Is Solar Still Worth It in PA Without the Tax Credit?

Is solar still worth it in PA without the tax credit? Yes, and the reasons come down to math. The federal solar tax credit expired on December 31, 2025, ending a 30% reduction on federal income taxes for homeowners who purchased a solar system outright.

That change caught a lot of Pennsylvania homeowners off guard, and if you were counting on that credit, it's fair to ask whether a solar panel system still pencils out.

The Trump administration’s One Big Beautiful Bill Act (OBBBA) eliminates clean energy tax incentives on an aggressive timeline. Tax credits that would previously have been available in 2032 are now ending as soon as this month.

So, what should homeowners expect heading into 2026?

Below, we break down what changed, what's still available, and what the real numbers look like for a residential solar installation in Pennsylvania today.

TL;DR

• Yes, solar is still worth it in Pennsylvania even without the federal 30% solar tax credit, which expired for purchased residential systems on December 31, 2025.

• Pennsylvania does not offer a statewide solar rebate or property tax exemption, and solar purchases are subject to a 6% sales tax.

• Rising electricity rates in Pennsylvania make solar increasingly valuable because every kilowatt-hour generated offsets more expensive utility power.

• For most homeowners, the payback period is expected to be only about one year longer than it was when the federal tax credit existed.

Is Solar Still Worth It in PA Without the Tax Credit?

Short answer: yes. Pennsylvania still has strong net metering rules, a working SRECs (solar renewable energy certificates) market, and solar leases that route around the lost credit entirely.

None of these incentives replaces the old 30% federal solar tax credit dollar for dollar. But combined, they keep solar costs in a range where most homeowners still save money over the life of the system.

How Are Federal Clean Energy Incentives Changing?

The Inflation Reduction Act (IRA) created historic opportunities for affordable clean energy upgrades when it was enacted in 2022. However, the One Big Beautiful Bill Act (OBBBA), passed by President Trump and the current majority in Congress, is rolling back incentives for everything from electric vehicles to heat pumps, geothermal systems, solar panels, and home weatherization.

These are effective home energy upgrades that help Americans lower their energy bills and reduce their carbon footprint.

As a result, many homeowners are asking: with major federal tax incentives going away by 2025, does it still make sense to go solar in 2026?

What Happened to the Federal Solar Tax Credit

For years, the federal solar tax credit; also called the residential solar tax credit or investment tax credit (ITC) — let homeowners deduct 30% of the total solar installation cost from their federal income taxes.

The credit was strengthened under the Inflation Reduction Act and applied to solar panels, solar equipment, wiring, and even a solar battery added during the original installation. Our post on taking advantage of the solar energy tax credit covers how the credit worked while it was still active.

That changed with the federal budget bill passed in mid-2025. The residential 30% credit (Section 25D) expired on December 31, 2025. If you installed and activated your solar energy system before that date, you can still claim the credit on your 2025 tax return using IRS Form 5695.

If your system goes in after that date, the credit no longer applies to a purchased solar system. To understand the mechanics behind the panels themselves, see why understanding how a solar panel works helps you save more.

One distinction matters here: the commercial tax credit (Section 48E) did not disappear. It still applies to solar leases and power purchase agreements (PPAs) through 2027, because those arrangements are structured as commercial transactions where a third-party company, not the homeowner, owns the equipment and claims the credit.

Why Going Solar Still Makes Sense in 2026

The answer is yes. Solar remains one of the most rewarding long-term investments a homeowner can make in 2026 and beyond. The solar industry has proven itself to be resilient and adaptive, even as incentives change, costs decline, and benefits continue to grow. 

Today, solar innovation is accelerating, installations are becoming streamlined and the path to energy independence has grown clearer.

Looking Back at the Impact of the Solar ITC

As we approach the end of the Solar Federal Investment Tax Credit (ITC) on December 31, 2025, it’s worth recognizing how far the industry has come since it was introduced in 2006.

Since the credit was released, the solar industry has grown more than 200-fold, driving down costs, strengthening supply chains, and making solar more accessible to homeowners.

What Still Saves You Money in Pennsylvania

Net Metering

Pennsylvania maintains favorable net metering policies for solar energy, and this is the incentive that does the most heavy lifting now that the federal credit is gone. Net metering in PA credits solar users at the full retail rate for any excess energy their system sends back to the grid.

Credits from net metering carry forward monthly, and net metering is mandatory for all investor-owned utilities in PA, including PECO and PPL. Unused net metering credits are trued up annually, meaning if you produce more electricity than you use over a full year, your utility settles the balance.

Pennsylvania's net metering policy benefits solar customers significantly compared to states where excess credits expire or get zeroed out at year-end. Combined with peak production hours during sunny months and a well-sized solar panel system, net metering alone can offset most of a household's monthly electricity bill.

Solar Renewable Energy Certificates

Pennsylvania also runs an SRECs program. Every time your system generates 1,000 kilowatt-hours of electricity, you earn one solar renewable energy credit.

Utility companies are required to buy a certain number of these certificates each year to meet the state's renewable energy standard, and that demand is what gives SRECs market value. Solar renewable energy certificates can generate passive income for solar owners in Pennsylvania, on top of the savings from lower electric bills.

Property Tax and Sales Tax

Pennsylvania does not offer property tax exemptions for solar systems, so adding panels can raise your home's assessed value and your property tax bill. Pennsylvania solar panels are also subject to a 6% state sales tax at the time of purchase.

Neither of these costs is large enough to offset the gains from net metering and lower electricity costs, but they're worth factoring into your total cost comparison.

How TerraSol is Preparing for the End of ITC

Looking ahead, TerraSol Energies is doubling down on partnerships with leading, cost-competitive suppliers. We’re finding innovators who can streamline our system design and reduce material costs, resulting in faster installations that are more affordable and built to last.

We also anticipate continued price reductions from manufacturers and remain committed to passing those savings along by keeping our margins fair, ensuring excellent payback periods that are only slightly longer than those available when the ITC was at 30%.

Why Rising Electricity Costs Make Solar More Valuable, Not Less

Electricity rates in the PECO and PPL service areas have been climbing, driven by rising utility rates tied to grid capacity costs and growing demand.

Rising electricity costs increase the value of energy generated by solar systems because every kilowatt-hour your panels produce is one you don't have to buy from the utility company at an increasing electricity rate.

Natural gas price swings also feed into this, since a large share of Pennsylvania's grid power still comes from natural gas plants.

This is part of why energy independence matters more now than it did when the federal solar tax credit covered 30% of the cost. A solar panel system locks in a big share of your energy costs against future rate hikes, which becomes more valuable every year utility rates climb.

For more on what's driving these increases locally, see our breakdown of why PECO is raising electric rates in 2026. Getting the most out of that locked-in rate also means getting the most out of your equipment.

Our guide on how to maximize your solar power system covers the adjustments that make the biggest difference. For the bigger picture on why solar fits into the regional grid's future, read why renewable energy is the future of the Mid-Atlantic grid.

What Homeowners Can Expect After the ITC

Even without the federal tax credit, most homeowners can still expect highly compelling payback — often just about one additional year compared to ITC-era systems — along with long-term protection from rising utility rates.

Solar continues to offer true energy independence and a unique opportunity to secure your family’s energy future.

Looking Ahead to a Bright Solar Future

Thank you for supporting a brighter future with TerraSol. We’re excited to help more homeowners discover how solar can work for them in 2026 and beyond.

How to Decide If Solar Is Right for You Now

A few questions help clarify whether solar in Pennsylvania still makes sense for your home:

• Are you buying or leasing? A purchased solar system no longer gets the federal tax credit, but you keep the SRECs and full ownership. A lease or PPA skips the credit math but still cuts your monthly bill from day one.

• How much sun does your roof get? Production during peak production hours drives your net metering credits. A site assessment from a qualified solar installer will confirm your roof's output potential.

• What's your current electric bill? If your monthly electricity bill is high and climbing, the payback period shortens.

• Do you want backup power? Pairing a solar system with a solar battery adds resilience during outages, though it adds to the upfront solar costs. Our guide to residential energy storage covers what that decision involves, and our write-up on a real off-grid solar project in 2022 shows what a fully battery-backed system looks like in practice.

• Do you care about your carbon footprint, not just your bill? Solar reduces both. If saving money and cutting emissions are both goals, our post on simple ways to save money and the planet lays out where solar fits alongside other changes.

If you're unsure how many panels your roof needs to offset your usage, our guide on how many solar panels you need walks through the sizing math step by step.

If you want to know what your specific home would produce and save under today's incentive landscape, request a custom proposal from TerraSol Energies.

We've installed residential solar installations across Pennsylvania, New Jersey, and Delaware since 2009, and we'll walk you through net metering, SRECs, and financing options so you can see the real numbers before you commit.

Call 888-873-9995 or request a custom solar proposal. Because the answer to "is solar still worth it in PA without the tax credit" depends on your roof, your utility, and your budget, and we can show you exactly where you stand.

Frequently Asked Questions

Did the federal solar tax credit really end?

Yes. The federal solar tax credit, also known as the residential solar tax credit or investment tax credit, expired for purchased systems on December 31, 2025. Systems installed and operating before that date can still claim the 30% credit on a 2025 tax return.

Can I still get any federal incentives in 2026?

Only through solar leases or power purchase agreements, where the third-party owner claims the commercial tax credit and can pass part of the value back to you as a lower rate.

Does Pennsylvania have its own solar incentives?

Pennsylvania's main state-level incentives are net metering and SRECs. There's no statewide rebate program and no property tax exemption for solar, though some cities and utilities run their own programs.

Is solar still worth it in PA without the tax credit if I'm planning to sell my home?

Yes. Homes with solar systems sell for 3 to 4% more than comparable homes without solar, on top of the electricity savings you collect while you live there.

How do I know if my roof gets enough sun?

A solar installer can run a shading and production analysis based on your roof's orientation and local peak sun hours. Our team at TerraSol does this as part of every free consultation.