Pennsylvania’s Expanding Solar Incentives and Net Metering Opportunities

An Interview with Jeff Beavan, PE

For a long time, the incentives available for solar energy in Pennsylvania were outweighed by the low electricity costs, thanks to the abundance of natural gas generation stations. This dynamic made solar energy an impractical choice.

However, recent regulatory and policy updates have made solar energy more financially viable in Pennsylvania. Expanded regulations for virtual net metering and recent changes by the Pennsylvania Public Utility Commission (PUC) have removed previous barriers for solar developers and operators.

Virtual net metering now allows solar farms to be located away from the user’s property, as long as they are within the same utility service area. Previously, regulations required these farms to be within a two-mile radius of the user. The new rules offer greater flexibility.

Additionally, the use of large-scale net metering has been modified. Solar facilities up to 3 megawatts (MW) can now sell power back to the grid at the retail generation rate instead of the wholesale rate, without needing to tie this generation to on-site demand.

As a result of these new regulations, there has been an increase in solar developers exploring sites up to the 3 MW limit allowed under the large-scale net metering program.

We spoke with Jeff Beavan, Associate and Branch Manager of Bohler’s Lehigh Valley office, to discuss the growing opportunities for solar providers across the state.

Virtual net metering is a relatively new concept in solar power. What are some of the best use cases for this type of solar energy?

We recently completed a successful project with EDF Renewables and Lehigh University. They installed a 7,100-panel array on a 16-acre site, which will fully power the university’s Goodman athletic campus with clean, renewable energy.

Other ideal locations include industrial and commercial sites that can use these facilities to offset peak demand or reduce overall electrical rates. These installations can be either on-site, using excess land, or off-site in more rural areas.

Site for future solar field at Lehigh University

Additionally, pending legislation for community solar offers a promising solution for residential users. Community solar involves larger, more efficient solar fields rather than individual roof-mounted systems. The electricity generated is sold back to subscribers of the community solar system. Although this legislation has been introduced before, it has recently gained traction recently with State Senate Bill SB1227.

In terms of site selection, what kind of properties work best for virtual net metering?

Relatively open properties, such as farm fields, are ideal. Typically, a site of 10 to 20 acres is needed for a 3MW array.

It’s also important to have the ability to connect to three-phase power within a reasonable distance. Three-phase power lines can transmit more power and do so more efficiently than single-phase infrastructure.

Finally, the site should have south-facing topography to ensure the solar panels receive maximum sunlight throughout the year.

What other recent changes have expanded solar development opportunities in PA?

 One significant change in Pennsylvania is the expansion of the large-scale net metering program. Now, solar facilities up to 3 MW in size can sell power back to the grid at the retail generation rate instead of the wholesale rate.

Previously, PUC policies from the 2012 Net Metering Policy Order limited net-metered solar system sizes to 110% of consumption for interconnected customers, either on-site or through virtual net metering, to prevent merchant generation.

However, in 2022, following a challenge in the Commonwealth Court, PUC rule changes quietly removed this 110% requirement. This allows third-party operators to build arrays up to 3 MW in rural areas without any demand requirement and sell the generated electricity to the utility at or near the retail rate.

Jeff Beavan, PE, Associate and Branch Manager

What are the challenges associated with developing a solar field?

 Zoning presents a significant challenge, as many zoning ordinances were not designed with large-scale standalone solar facilities in mind. Each municipality handles the use of these facilities differently—some permit them, some prohibit them, and some do not address them at all.

If a zoning ordinance does not mention solar facilities, the permitting process may require a use variance, special exception, or conditional use as specified in the ordinance or the PA Municipalities Planning Code. Ideal locations for solar development, such as rural and agricultural areas, often lack updated ordinances addressing solar projects.

See related: Maintaining Momentum through Permitting and Entitlements

Therefore, a large part of the approval process involves educating the municipality, emergency responders, and the public about issues related to noise, glare, and stormwater runoff. Conducting due diligence on municipal guidelines and site encumbrances is essential for understanding the permitting process and timeline. Early communication with municipal officials and public education are also critical for project success.

What are the incentives that are making this type of development attractive?

Pennsylvania offers several enhanced incentives that benefit solar development. These include a 30% to 40% tax credit for installation, depending on the energy community location, and the expanded ability to work beyond the previous two-mile radius requirement, allowing projects to be located anywhere within the utility provider’s service area. Additionally, the large-scale net metering program is a key incentive.

Where do you see the biggest opportunity for solar development?

There are numerous opportunities for solar development across the state, particularly on existing farmland, mine reclamation land, and sites that can offset peak-demand generation facilities.

One promising area is agri-solar or dual-use farming, where solar panels are installed over grazing livestock like sheep. This approach works well for sheep and serves as a low-impact maintenance option. However, integrating other animals like cows or goats can lead to system damage.

Ready to move forward with a solar project in PA? Connect with Jeff.