HARRISBURG — A popular, bipartisan program that has committed millions of dollars to help Pennsylvania schools lower energy costs by installing solar panels is slated to lose access to a key federal tax credit — and schools could have to scuttle or downsize their plans as a result.
On top of that, state funding for the Solar for Schools program is also in question as lawmakers in Harrisburg try to reach a deal on a late, deficit-plagued state budget.
Solar for Schools was first enacted as part of last year’s state budget, which dedicated $25 million to the program. Almost all of that money has since been committed to solar panel projects at public districts, intermediate units, and community colleges across the state, from Erie to Cambria to Philadelphia Counties.
The program was designed to have schools use state grants to cover half of the funding for their initiatives, while a federal tax credit passed as part of the Biden-era Inflation Reduction Act would also pay for up to 50%.
Schools have to front the costs, but when the program began, it appeared some would have all their expenses covered, depending on how much federal money they qualified for.
But now, as a result of President Donald Trump’s newly enacted tax and spending bill, schools can only claim that credit if they start construction before July 2026 or finish the project by the end of 2027.
State Rep. Elizabeth Fiedler (D., Philadelphia), the prime sponsor of the bill that created the Solar for Schools program, said the impending loss of federal funding is frustrating but she’s still holding out hope for state funding. Even with reduced support, she said, schools will still be able to build solar projects.
“It is possible … It just takes longer to make the money back,” Fiedler told Spotlight PA, adding that what happens in Washington, D.C., is “out of our control, but making sure that schools have availability for state funding is in our control.”
Solar for Schools has been in high demand. In its first year, the program received applications requesting three times more funding than was available, according to Fiedler. So far, $22.5 million in grants have been awarded this year to schools in three regions.
The remaining $2.5 million was slated for schools in the state’s western half. However, not enough applicants in that region submitted proposals seeking the funding, according to Justin Backover, a spokesperson from the Department of Community and Economic Development, which administers the grant program.
Backover said the department plans to award the remaining funds during the next round of grant applications.
Despite that popularity, state Senate Majority Leader Joe Pittman (R., Indiana) has said he isn’t sure the state has enough flexibility to continue funding the program this year, given the structural deficit Republicans are pushing to address in the budget currently being negotiated.
In June, Pittman told Spotlight PA he wasn’t planning to move any energy-related legislation until the state Supreme Court rules on a controversial carbon-cap-and-trade program that has loomed over the state since 2021. He included Solar for Schools as a part of that.
“I don't know how we get to a place where we add to that program, given the overall fiscal challenges we have,” Pittman told Spotlight PA at the time.
A spokesperson did not return a request for comment about whether anything has changed as talks have progressed.
Under the program, 45 school districts and other school entities received grants ranging from $40,000 to $500,000 across dozens of counties in rural, urban, and suburban areas.
Many districts received multiple grants for different projects. The Tunkhannock Area School District in largely rural Wyoming County, in Northeast Pennsylvania, received over $1.7 million in funding for eight different projects.
In total, 73 different projects received funding.
Upper Darby School District in Delaware County, received the largest cumulative amount of funding, $2.3 million, across six schools.
Marvin Lee, the district’s director of operations, told Spotlight PA that Upper Darby had been looking into installing solar panels for several years before the Solar for Schools program existed, in hopes of lowering the district’s electric bills and gaining more independence amid projected electricity cost increases.
Lee said that the repeal of the federal tax credit has not changed the district’s plans — at least, not yet.
He’s in the process of collecting proposals from contractors for the school board’s approval. The hope, he said, is that the district can start the project this year and finish before the tax credit’s expiration date.
But the district could still choose not to move forward with the program if costs are higher than expected, he said.
“It’s all kind of up in the air until we get a really solid proposal,” Lee told Spotlight PA.
If schools that received state grants now aren’t able to complete them in time to get additional federal money, it could have real consequences. As WHYY recently reported, some districts have said they applied for the state grant with the federal funding in mind, and without the latter, were unsure if they would be able to complete their projects at all.
Backover noted the projects are reimbursement-based — meaning if one doesn’t move forward, the school won’t receive the state funding it was awarded.
Solar for Schools isn’t the only project in Pennsylvania being affected by the Trump administration’s move to pull back clean energy investments.
The federal reconciliation bill also rolled back a tax credit for hydrogen production that could have benefited the state’s two planned hydrogen hubs, as well as tax credits for homeowners to make energy efficiency improvements.
Despite the federal upheaval and Pittman’s comments about the state’s tight budget, Fiedler is hopeful the program will still receive state funding again this year.
“I think we just have to wait and see,” she said.
Fiedler has at least one ally among state Senate Republicans: Camera Bartolotta of Washington County. All five school districts in her legislative district that applied for grants received funding, totaling nearly $1 million in state support.
Bartolotta said the program doesn’t just benefit the school districts themselves, but also the wider community, as districts that cut down on costs are less likely to raise property taxes.
She said the $25 million appropriation to the program is a “small investment with a huge return.”
“We can’t just spend money all over the place,” she said. “But with my 31 years as a business owner, I can understand what a [return-on-investment] is.”
