREL).
During day hours of direct sunlight exposure averages about 3.91 hours, due to the high cloud coverage of the state. Pennsylvania ranks low on solar irradiance and solar exposure, and even so, solar power is still really plausible in the state.
An average 8 kW solar system can supply the average electric consumption of a Pennsylvania’s home, producing about 930 kWh monthly, or 11,260 kWh annually. Surpassing the average energy consumption of around 850 kWh per month.
Such a system exceeds the energy demand of the average home of Pennsylvania and generates an extra monthly income by the NEM policy of the state and from the solar renewable certificates generated (SREC).
Payment options for your PV system in Pennsylvania
Solar companies in Pennsylvania are looking to benefit homeowners by providing them with different payment plans when installing their rooftop solar systems. To help you with this decision, we will further explain what different payment options are allowed in Pennsylvania when installing a solar system.
- Solar purchase/Cash: The classic and most straightforward payment method is where you pay upfront for your solar system and are the full owner. A direct purchase allows you to be eligible for the federal incentive which reduces the costs of this solar system.
- Solar loans: Solar loans are quite similar to Solar Purchase but in this case, your solar system is financed through a loan over a period of time and with an established APR (interest rate). Some solar companies may refer you to a third-party financial institution to procure your loan, while others may finance you the loan themselves. You must consider different loan options when choosing this payment method for you to find the loan option that provides you with the most benefits.
- Solar lease: For this payment plan, you lease the panels from your solar provider while the company maintains ownership of the modules and you enjoy the benefits. There are also different terms and interest rates established that you can opt for. Net Metering is still applied, allowing for you to factor the savings from excess power into your monthly payments. For this payment option, you are not eligible for federal and local incentives.
- Solar Power Purchase Agreement (PPA): A very similar scheme to a solar lease, the solar PPA is an agreement in which a customer directly buys power from a generator, by a fixed price by kWh consumed. By this scheme, you’re also not eligible for federal and local incentives, but you can benefit from lower prices with the correct energy management.
What are the solar incentives in Pennsylvania?
Much of the solar industry growth in the United States has been pushed throughout the last years by local and federal incentives to renewable energy solutions. As so, Pennsylvania does not stay behind and offers several local incentives to drive forward its solar industry.
Alternative Energy Portfolio Standard (AEPS)
The main Pennsylvania’s policy to stimulate the growth of the renewable industry is throughout its form of Renewable Portfolio Standard (RPS), the Alternative Energy Portfolio Standard (AEPS). This state policy requires utilities to generate and purchase a certain amount of their manage electricity from renewable sources by a specific date.
In Pennsylvania, the AEPS standard requires all major utilities to meet 18% of alternative energy managed in 2021. The AEPS divides alternative energy sources into two tiers.
Tier I, includes standard renewable generation solutions such as Solar PV, Wind, geothermal, and others. On the other hand, while Tier II includes efficiency energy solutions such as distributed generation (DG) and demand-side management among others.
In particular, 8% of the managed energy must come from Tier I sources, while 10% from Tier II. And within Tier I, 0.5% of the managed electricity must be supplied by photovoltaic (PV) systems.
As recent as March 26th, Pennsylvania’s Senator introduced a legislation that would increase the state’s solar carve-out from 0.5% to 5.5%, and increase the Tier I requirements from 8% to 18% by 2026.
Solar Renewable Energy Credits (SREC)
In order to meet this demand, utilities must purchase Alternatives Energy Credits (AEC) also known as Solar Renewable Energy Credits (SREC), from accredited renewable energy sources.
Qualified solar PV systems generate an SREC for every 1 MWh of energy generated (1.000 kWh). For example an average 5 kW solar system can generate around seven SREC’s annually. At present 2021, these certificates can be sold on around 30 USD per SREC, translating into approximately 210 USD extra per year.
In order to have your Solar PV system accredited you must sign an application on Pennsylvania’s AEPS program website, but must solar installers take charge of this process.
It can take around 2 months to be approved by the PennAEPS, and once your system has been accepted, it will automatically generate its SREC’s throughout the readings of the facility meter. The SREC’s can be tracked through the PJM Generation Attributed Tracking System (GATS), a platform to buy and sell renewable energy certificates.
Pennsylvania Net Metering (NEM)
Pennsylvania’s NEM is one of the most important state policies for solar energy. It has been applied as a rule since 2012, by the Public Utility Commission (PUC) of Pennsylvania on the eleven utility companies overseas by the commission.
NEM allows a solar system owner to sell excess solar electricity back to the grid at the same price you would buy electricity from it.
Meaning that if your electric bill is usually around 50 USD, if you install a solar system that generates 40 USD worth of energy back to the grid throughout the month, you will only pay 10 USD on your electric bill that month.
Usually, if you produce more energy than you consume, the energy credits provided will supplement your energy needs for the next month. If by the end of the year you have produced more energy than you have consumed the electricity provider will pay you the extra energy generated.
The PUC states that the maximum residential solar system for Net Metering must be under 50 kW of power.
City and County incentives
Besides from federal and state policies, several county or city programs help residents go solar in Pennsylvania. Such as the Solarize Philly, a program launch in 2017 by the Philadelphia Energy Authority (PEA) an independent local authority formed by the city council and Mayor.
The program offers several solar rebates to the city residents and negotiates below-market prices by obtaining group discounts from installers and distributors, a scheme used by several county authorities in Pennsylvania.
Federal Solar Investment Tax Credit (ITC)
The Federal Solar Investment Tax Credit (ITC) is a nationwide policy mechanism that allows residential and commercial owners to access a 26% rebate of the solar system cost, from their federal taxes.
The ITC has been presented since 2006 and has been expanded several times throughout the years. Currently, the rebate of the ITC sits in 26% of the cost of the solar system, until 2022, passed that year it will fall to 22% in 2023 and finally reduce to 10% for residential systems after 2023.
The tax credit is a dollar-to-dollar reduction in the income taxes that a person or a company would otherwise pay the federal government, as so, you must have enough income for the tax credit to be meaningful. And it only applies to the direct purchase of your solar system, it does not apply for leasing or PPA agreements.
Best Solar Companies in Pennsylvania: Our top choices
To help you choose the best solar company for your home solar installation, we have compiled a list of our top choices. When compiling this list, we took into account the following criteria:
- The reputation of the company considering reviews and satisfaction from verified customers.
- Quantity and quality of solar projects performed by the company.
- Quality of the solar panels, inverters, and other components used for the installations.
- Warranty offered for the products and installation.
Funded in 2005, Exact Solar is a local and family-owned company with over 15 years on the market and over 5 MW of solar installations.
This company has the best online reviews on the solar installers market of Pennsylvania, proving exceptional customer service attention. They specialize in residential solar electric systems, solar water heating, and solar pool heating.
Offering installation, financing, maintenance, and repairmen to all their installations they offer complete solutions for residential solar systems. Their technical experts are certified by the NABCEP as a certified solar PV installer, and they have collected several recognitions throughout the years as one of the fastest-growing solar companies.
Paradise Solar Energy is a family-owned business that started in 2009 and has since expanded to 8 states, with over 45 MW of solar installations since its foundation.
The company specializes in solar EPC projects, meaning they can handle a broad scale of project sizes from residential, farms, and commercial up to utility applications.
They have a unique “Triple Ten Guarantee” which offers 10 years guarantee on solar production, monitoring, and workmanship warranty, making it an industry distinctive. Their brand parents, such as SMA, SolarEdge, Emphase, and LG Chem are top of the line, assuring overall system quality.
Trinity Solar is a nationwide residential solar installer funded in 1994. It counts with over 27 years of experience, and over 9 MW of solar installations in Pennsylvania just on the year 2020, making it one of the most experienced companies in the state.
The company has rapidly spread in over 9 states and counts with specialized departments to handle every aspect of the solar project including design, permitting, interconnection, installation, and finance.
Their technical expertise is certified by NABCEP certificated and LG silver pro partnership. Their financial and corporate status count with a BBB rating of A+.
Luminal solar is a small Company that Works in over 4 states of the northeast of the nation. The company counts with great online reviews in all of the portals, reassuring that they have customer-focused attention.
With over 4 MW of power installed in solar residential projects, they count with the experience for the job. They have a specialized team for consulting, design, permitting, and installation, making them experts on residential installations.
The company counts of NABCEP certificated and A+ BBB accreditation. Even so, they are a Tesla Powerwall certified installer, SolarEdge partner, and LG silver PRO partner.
Groundhog Solar is a small local company in Pennsylvania that receives and spotlight by their customer reviews and low-cost solar systems and installation.
Been funded in 2010, the company counts with enough experience to handle any residential solar project. And being a small local company their teams has the best technical expertise for local installations in Pennsylvania.
They work with different brands for their projects, including SMA, Enphase, and Schneider Electric for main electrical equipment, and Rolls and LG Chem for storage battery-backed systems.
Funded in 1999, Pennsylvania Solar Energy Company is also a small local, family-owned solar installer company that counts with over 8 MW of solar installations across the state.
They offer consulting and design services tailor-made for your home. Furthermore, the company specializes in roofing making them one of the best options for residential installations. Additionally, the company offers different financing options for its solar PV and storage systems.
They have a BBB accreditation of A+ since 2013, certifying their business structure. While as for the technical aspect they are an Enphase platinum-certified installer.