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Discover how Pennsylvania’s solar incentives can help companies combat the historic energy rate increases occurring in the PJM region
Increased Commercial Energy Rates
Pennsylvania and the PJM Energy Region (Ohio to DC, and down through Virginia) have just seen one of the largest rate hikes in recent history. The 13 US states, along with Washington DC have just seen capacity prices leap from $28.92 per megawatt-day (MW-day) in 2024/25 to $329.17/MW-day in 2026/27 – a more than 10-fold increase (link). This significant increase is largely driven by the increase of data center production in the area, along with four other structural factors, with all energy customers paying the bill.
Switching to solar energy is not just environmentally responsible, but also financially savvy. Pennsylvania offers full retail net metering, which means that any surplus energy your solar system generates and exports to the grid is credited at the same rate as your retail energy cost. This can significantly reduce your current energy bills and is optimal for solar systems. In addition, with double digit percentage electric rate increases forecasted in future years, solar system is a clear way to hedge against escalating costs and predict your future cost exposure.
OnSwitch SkyQuotes for Pennyslvania projects ranging from 500kW to 1500kW shows simple paybacks in the 4-6 year range for systems purchased with CAPEX, and 10-25% Year 1 savings for systems offered under Power Purchase Agreements (PPAs) with no customer money out of pocket.
Additional Benefits of Going Solar in Pennsylvania
Under Pennsylvania’s alternative energy portfolio standards (AEPS), utilities are required to generate a certain amount of solar energy. In order to achieve this goal, the Keystone State has created The Alternative Energy Credit Program, which is Pennsylvania’s solar renewable energy credit (SREC) program.
Companies with on-site solar systems earn one SREC for each megawatt-hour (MWh) or 1,000 kilowatt-hours (KWh) of clean electricity produced by your system. These SRECs can be sold to your utility company to count towards their alternative energy goals. SREC prices vary, but companies can currently plan to earn $30-$40 per SREC.
For example, a 50,000 sq ft roof supporting a 500 kilowatt solar array producing 600,000 kWh annually can earn around $21,000 from SRECs in the first year alone, with continued earnings over the system’s 25+ year lifespan. This financial benefit, combined with reduced operating costs and protection against escalating utility rates, makes solar a highly attractive option for businesses in Pennsylvania.
Utility incentives & Grants
Additionally, most utility companies in PA are offering specific incentives for businesses that install solar. These incentives are paid in addition to the State and Federal incentives commercial may qualify for. See the table below to find out if your business location qualifies for these Utility-based incentives. These incentives are subject to certain caps, and must pass a cost-effectiveness screening, but can really help system economics.
| Utility Company | Incentive Structure |
|---|---|
| PPL | $0.08/kWh |
| PECO Energy Company | $0.10/kWh |
| Pennsylvania Power Company (Penn Power) | $0.05/kWh |
| Pennsylvania Electric Company (Penelec) | $0.05/kWh |
| West Penn Power / Alleghany | $0.05/kWh |
| Metropolitan Edison Company (Met-Ed) | $0.05/kWh |
| Duquesne Light Company | $0.08/kWh |
Finally, all commercial solar systems installed in Pennsylvania will also qualify for the federal Solar Investment Tax Credit (ITC). This tax credit can reduce your solar system’s total project cost by 30% to 60%, depending on eligibility. However, starting on Jan. 1 2026, new restrictions on supply chains sourcing from foreign entities of concern (FEOC) will prevent projects with equipment provided by these countries from receiving the ITC credit. This will potentially increase supply chain costs as supply can become constrained and compliance costs increase.
On top of all this, even more specific and lucrative grant opportunities can be available for certain customer types, under state grant-making agencies encouraging local manufacturing and job creation.
Flexible Financing Options: From Capital Purchase to PPAs
Many solar financing companies offer flexible financing options to make solar energy accessible to businesses of all sizes. The most popular option is the Power Purchase Agreement (PPA), which allows large energy users to simply pay a set rate lower than their current electricity cost without any capital investment. This can generate savings of 10% to 40%, depending on usage and utility rates. The solar financing company owns and maintains the system, ensuring optimal performance over a 20-25 year period, which simplifies the long term value proposition to the building owner.
For companies with available capital, purchasing a solar system can provide an excellent return on investment. Purchased systems usually pay for themselves in 3-5 years and can offer free energy for 20-22 years after breakeven. Additionally, companies can directly benefit from the Federal Investment Tax Credit and enjoy long-term savings. OnSwitch also offers leasing options for certain buildings, providing monthly payments for roof space utilization.
Why OnSwitch is Your Ideal Partner for Solar Projects
OnSwitch stands out as a premier partner for solar projects, especially for businesses in the manufacturing sector. With over 20 years of experience and more than $1 billion in solar projects developed by our team, OnSwitch has the expertise to deliver high-quality solar solutions. Our proprietary SkyQuote technology offers accurate solar designs, contract-ready proposals, and detailed cost savings analysis, making the evaluation process straightforward and efficient.
We have a proven track record in installing solar systems for various commercial buildings, including retail chains, manufacturing facilities, and logistics centers. Named a Top Solar Contractor in 2023 by Solar Power World, OnSwitch is committed to providing sustainable, cost-effective energy solutions tailored to your business needs.
Is my Company’s Site a Good Candidate for Solar?
The fastest and most accurate way to find out if your commercial location is a good prospect for solar is to request a custom SkyQuote from OnSwitch. Just submit your commercial address on our website and we will design a system layout, PPA Option (Power Purchase Agreement), and a Purchase option specific to your building. This usually takes a matter of hours for most locations.
If you have more than one location you’d like to consider for solar, we can quote multiple sites and create a SkyPlanner. This is an online portfolio where you and your team can review and compare multiple project details in one place.
Have questions? Send us a message (info@onswitchenergy.com) and we can setup some time to discuss your building and answer any questions you may have.
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