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An arrow graphic shows that Pennsylvania's alternative energy portfolio standard is set at 18% in 2020-2021.

Carve-out: 0.5% of retail sales by 2020
Tracking system: PJM-Generation Attribute Tracking System (PJM-GATS)

Pennsylvania divides its Alternative Energy Portfolio Standard into two tiers based on energy resource type. Investor-owned utilities (IOUs) and retail suppliers must source 8% of their retail sales from Tier 1 resources and 10% from Tier 2 resources by 2020-2021. PV resources are included under Tier 1, but Pennsylvania has also established a separate 0.5% carve-out for PV. Pennsylvania has one of the few competitive solar renewable energy certificate (SREC) markets in the country, stemming from its solar carve-out. Solar alternative compliance payment is a large driver for build-out in the state. In 2016, the Public Uility Commission made changes to its net metering rules for system capacity, allowing customers to net meter up to 200% of their annual consumption.

Net Metering

IOUs in Pennsylvania must offer retail customers net metering for systems ranging from 50 kW to 5 MW depending on the off-taker and system type. Other electricity suppliers have the option of providing net metering, but are not obligated to.

System size limit: 200% of a customer's annual consumption

Aggregate cap: Not specified

Credit: Utility retail rate

RECs: Customers retain ownership of renewable energy certificates (RECs).

Meter aggregation: Virtual meter aggregation is allowed for customers within two miles of the generation facility.


Pennsylvania's interconnection standards apply to IOUs and cover four levels of systems up to 5 MW in capacity. All interconnection requests must adhere to the technical standards set forth in the Institute of Electrical and Electronics Engineers (IEEE) Standard 1547 and U.L. 1741.

Eligible Systems Type of Interconnection
Inverter-based systems up to 10 kW Level 1. Interconnection equipment must be certified; application fee of $100.
Inverter-based systems ≤2 MW that do not qualify for Level 1 Level 2. Interconnection equipment must be certified; application fee of $250, plus $1.00 per kW of the facility's nameplate capacity. Customer-generators are required to cover any costs associated with minor modifications to the utility's distribution system. Level 2 includes interconnection requests to a radial distribution circuit or spot network serving an individual customer.
Systems ≤2 MW that do not qualify for Levels 1 or 2 Level 3. Application fee of $350, plus $2.00 per kW of the facility's nameplate capacity. Customer-generators are responsible for any of the utility's fees associated with accommodating the interconnection.
Systems that do not qualify for Levels 1–3 and that do not export power to the grid Level 4. Has the potential to be an expedited interconnection review. An application fee of $350, plus $2.00 per kW of the facility's nameplate capacity will be applied.

System size limit: 5 MW

Liability insurance: No liability insurance is required

External disconnect switch: Required

Third Party Ownership

Third party solar power purchase agreements are allowed in Pennsylvania.

Community Solar

Virtual net metering is allowed, enabling community solar projects to take place. Utilities and developers offer community solar programs in Pennsylvania.

State Incentive Programs

Program Administrator Incentive
Sustainable Energy Fund Statewide Sustainable Energy Board (plus individual administrators oversee each of the four independent funds) Pennsylvania established four different Sustainable Energy Funds to support renewable energy development as part of the restructuring process for the state's five major utilities, which began in 1996. To date, $20 million in loans and another $1.8 million in grants have been has been allotted to projects. While new revenue is not currently being invested in the funds, they are being transitioned to revolving loan and investment funds.
Solar Alternative Energy Credit (SAEC) Program Pennsylvania Public Utility Commission (PUC) (selection of new administrator in-process) Pennsylvania established a statewide solar alternative energy credit (SAEC) (equivalent to a solar renewable energy certificate, or SREC) under which one credit equals 1 MWh of solar PV-generated electricity. Although the trading price varies widely based on market conditions, the minimum incentive is set at $0.04/kWh.
Solar Energy Program (SEP) Pennsylvania Department of Community and Economic Development, Department of Environmental Protection, and Commonwealth Financing Authority Pennsylvania's Solar Energy Program is undergoing revisions and is currently not accepting applications; however, once it resumes, the SEP will provide financing incentives to promote solar energy generation and manufacturing.

Utility Incentive Programs

Under the umbrella of the Sustainable Energy Fund noted in the State Incentive Programs section above, four Pennsylvania utilities (West Penn Power Company, Metropolitan Edison Company, Pennsylvania Electric Company, and PECO Energy) maintain individual sustainable energy funds to support renewable energy development within their service territories through grant and loan programs.


The list below provides some resources for each type of policy or program. Please reference and contact relevant authorities and local utilities for the most up-to-date and accurate information on state and utility policies and incentive programs.

Renewable Portfolio Standard

Net metering and interconnection

Programs and incentives