How To Qualify Your Business for the PECO Incentive for Commercial Solar

The PECO incentive for commercial solar pays your business $0.10 for every net kWh your solar system produces over a one-year period, and it's one of the most direct financial incentives available to commercial and industrial property owners in southeastern Pennsylvania right now.

This guide breaks down who qualifies, how the incentive is calculated, how it stacks with other programs, and what excess solar production means for your bill.

We'll also walk through net metering, the interconnection application process, and what to expect in terms of payments and timing.

TL;DR

• PECO pays commercial/industrial customers $0.10 per net kWh of solar produced, capped at the total project cost.
• All non-residential customers qualify: businesses, non-profits, schools, industrial facilities.
• To apply: get a recent utility bill, hire a solar installer, submit specs and an interconnection agreement.
• PECO measures production over 6+ months, including one summer month, using PVWatts/NREL data.
• Stack it with other savings: 30% federal Investment Tax Credit, Philadelphia Solar Rebate ($0.10/watt, up to $100K), and a $400 PECO credit for a second meter.
• Combined incentives can cut project costs by 35-40%.

• Excess power goes back to the grid via net metering and rolls over as bill credits.
• Unused credits settle once a year, every May 31.
• No published application deadline, but funding runs in phases. Apply early.

What Is the PECO Incentive for Commercial Solar?

On June 1st of 2023 PECO introduced a new incentive program for PECO’s commercial and industrial customers to embrace solar energy. Along with recently enacted legislation that offers 30-70% federal tax credits for installing solar.

This program introduces a PECO solar incentive of $0.10/kWh, which is based on the net solar kWh production over a one-year period. It's worth noting that this incentive is capped at the project cost, allowing businesses to maximize their financial benefits while reducing electricity costs and increasing their ESG rating.

In other words, the more your system produces, the more you receive — up to the total cost of your project. The incentive applies on top of any federal tax credit you already qualify for, which means it can meaningfully reduce what you pay out of pocket to go solar.

You might be wondering...

"That sounds great, but what steps do I need to take to understand if this incentive is financially significant enough to consider taking action on for my business?"

Step one is to obtain a recent PDF copy of your businesses utility bill. Step two involves finding a solar contractor in your area who will handle 90% of the workload. Once you identify and contact a local solar company like TerraSol Energies Inc., they will assist you in providing a scope of work with estimated project costs to PECO.

They will also provide you with the manufacturers' specification sheets for qualifying equipment and offer an estimation of energy savings. Lastly, they will secure your interconnection agreement.

You might then wonder

"How is the pre-approval amount for the incentive determined?"

The pre-approval amount is based on PVWatts, an online calculator developed by the National Renewable Energy Laboratory (NREL) in the United States. PVWatts is widely used to estimate the electricity generation potential of a photovoltaic (PV) system, commonly known as solar panels, at a specific location.

PECO will estimate the amount of energy being fed back into the grid. The incentive is calculated based on a minimum measurement period of six months, including at least one month from June through August.

If this sounds complex, don't worry, as a local solar developer like TerraSol Energies will facilitate your interaction with PECO, automating the entire measurement and verification process.

Ask our experts for a custom solar proposal.

Who Qualifies for This PECO Incentive

All non-residential customers in PECO's service area qualify, including for-profit businesses, non-profits, schools, and industrial facilities. To get pre-approved, your project qualifies once you provide:

• A recent copy of your utility bill (PDF works fine).
• Solar production trend data, generated using PVWatts, a free online calculator built by the National Renewable Energy Laboratory (NREL).
• Manufacturer specification sheets for the equipment you plan to install.
• A signed interconnection agreement with PECO.

A local solar installer — like TerraSol Energies, the top-ranked commercial and industrial solar installer in PECO's territory. Typically handles most of this on your behalf.

How to Apply for the PECO Solar Incentive

1. Pull your utility bill. Get a recent PDF copy of your PECO bill.
2. Connect with a solar contractor. A qualified commercial solar provider will scope your project, estimate costs, and prepare your documentation.
3. Submit your solar interconnection application. Your installer submits this to PECO along with equipment specs and energy production estimates.
4. Comply with technical and safety requirements. PECO reviews your system to confirm it meets grid connection standards before approving it.
5. Receive approval and get installed. Once approved, installation can move forward and your system gets connected to the grid.
6. Track production for the measurement period. PECO measures your net solar production over a minimum six-month period, including a summer month, to calculate your final payment.

How PECO Calculates Your Pre-Approval Amount

PECO uses PVWatts to estimate how much energy your system will feed back to the grid. PVWatts is the federal government's standard solar production calculator, built by NREL and widely used across the solar industry to model expected output for a given system size, location, and roof orientation.

A local installer can automate this part of the process, which removes most of the manual work from your end. You provide the bill and the property details; they handle the rest, including the back-and-forth with PECO.

How Much You Can Save When You Combine Incentives

The PECO incentive doesn't have to work alone. Combined with other federal, state, and local programs, commercial solar incentives can reduce total project costs by an estimated 35-40% when stacked together. Here's what's available to combine with PECO's $0.10 per kWh:

• Federal Investment Tax Credit (ITC): A 30% federal tax credit applies to commercial solar equipment under the Inflation Reduction Act, with potential bonus credits for projects in qualifying energy communities or those meeting domestic content requirements.
• Philadelphia Solar Rebate: If your property is in Philadelphia, the Philadelphia Energy Authority administers a separate rebate of $0.10 per watt for commercial solar projects, capped at $100,000 per project.
• PECO's second-meter credit: PECO will credit up to $400 toward the cost of installing the second meter required for net metering.

Example: A 200kW commercial system that costs $400,000 to install could receive roughly $120,000 from the 30% federal tax credit, plus PECO's per-kWh incentive based on actual production, plus the Philadelphia rebate if the property qualifies.

Combined, these incentives commonly bring total project costs down by more than a third, turning a six- or seven-year payback period into something considerably shorter. Your installer can run the exact numbers for your property using a real production estimate, not a generic example.

Net Metering: What Happens to Your Excess Solar Production

Once your system is online, PECO allows your business to send excess electricity back to the grid through net metering, and you receive bill credits equal to the value of that excess energy.

A few things to know:

• Excess credits roll over and can offset future energy bills throughout the year.
• At the end of each net metering year, May 31, PECO compensates customers for any remaining excess kWh based on average generation pricing for your rate class, with no cap on how much excess generation PECO will purchase.
• Residential systems are capped at 50kW for net metering purposes. Non-residential systems have a much higher cap, so most commercial and industrial projects have plenty of room to grow without hitting a ceiling.

If this sounds like a lot to track, it isn't something you manage manually. PECO and your installer handle the metering and crediting process automatically once your interconnection application is approved.

How This Stacks with Other Pennsylvania and Delaware Programs

PECO's incentive is part of a broader push across the region to make commercial solar more affordable. A few related programs worth knowing about:

• Pennsylvania businesses have access to additional state-level solar updates and incentives, including bonus depreciation and SREC value.
• Businesses that prefer financing over a cash purchase can review the financial advantages of commercial solar financing to see how loan structures compare.
• Delaware non-profits and public entities have separate options through Energize Delaware's grant program.
• Farms and agricultural operations have their own path through farm solar financing options, including USDA REAP funding.

These programs are not exclusive of each other. A property owner can often qualify for PECO's incentive, the federal tax credit, and a state or local program at the same time.

Real Commercial and Industrial Projects in PECO Territory

If you want to see what this looks like in practice, a few examples are worth a look:

• TerraSol's 1MW solar project with Phoenix Contact shows what a large industrial installation looks like end to end.
• The Sycamore International solar-plus-storage project was the first solar-plus-storage system installed in the PECO region under this incentive program.
• Auto dealerships across the region have used solar to offset one of their highest fixed costs: energy.
• Millersville University's net-zero energy building is a useful reference for institutional and educational properties.

The key takeaway

There's no cost to find out what this incentive is worth for your property. Send your PECO bill to TerraSol Energies, and we'll run the numbers using your actual usage data. Not a generic estimate.

The businesses that lose out aren't the ones that go solar, and it doesn’t pencil out. They're the ones who never asked. If your facility is in PECO's service territory, the PECO incentive for commercial solar is worth a serious look before you decide either way.

Frequently Asked Questions

Does my non-profit qualify?

Yes. PECO’s incentive applies to all non-residential customers, including non-profits, schools, municipalities, and for-profit businesses alike.

Can I combine the PECO incentive with the federal tax credit?

Yes. The $0.10 per kWh incentive is separate from the 30% federal Investment Tax Credit, so most commercial projects qualify for both.

How long does PECO measure my production before paying out?

A minimum of 6 months, with at least 1 month between June and August.

What if my system produces more energy than I use?

That excess energy is fed back to the grid through net metering, and you receive bill credits. Any remaining balance is settled on May 31 each year.

Is there a deadline to apply for the PECO incentive?

PECO's incentive program does not currently have a published end date, but incentive programs like this are typically funded in phases. Submit your interconnection application as early as possible to lock in your pre-approval terms.