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Incentives/Policies for Renewables & Efficiency

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Solar Energy Incentives Program   

Last DSIRE Review: 10/16/2012
Program Overview:
State: Pennsylvania
Incentive Type: State Loan Program
Eligible Renewable/Other Technologies: Solar Water Heat, Solar Thermal Process Heat, Photovoltaics
Applicable Sectors: Commercial, Industrial, Nonprofit, Schools, Local Government
Amount:Varies by project, but program generally requires matching funds at least equivalent to DCED funding
Maximum Incentive:Manufacturer loans: $35,000 per job created within 3 years
Manufacturer grants: $5,000 per job created within 3 years
Loans for distribution projects: Lesser of $5 million or $2.25/watt
Loans for solar thermal projects or R&D facilities: $5 million
Grants for distribution projects: Lesser of $1 million or $2.25/watt
Grants for solar thermal projects or R&D facilities: $1 million
Grants for feasibility studies: 50% of cost up to $175,000
Loan guarantee grants: Up to 75% of deficient funds up to $30 million
Terms:Loans at a fixed interest rate -- 5% as of August 2011 -- up to 10 years (equipment) or 15 years (real estate). Loan guarantee grants have a maximum term of 5 years.
Funding Source:Alternative Energy Investment Fund (state issued bonds)
Program Budget:$80 million
Start Date:09/01/2011 (2011 solicitation)
Expiration Date:10/31/2011 (2011 solicitation, expired)
Web Site:
Authority 1:
Date Enacted:
Special Session H.B. 1

Note: The deadline for the most recent solicitation under this program has now passed. The program is currently closed, pending revisions to the program guidelines. Please see the program web site for further details.

In July 2008, Pennsylvania enacted legislation providing $650 million to support a variety of renewable energy and energy efficiency technologies. Included in this legislation was a provision authorizing the creation of a $80 million grant and loan program for solar energy technologies. The program is jointly administered by the Department of Community and Economic Development (DCED) and the Department of Environmental Protection (DEP), under the direction of Commonwealth Finance Authority (CFA). Program guidelines were first issued in April 2009 although they have been revised since that time. Incentives are available to businesses (including non-profits), economic development organizations, and political subdivisions (e.g., local governments, schools, etc.).

The program will offer support for solar technologies in the form of loans, grants and loan guarantees (i.e., grants to be used in the event of a financing default). Eligible facilities are defined as those that generate, distribute, or store solar energy; manufacturing or assembly facilities for solar panels or other solar equipment; and solar technology R&D facilities. This definition includes both solar photovoltaic (PV) and solar thermal systems. All systems must have a lifetime of at least four years. Funds may be used for the following project costs:

  • Acquisition of land and buildings, rights-of-way, and easements necessary for project construction
  • Clearing and preparation of land to build an eligible project
  • Construction or renovation of a building to manufacture solar components and systems
  • Equipment purchases for the manufacture of solar systems
  • Purchase, installation and construction of facilities to produce, distribute, and store solar energy or produce hot water using solar energy
  • Project planning and feasibility studies
  • Permit fees
  • Administrative costs associated with an eligible project, not to exceed 3% of funding

The individual support mechanisms are described in more detail below. For all types of support, there is a general requirement that applicants provide matching funds equivalent to the funding offered under the program. Energy generation projects must undergo a solar shade analysis which shows annual energy production of at least 80% of optimal. In addition, all PV energy systems must be new and UL-listed and solar thermal systems must be new and SRCC OG-100 rated (or comparable rating approved by the DEP). All systems must be installed in accordance with the applicable construction codes and standards.

Loans are available at a fixed interest rate -- 5% as of August 2011 -- for terms of up to 10 years (equipment) or 15 years (real estate). Loans for manufacturing facilities are limited to $35,000 per job created within three years of loan approval. Loans for energy production projects are generally limited to $5 million although larger loans of greater than may be considered on a case-by-case basis. Loans for PV energy production projects are also limited to $2.25 per watt.

Grants for manufacturing facilities are available for up to $5,000 per job created within three years of grant approval. Grants for energy production facilities are generally limited to $1 million, although larger grants may be considered on a case-by-case basis. Grants for PV energy production projects are also limited to $2.25 per watt. Planning and feasibility studies are also eligible for grants of the lesser of 50% of the cost of the study or $175,000. The guidelines state that the CFA prefers to support generation projects through loans rather than grants; however, it will consider grant requests from projects for which there is not a long-term contract (10 years or more) in place for the Solar Renewable Energy Certificates (SRECs) produced by the project.

Loan Guarantees
Loan guarantees will take the form of a grant that may be used in the event of financing default on the part of the applicant. Loan guarantees are limited to 75% of the deficiency up to $30 million. The term of the grant may not exceed five years.

Visit the program web site and review the funding guidelines for additional program details and application procedures.

  Tigh Savercool
Department of Community and Economic Development
Center for Business Financing - Grants Division
Commonwealth Keystone Building
400 North Street, 4th Floor
Harrisburg , PA 17120-0225
Phone: (717) 720-1401
Phone 2: (717) 787-7120
Fax: (717) 772-3581
Web Site:
NCSU - home
Disclaimer: The information presented on the DSIRE web site provides an unofficial overview of financial incentives and other policies. It does not constitute professional tax advice or other professional financial guidance, and it should not be used as the only source of information when making purchasing decisions, investment decisions or tax decisions, or when executing other binding agreements. Please refer to the individual contact provided below each summary to verify that a specific financial incentive or other policy applies to your project.

While the DSIRE staff strives to provide the best information possible, the DSIRE staff, the N.C. Solar Center, N.C. State University and the Interstate Renewable Energy Council, Inc. make no representations or warranties, either express or implied, concerning the accuracy, completeness, reliability or suitability of the information. The DSIRE staff, the N.C. Solar Center, N.C. State University and the Interstate Renewable Energy Council, Inc. disclaim all liability of any kind arising out of your use or misuse of the information contained or referenced on DSIRE Web pages.

Copyright 2013 - 2014 North Carolina State University, under NREL Subcontract No. XEU-0-99515-01. Permission granted only for personal or educational use, or for use by or on behalf of the U.S. government. North Carolina State University prohibits the unauthorized display, reproduction, sale, and/or distribution of all or portions of the content of the Database of State Incentives for Renewables and Efficiency (DSIRE) without prior, written consent.