Report: PA still has time to capture billions in federal solar tax credits

Researchers said Pennsylvania still has time to capture billions in federal solar incentives but they are close to slipping away.

Solar capacity has grown sixfold since 2019 but expansion is still needed to maximize Inflation Reduction Act tax credits, according to the Keystone Research Center’s “Use It or Lose It” report.

Stephen Herzenberg, economist at Keystone Research Center, said most projects awaiting grid connection are solar and maintaining momentum is key to avoiding electricity shortages and price spikes. He stressed Pennsylvania needs commercial and grid-scale projects to capitalize on federal tax credits established in 2022 before they expire.

“If Pennsylvania organizes a successful fire drill to maximize federal tax credits for solar, we can bring $2.5 billion in tax credits and over $8 billion in total investment into the state,” Herzenberg pointed out.

Herzenberg explained completing just half the projects already queued for grid connection would add 6.5 gigawatts of solar, tripling the state’s already growing capacity. He added seizing the solar opportunity in Pennsylvania will benefit consumers across the state and workers, especially in rural areas, where most big projects are built.

“Our report spells out how to organize a fire drill and team effort to maximize the tax credits through smart joint action by the governor, legislature, public utility commission, utilities, electric grid, industry experts, and unions that build much of our solar,” Herzenberg outlined.

Herzenberg noted last year’s “One Big Beautiful Bill Act” did not end tax credits for renewable energy; it only shortened some timelines. Projects starting construction by early July have four years to become operational. He emphasized with electricity prices rising and signs of a possible economic slowdown, it is critical to take advantage of tax credits when they still exist.