TL/DR –
The Solar for Schools program in Pennsylvania, which funds the installation of solar panels in schools across the state, faces a potential loss of key federal tax credit and uncertainty over state funding due to a late, deficit-ridden state budget. The federal tax credit, which covered up to 50% of funding for the initiatives, will only be applicable if schools begin construction before July 2026 or complete the project by the end of 2027 due to new rules in President Donald Trump’s tax and spending bill. The program, which has awarded $22.5 million in grants this year, is highly popular, but state Senate Majority Leader Joe Pittman has expressed concern over whether the state can continue to finance it in light of a structural deficit.
Pennsylvania Schools May Have to Downsize Solar Plans Due to Changes in Federal Tax Credits
The popular Solar for Schools program in Pennsylvania, which has given significant funding to local schools for solar panels to reduce energy costs, may lose access to crucial federal tax credits. As a result, many schools might have to reconsider their plans.
The state’s funding for the program is also uncertain due to ongoing budget negotiations in Harrisburg, which are hampered by a late and deficit-ridden state budget.
Introduced as part of last year’s state budget, Solar for Schools allocated $25 million for solar projects across Pennsylvania’s public districts, intermediate units, and community colleges.
The program was initially designed for schools to use state grants to finance half of their projects, with a federal tax credit covering up to 50% of the remaining costs. Schools were required to upfront the costs, but the federal tax credit seemed to alleviate some of the financial burdens.
However, due to the recent tax and spending bill enacted under President Donald Trump, schools can only claim this credit if they commence construction before July 2026 or complete the project by the end of 2027.
State Rep. Elizabeth Fiedler (D., Philadelphia), who sponsored the bill that created Solar for Schools, expressed her frustration over the potential loss of federal funding. Nevertheless, she is optimistic about securing state funding and believes schools can still implement solar projects, albeit at a slower pace.
In its first year, Solar for Schools received three times more funding applications than available funding, according to Fiedler. This year, the program has already awarded $22.5 million in grants to schools in three regions.
The remaining $2.5 million was allocated for schools in Western Pennsylvania. Still, due to insufficient applications, the Department of Community and Economic Development, which oversees the grant program, plans to award the remaining funds during the next application round.
State Senate Majority Leader Joe Pittman (R., Indiana) expressed doubts about continuing the program’s funding this year due to the state’s structural deficit.
The program has funded 73 different solar projects in 45 school districts across Pennsylvania. The largest cumulative award of $2.3 million was granted to the Upper Darby School District in Delaware County. Despite the potential loss of the federal tax credit, the district still plans to move forward with their solar projects.
If schools that received state grants cannot complete their projects in time to secure additional federal funding, they may face significant consequences.
Other Pennsylvania projects impacted by the Trump administration’s clean energy investment reduction include the state’s two planned hydrogen hubs and tax credits for homeowners for energy efficiency improvements.
Despite Pittman’s reservations and the federal policy changes, Fiedler remains hopeful. She believes the program will receive state funding again this year, supported by state Senate Republicans like Camera Bartolotta, who sees the program as a small investment with a huge return.
—
Read More US Economic News