PECO Solar Energy And Solar System Questions And Answers Chester County PA Solar Energy

What Is PECO And What Is A PECO Interconnection
What Is A PECO Energy Net Metering "OUT- Meter" Credit
Will PECO Pay You For Energy You Generate And Do Not Use

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PECO Solar Energy And Solar System Questions And Answers
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PECO Solar Energy And Solar System Questions And Answers

What Is PECO?

PECO, formerly the Philadelphia Electric Company, is an energy company founded in 1881 and incorporated in 1929. It became part of Exelon Corporation in 2000 when it merged with Commonwealth Edison's holding company Unicom Corp. PECO operates in southeastern Pennsylvania and serves over 1.6 million electric and over 511,000 natural gas customers; it is the largest combination utility in Pennsylvania primarily serving as a utility grid. The PECO electric service area covers all of the city of Philadelphia and Delaware County; most of Bucks, Chester, and Montgomery counties; and the southeastern corner of York County.

What Is A Utility Grid?

A utility grid is a commercial electric power distribution system that takes electricity from a generator (e.g., burns coal, natural gas, oil or nuclear fuel, and so on to generate heat which runs a mechanical turbine and alternator to induce electricity), transmits it over a certain distance, and then distributes it to consumers via a distribution system. PECO is a commercial electric power distribution system.

What Is Meant By PECO Interconnection? - PECO Interconnection Brochure

An interconnection is an electric connection between PECO's utility grid and a private generation system (PGS). A PGS, also known as distributed generation (DG), has the capability to send energy to the PECO utility energy grid through a program called PECO net metering. This does not apply to off-grid solar systems intended for off-grid applications or the sole purpose of emergency backup generations.

Application Process - PECO Interconnection applications are required for all private generation systems (PGS) supplying energy to the PECO electrical grid. Residential and business customers can submit an application themselves or choose to work with a professional contractor to submit an application. Typically, contractors complete and submit the required application on behalf of their clients. The application asks technical information that an experienced contractor will know how to provide. PECO's Connect-The-Grid is a one-stop online tool for solar contractors to submit, organize, view, communicate, update, and track their PECO interconnection applications.

What Is PECO Net Metering? - PECO Energy Net Metering

PECO solar customers are required to install PECO's Rate RS-2 Service ("Net Metering Service"). This installations requires a dual meter configuration, which includes an "IN- meter" to measure energy flow from PECO to the customer, and an "OUT- meter" to measure energy flow from the renewable energy facility (the customer) to PECO.

All PECO customers have an existing meter board, which houses an "IN- meter." Rate RS-2 customers must install a second meter board to house the "OUT- meter". The customer is responsible to install and pay the costs of the second meter board installation.

PECO net metering allows solar energy system owners to accumulate bill credits when their panels are producing more energy than they use. With PECO's net metering program, you can turn around and use those extra credits when your panels aren't producing enough power to meet your electricity needs. If you have produced more energy than you used by the end of the billing period, the excess credits will go towards your next bill. When the metering year ends on May 31, PECO will pay you for any excess kilowatt-hours from that year. There is no limit to how much of this extra power generation PECO will purchase. As a result, you can use your solar credits to supplement your energy needs and save money throughout the year, and you will also receive extra money on May 31st if you produced more power than you used.

What IS The PECO Energy Net Metering "OUT-Meter" Credit? - PECO OUT-Meter Credit Policy

PECO offers a PECO Energy Net Metering "OUT-Meter" Credit up to $400.00 to assist in offsetting the costs of the installation of the second meter board to house the "OUT-meter" to measure energy flow from the renewable energy facility (the customer) to PECO.

Will PECO Pay You For Energy You Generate And Do Not Use?

Yes, if you install a grid-tied solar system interconnected to PECO's transmission and electric distribution system according to PECO's instructions and approval.

On a month to month basis, PECO will credit your bill with banked kilowatt hours (if you generated more kilowatt hours than you used) from previous months. If you are not able to use your banked kilowatt hours (kWh), PECO will pay you one time each year, May or June billing date, for each kWh you generated and did not use where your banked kWh will become zero for the new year.

Important: PECO will pay you each year for energy generated and not used, but your energy supplier must be PECO or PECO will not pay you for energy generated and not used. Most other energy suppliers do not have a program to pay you for energy generated and not used. If your supplier is PECO, PECO will pay you 100% of current kWh energy rate and current distribution rate combined for each kWh you generate and do not use whether it be in a credit to your bill or annual lump sum payment.

What Is An SREC And How Does It Work?

Each time a solar installation generates 1,000 kilowatt-hours (kWh) of electricity, an SREC is earned. Solar project owners report the energy production to the SREC Tracking System. This reporting allows SREC's to be placed in the customer's electronic account. SRECs can then be sold on the SREC Tracking System, providing revenue for the first 15 years of the project's life.

Electricity suppliers, the primary purchasers of SRECs, are required to pay a Solar Alternative Compliance Payment (SACP) if they do not meet the requirements of the SREC Registration Program (SRP). One way they can meet the SRP requirements is by purchasing SRECs. As SRECs are traded in a competitive market, the price may vary significantly. The actual price of an SREC during a trading period can and will fluctuate depending on supply and demand.

What Is The SREC Tracking System?

All solar energy systems eligible to earn SRECs must report system production based upon readings from a revenue-grade meter that meets the American National Standards Institute (ANSI) Standard. This meter is in addition to the electric meter installed by the local utility (PECO) to measure the home or business' electric consumption. SRECs will be issued to systems based only upon readings obtained from a revenue-grade meter measuring the system output.

Once your solar project has been installed and your online SREC Tracking System account has been established, SRECs will be deposited into your account. The SREC Tracking System also records the sale of SRECs from generators to purchasers.

What Is The State Of The Pennsylvania's SREC Market?

In SREC state markets, the Renewable Portfolio Standard (RPS) requires electricity suppliers to secure a portion of their electricity from solar generators. The SREC program provides a means for Solar Renewable Energy Certificates (SRECs) to be created for every megawatt-hour of solar electricity created.

The SREC is sold separately from the electricity and represents the "solar" aspect of the electricity that was produced. The value of an SREC is determined by the market subject to supply and demand constraints. SRECs can be sold to electricity suppliers needing to meet their solar RPS requirement. The market is typically capped by a fine or solar alternative compliance payment (SACP) paid by any electricity suppliers for every SREC they fall short of the requirement.

Pennsylvania's SREC market is oversupplied. A variety of federal and state incentives, in addition to the SREC market, led to a substantial build out of solar in the state. Additionally, PA is one of two remaining SREC states that allows systems to register from outside of the state, further impacting supply.

In other words, Pennsylvania's SREC market is the lowest of all participating states paying out almost nothing. So, beware when your solar sales person uses this incentive as a sales tactic.

"The fix is really easy, close the out-of-state production loophole, which would clamp down on the supply side. And ramp up the timeline to get to the 0.5 percent, which would give a little jolt on the demand side."

How Does The Federal Tax Credit Work For Solar Owners?

When purchasing a solar electric system, you could potentially save up to 30% with the federal solar tax credit, otherwise known as Investment Tax Credit (ITC). The tax credit amount originated at 30% until 2016 (extended to 2019) with no upper limit. The credit decreases to 26% for tax year 2020 and drops to 22% for tax year 2021 where and the tax credit amount will be evaluated again.

  • The Investment Tax Credit ("ITC") is a percent (%) federal tax credit claimed against the tax liability of residential (Section 25D) and commercial and utility (Section 48) investors in solar energy properties.
    Note: Tax Liabilty as defined by the IRS specific to the Investment Tax Credit can, and does for many, result in no federal tax credit for your solar installation. You should not be alarmed, just another government incentive trick to help the wealthy and exclude the middle class.
  • A tax credit is a dollar-for-dollar reduction in the income taxes that a person or company claiming the credit would otherwise pay the federal government. The ITC is based on the amount of investment in solar property. Thus, both the commercial and residential ITC are credits equal to the percent of the basis that is invested in eligible property that is placed in service.
  • The Section 25D residential ITC is used for residential sized projects, and the homeowner applies the credit to his/her federal income tax.
  • The Section 48 commercial ITC is used for utility-scale, commercial and residential sized projects.

When most consumers set out to do research about solar panels, they will eventually come across the Residential Renewable Energy Tax Credit. This tax credit allows you to claim up to 30% of the price you pay to install solar panels, which can discount the cost of going solar significantly. The credit has no limit and will be available for another few years through 2021.

Admittedly, the solar tax incentive is confusing, and many consumers have questions about it. While I am not licensed to give tax advice, I recommend that you consult with a tax professional on all tax matters. I hope that by explaining the basics of the solar tax credit, you will have a better understanding of how it "might" work for you when you are ready to purchase a solar system.

Many people are led to believe that they will receive a check from the federal government after they file their taxes, similar to how typical rebate works when purchasing a product. However, this is not true! The tax incentive is a credit, meaning that when you file your Federal taxes, you can claim 30% of the qualified expenditures of your solar system. If you owe Federal taxes that year, then the credit can be applied and you will either A) owe less, B) owe nothing, C) owe nothing and have a credit left over.

Here are some sample scenarios. Imagine that Joe Solar paid a total of $25,000 for the installation of his solar electric system on his home's rooftop. This amount qualifies him for a $7,500 Federal tax credit.

In Scenario A (where he would owe less) April arrives, he files his taxes and claims the 30% solar tax credit. It turns out he owes $10,000 in taxes, so the entire $7,500 is applied and he writes check to Uncle Sam for the remaining $2,500 that he owes.

In Scenario B (where he would owe nothing) Joe went to his employer and told him that he would be getting a $7,500 tax credit for the year. The employer adjusted Joe's withholdings on his pay check so that he took home more money and would owe $7,500 to the IRS in April. In April, Joe applies the $7,500 tax credit to his $7,500 tax bill and owes nothing.

In Scenario C (where he would owe nothing and have a leftover credit), we find out that Joe only owes $1,200 in taxes. His tax credit covers this $1,200 amount that he owes and then the remaining $6,300 tax credit will roll over to any succeeding taxable years.

While most people qualify for the solar tax incentive, there are some that do not qualify. Anyone who does not owe taxes will not be able to benefit from the tax credit. Also, it does not apply for solar installations on rental properties. That said, anyone who installs a solar system for an existing home, new construction or second residence will qualify for the solar tax credit.

Note... if you do not pay federal tax in any given year, you cannot use the federal tax credit against your annual taxes. This is a credit, not a rebate, and it cannot be applied to your state or local tax or any other tax agency.

What Happened To The Pennsylvania Sunshine Program? - Pennsylvania Sunshine Program

Starting in the year 2008, the Pennsylvania Sunshine Solar Program provided $100 million in rebates to help fund solar electric (solar photovoltaic, or PV) and solar hot water (solar thermal) projects for homeowners and small businesses in Pennsylvania. This program is authorized by section 306 of the Alternative Energy Investment Act, Act of July 9, 2008 Spec. Sess., No. 1, (P.L. __, No. 1) (73 P.S. 1649.101 et seq.). Funding was also be provided by the American Recovery and Reinvestment Act of 2009, Pub.L. No. 111-5 (2009).


Financially valuable programs like the Pennsylvania Sunshine Program are not made easily available to the general public upon implementation. Normally, insiders and players (the privileged or elite) take advantage of the new laws as they are announced. Usually by the time the news makes it to the general public (the people), the funding is depleted. Funny how that works.

*As of November 25, 2013, the PA Sunshine Program has $0 available for payment of rebates.

What Type Batteries Work Best For A Solar System?

In all consideration, deep cycle lead acid batteries offer the best performance for the price, although most other deep cycle type batteries will work. All solar type batteries are costly, but in a time of need, you will wish you had purchased more. Before you buy, take a close look at deep cycle lead acid fork lift battery or two - built to work hard for almost ever.

Does Cold Weather Affect Battery Performance?

Unfortunately yes, the colder the batteries, the less performance. Batteries should be stored in an area sheltered from the cold as best possible. Estimate about half the performance in the winter months compared to the summer months.

Is Solar Energy Available In Cold Weather, Snow, Rain, And On Cloudy Days?

Yes, solar energy is available in almost any daytime condition. Solar energy is collected best on warm, full sun days. On cold days, the energy collected is slightly less. On snow days, energy is collected at a low rate. Snow will usually slide off the solar panels upon contact by design. Otherwise, snow will quickly melt and slide off the panels due to the downward slanting of the panels. On rainy and cloudy days, energy is still collected at a slower rate. Under most conditions, sufficient energy is collected each day to recharge the batteries to full capacity if your system is sized appropriately. Moderate or heavily foggy days appear to produce little, or no, energy.

Are All Solar Panels The Same?

No, the better grade solar panels can collect energy from the sun in almost any condition. Most lower cost solar panels only collect energy well when the sun is directly overhead while the better grade solar panels can collect significant energy from any angle, in shaded conditions, and severe weather conditions.

PECO Solar Energy And Solar System Questions And Answers