Pennsylvania
Financial Incentives
Tax Benefits: Pennsylvania’s Alternative Energy Production Tax Credit Program provides a tax
credit of 15 percent of the net cost of projects related to the production of alternative fuels, as
well as the research and development of technology to provide alternative fuels.1 Wind turbines
and related equipment (including towers and foundations) may not be counted by tax assessors
when setting property values.2
Loan Programs: Businesses, multi-family residential homeowners, nonprofits, and government
entities are eligible for loans of up to $2.5 million for energy efficiency improvements made to
existing buildings.3 The Keystone HELP Energy Efficiency Loan Program provides up to
$35,000 to homeowners who improve energy efficiency through high-efficiency heating, air
conditioning, insulation, windows, doors, geothermal and “whole house” improvements.4
Pennsylvania also provides loans to small businesses for projects that reduce waste, pollution or
energy use.5
Grants: The Alternative Fuels Incentive Grant Program provides grants to companies, local
governments, schools, universities, and individuals who purchase AFVs or HEVs, or convert
conventional fuel vehicles to operate on alternative fuels.6 The Governor’s Green Government
Council of Pennsylvania provides incentives for new schools to be built according to green
building standards.7 Pennsylvania also provides 50 percent matching grants, up to a maximum
of $7,500, to enable small businesses to adopt or acquire energy efficiency or pollution
prevention equipment or processes.8
Rebates: The Pennsylvania Sunshine Program provides a total of up to $100 million in rebates
to individuals and small businesses for the installation of solar PV and solar thermal systems.9
Other Financial Incentives: Pennsylvania enacted a broad $650 million alternative energy bill
in 200810 to provide a variety of financial incentives, including loans, grants and loan guarantees
to businesses, nonprofits, economic development organizations, local governments, and schools
for alternative energy and clean energy projects,11 wind and geothermal energy technologies,12
and high performance buildings.13
Rules and Regulations
Renewable Portfolio Standard: Pennsylvania’s Alternative Energy Portfolio Standard requires
retail electricity suppliers to supply 18 percent of their electricity from alternative forms of
energy by 2020. Of that 18 percent, 8 percent must come from “Tier I” sources and 10 percent
must come from “Tier II” sources. Tier I sources include solar thermal, solar PV, wind, lowimpact hydro, geothermal, biomass, certain methane gas, and fuel cells. Tier II sources include
waste coal, DG systems, demand-side management that increases energy efficiency, large hydro,
municipal solid waste generation, wood pulping, and integrated gasification combined cycle
coal. Pennsylvania has also specified that 5 percent of the Tier I requirement must come from
solar PV by 2020.14
Facility Siting and Permitting: Pennsylvania has developed a model local ordinance for wind
energy facilities.15
Building Codes, Appliance, and Equipment Standards: Residential buildings in Pennsylvania
must comply with the 2009 IECC, the 2009 IRC or the 2009 Pennsylvania Alternative
Residential Energy Provisions. Commercial buildings must comply with the 2009 IECC and
ASHRAE 90.1 2007.16
Electricity Transmission, Interconnection and Storage: The Pennsylvania Public Utilities
Commission has adopted interconnection standards for net-metered systems and other forms of
DG up to 5 MW in capacity as required by the Alternative Energy Portfolio Standards Act. The
state’s IOUs must offer net metering to customers that generate electricity with renewable energy
systems. The individual system limit is 50 kW for residential customers, 3 MW for
nonresidential customers, and 5 MW for customers who make their systems available to the grid
during emergencies or where a microgrid is in place in order to maintain critical infrastructure. 17
Government Procurement: In December 2004, Governor Ed Rendell signed Executive Order
2004-12, which made a number of energy efficiency related requirements for state facilities,
including the requirement to procure Energy Star or other energy efficiency products when
economically feasible.18 Governor Rendell also set a goal of reducing energy use in state
buildings 10 percent from 2008 levels by 2010, and required state governments to purchase at
least 50 percent its total electricity from green sources, including solar, wind, geothermal, lowimpact hydro and biomass, by mid-2010.19
Policies, Plans, and Governmental Affiliations
Policies and Plans: Pennsylvania’s Climate Change Action Plan calls for a 30 percent reduction
in GHG emissions below 2002 levels by 2020 and outlines 52 recommendations for reducing
GHG emissions in the state.20 The Pennsylvania Climate Change Act also requires the creation
of a GHG inventory and the establishment of a voluntary GHG emissions registry.21
Government Entities: Climate Change Advisory Committee,22 Pennsylvania Department of
Community and Economic Development,23 Pennsylvania Department of Environmental
Protection,24 Pennsylvania Department of General Services,25 Pennsylvania Department of Labor
and Industry,26 Pennsylvania Department of Revenue,27 Pennsylvania Energy Development
Authority,28 Pennsylvania Public Utilities Commission.29
Regional Memberships: Pennsylvania is an observer of RGGI.
1
73 P.S. § 1649.701 et seq.
72 P.S. § 5453.201 et seq.
3
http://www.trfund.com/financing/energy/pagelf.html.
4
http://www.keystonehelp.com.
5
http://www.portal.state.pa.us/portal/server.pt?open=514&objID=553247&mode=2.
6
73 P.S. § 1647.1 et seq.;
http://www.portal.state.pa.us/portal/server.pt/community/alternative_fuels_incentive_grant-move_to_grants/10492.
2
7
24 P.S. § 25-2574(c.4);
http://www.portal.state.pa.us/portal/server.pt/community/schools/13838/funding_opportunities/588215.
8
http://www.portal.state.pa.us/portal/server.pt?open=514&objID=553249&mode=2.
9
House Bill No. 1 (2008);
http://www.portal.state.pa.us/portal/server.pt/community/grants_loans_tax_credits/10395/pa_sunshine_solar_progra
m/821790.
10
House Bill No. 1 (2008).
11
http://www.newpa.com/find-and-apply-for-funding/funding-and-program-finder/alternative-and-clean-energyprogram.
12
http://www.newpa.com/find-and-apply-for-funding/funding-and-program-finder/renewable-energy-programgeothermal-and-wind-projects.
13
http://www.newpa.com/find-and-apply-for-funding/funding-and-program-finder/high-performance-buildingprogram.
14
73 P.S. § 1648.1 et seq.; 66 Pa. C.S. § 2814 ; http://www.puc.state.pa.us/electric/electric_alt_energy.aspx.
15
Model Wind Ordinance for Local Governments.
16
http://www.portal.state.pa.us/portal/server.pt/community/uniform_construction_code/10524/ucc_codes/553803;
http://bcap-ocean.org/state-country/pennsylvania.
17
73 P.S. § 1648.1 et seq.; 52 Pa. Code § 75.21 et seq.; 52 Pa. Code § 75.11 et seq.;
http://www.puc.state.pa.us/electric/electric_alt_energy.aspx.
18
Executive Order 2004-12.
19
Press Release.
20
http://www.elibrary.dep.state.pa.us/dsweb/View/Collection-10677.
21
71 P.S. § 1361.1 et seq.
22
http://www.portal.state.pa.us/portal/server.pt/community/climate_change_advisory_committee/10412.
23
http://www.newpa.com/.
24
http://www.depweb.state.pa.us/.
25
http://www.dgs.state.pa.us/.
26
http://www.dli.state.pa.us/.
27
http://www.revenue.state.pa.us/.
28
http://www.portal.state.pa.us/portal/server.pt/community/peda-move_to_grants/10496.
29
http://www.puc.state.pa.us/.