Home solar isn’t essential to home electrification, but for those with the financial means, it offers environmental and budgetary benefits, says Cora Wyent, senior director of research at the electrification nonprofit Rewiring America.
“We’re trying to switch our whole grid to renewable electricity, and anywhere we can convert to solar is good,” Wyent says. “You’re basically getting free electricity from your roof.”
Really, though, free?
According to Alon Abramson, vice president of residential programs for the Philadelphia Energy Authority (PEA), solar panels are indeed products that quite often pay for themselves — at least on a long enough timeline.
In Abramson’s experience, the finances “pencil out” for the majority of homeowners, even those with low incomes. The hefty up-front costs of solar panels (an average of $23,000 to $33,000 in Pennsylvania, depending on tax incentives, according to EnergySage) are typically recovered by the 15-year mark, and solar panels should last about 25 years. For those who can’t afford to pay up front, providers have loan and lease options that still provide a return on investment, Abramson says.
Established by the Nutter administration in 2010, the PEA is a quasi-City agency with a large portfolio of “energy affordability and sustainability” programs. One of those is Solarize Philly, which connects Philadelphians interested in home solar to a number of solar panel installation companies. According to Abramson, the providers have been vetted by the City, including a review of the quality of their work and price rubrics to ensure they’re within industry norms.
“We know these are legitimate enterprises and not just fly-by-night,” Abramson says.
Not yet a solution for all
Unfortunately, anyone who receives public assistance to help pay for their energy bills probably wouldn’t benefit from rooftop solar because financing the panels would add to overall monthly costs. Renters would understandably be disinclined to make a huge capital investment in real estate they don’t own, especially if they don’t pay their electric bill.
From an environmental standpoint, it is concerning that Abramson says his agency is actively discouraging some rental property owners from installing rooftop solar. The reason? Switching electric bills from tenant- to landlord-paid could result in some tenants losing public assistance and actually paying more per month for energy.
The threat to solar from Trump
Perhaps the biggest looming question is the potential elimination of federal tax incentives under the Trump administration. Presently, the IRS offers a 25D rooftop solar tax credit, which allows an uncapped 30% tax credit for solar installation, saving the typical homeowner about $10,000. Abramson says that while elimination of this credit would prove detrimental to those interested in rooftop solar, it wouldn’t necessarily be a deal-breaker. The investment would likely still be worth it for many, although the overall savings would be less.
Check your roof first
Abramson says it’s important for homeowners to consider the age of their roof before solar panels are installed because it is costly to disassemble a solar array if the roof beneath needs to be replaced. Those with a roof installed in the last five years are probably good to go, and those who know they’ll need a new roof within the next five to 10 years would be wise to wait to install solar. For everyone in between, or those who aren’t sure, a trustworthy roofer or solar installer should be able to assess the condition of the roof and help make a determination.
Federal tax credits
The IRS offers tax incentives for home solar installation through the 25D Residential Clean Energy Credit. It offers the credit for homeowners who install solar panels through 2032. Homeowners cannot, however, receive a credit greater than the amount of their owed income tax: a homeowner who is eligible for $10,000 in solar tax credits but only owes $5,000 in income taxes can only receive $5,000 in credits.
The 25D credits can also be used to cover the costs for battery storage technologies, geothermal heat pumps and solar water heaters. In order to obtain the credits, homeowners must file an IRS Form 5695 with their returns.
Solar renewable energy credits
In many states across the country, energy companies and grid operators pay a credit to solar producers as part of climate-mitigation efforts, known as the Solar Renewable Energy Credit. In Pennsylvania, homeowners with solar are eligible to receive $35.50 for every 1,000 kWh of energy their solar system produces as of December 2024, according to EnergySage. Such credits can add up to hundreds of dollars a year, a significant part of a homeowner’s return on investment.
For a time, the PEA offered solar rebates. The program is currently unfunded and thus not active, but applications are still being accepted in case funding resumes. See phila.gov/programs/solar-rebate-program.
To get started, visit solarizephilly.org, fill out an interest form and attach an energy bill. The program will connect you to a provider to begin the quote process.
