Pennsylvania Solar Incentive Programs

The state of Pennsylvania offers many incentives for converting to solar energy.  Among the most cost-effective are grants and rebates, and numerous of these are available in the state.

Summary of Pennsylvainia Incentive Programs

•State Tax Rebate $1.75-$2.25
•Numerous Available Grants

Federal Incentives

Federal Investment Tax Credit (ITC)

Commercial solar energy systems can take advantage of the Federal Investment Tax Credit 48E, which provides a tax credit of 30% of the total cost of the system, provided prevailing wage and apprenticeship requirements are met. 

Residential systems can no longer claim any federal solar tax credit, as the One Big Beautiful Bill eliminated it for systems installed after January 1st, 2026. 

Commercial Depreciation

Commercial asset owners can write off 100% of a project’s value in depreciation in the first year. The One Big Beautiful Bill reinstated the 100% bonus depreciation, while simultaneously eliminating the Modified Accelerated Cost Recovery System (MACRS) that previously depreciated solar energy systems over 5 years. 

The depreciable basis of a project is reduced by half of the ITC value when combined with the 30% ITC. Here’s a quick example:

• Project cost = $800,000
• 30% credit = $240,000
• Reduced depreciation basis: $800,000 – ($240,000 / 2) = $680,000

A company’s tax rate is then taken into account to calculate the exact amount they’re able to write off. 


Pennsylvania Grants and Rebates

Pennsylvania administers the DCED – High Performance Building Incentives Program which provides a grant in the amount of 10% of project costs or $500,000, whichever is less, and also provides grants in the amount of $5000 per job created within three years.  This program is available for both commercial and residential applications. High Performance Green Schools Planning Grants offers 10% of costs for building or renovating solar systems. Pennsylvania Energy Development Authority (PEDA) – Grants are available for commercial and industrial applications to $1.5 million, with some cost share.  Pennsylvania Energy Harvest Grant Program offers programs for schools, governments, and institutions.  PPL Electric Utilities offers grants to reimburse non-profits, construction companies, architects, and designers for achieving LEEDS certification in new projects, up to $10,000.   There are also two grant programs administered in First Energy areas, one for all sectors, and one strictly for commercial and public sectors.

There is a rebate program provided by PA Home Energy (West Penn Power) up to $1000.

Financing Options

Programs provided by the Department of Community and Economic Development (DCED) and the Department of Environmental Protection (DEP) provide up to $5 million for solar projects. Many other loan programs are available through the different utility companies.  Additional resources for financing are also available through the federal government.

Visit the DSIRE:Database of State Incentives for Renewables & Efficiency for further details.