Last updated: December2024
Written by
Ben Zientara
When it comes to solar incentives, Delaware is no “Small Wonder!” The state offers a few excellent programs that can reduce the upfront cost of going solar and help it pay back its cost more quickly.
The average Delaware resident can save an estimated $10,820 on a solar panel installation through one-time grants and tax credits and earn an additional $4,600 in renewable energy credit payments just for generating clean solar electricity. That’s on top of the electric bill savings that come with installing solar panels.
Incentive | Estimated average savings | Eligibility | About |
|---|---|---|---|
Federal solar tax credit | $5,220 | All tax-paying U.S. citizens | Tax credit equal to 30% of installation costs, applied to federal income taxes |
Delaware Green Energy Program Grants | $2,000 to $6,000, depending on the utility | Homeowners who are customers of Delmarva, DEC, or DEMEC (Newark) | Grant amounts vary by utility |
Solar Renewable Energy Credit (SREC) sales | $4,600 over 25 years | Any owner of a photovoltaic solar installation | One credit per megawatt-hour of energy produced, approximately $30 per credit for the first 10 years, and $10 per credit in years 11-25. |
Low- to Moderate-Income Solar Pilot Program | 70% to 100% of the cost to install the system | Homeowners at or below the area median income for their county | Administered by the Delaware Department of Natural Resources and Environmental Control (DNREC) |
Quick Facts
Value: 30% of solar installation costs after grants; average of $5,220 for an 8-kW system
Frequency: One-time tax credit, rollover for five years
How to apply: File IRS Form 5695 with annual tax return
There is no specific Delaware solar tax credit, but the federal government offers the federal solar tax credit (formerly known as the Federal Solar Investment Tax Credit or ITC). The Clean Energy Credit applies to all U.S. residents who own a home on which they install solar panels.
The credit equals 30% of the cost to install solar and can only be used by homeowners with the tax liability to claim it.
The average solar panel system in Delaware will earn a tax credit of about $5,220. But, the value of the solar tax credit can depend largely on system size, which you can see in the following table:
System size | Estimated cost after grant* | Tax credit |
|---|---|---|
6 kW | $13,800 | $4,140 |
8 kW (Delaware average) | $17,400 | $5,220 |
10 kW | $21,500 | $6,450 |
15 kW | $33,750 | $10,125 |
*All calculations assume the homeowner is a Delmarva Power and Light (DPL) customer who gets the grant.
Taxpayers can claim the credit in the year after their solar installation is complete. The credit applies to all solar equipment or home battery storage costs but won’t include expenses like structural improvements that aren’t directly associated with generating solar energy.
Note: Lending companies often require paying the value of the solar tax credit toward a solar loan by 18 months to keep monthly payments low.
Quick Facts
Value: Varies from a maximum of $2,000 to $6,000, depending on the utility
Frequency: One-time grant paid after installation
How to apply: Work with an approved contractor to apply
Delaware’s Green Energy Program is a statewide incentive program that offers grants to customers of Delmarva Power, DEC, and the municipalities served by DEMEC.
Each of these three groups has its own incentive amounts and maximum payments. If your family earns less than the area median income, you can qualify for increased incentives. All systems must be installed by a qualified contractor.
Utility/Cooperative | Grant rate | Grant maximum | System size limit |
|---|---|---|---|
$0.70 per watt | $6,000 | N/A | |
$0.50 per watt | $2,000 | 5 kW | |
Delaware Municipal Electric Corporation (DEMEC - Newark only) | $1.00 per watt | $3,500 | 5 kW |
Quick Facts
Value: About $30 per SREC for 10 years, and $10 per SREC in years 11 through 25.
Frequency: Ongoing, with 2 month delay from SREC production to payment
How to apply: One-time sign up during open auction
SRECs are a great way to earn some extra income from your solar installation. You earn one for every megawatt-hour (MWh) of energy your solar panels produce, and you can sell them to the utility company. SRECs have value because they act as “proof” of clean energy generation, and the utility needs that proof to comply with state Renewable Portfolio Standards (RPS) that requires them to procure a certain percentage of energy from solar.
To sell your SRECs, register with Energize Delaware and participate in the state’s annual procurement process. The procurement process includes an auction that determines the price you will be paid for the first ten years of SRECs. Recent prices have hovered around $30 per SREC. In years 11 through 25, each SREC is worth a flat $10.
A typical residential solar installation should generate about 1.35 SRECs per kilowatt of installed solar capacity per year. That means the average 8-kW home solar installation in Delaware will earn about $325 annually for the first ten years. Over the 25-year lifespan of the average solar panel system, Delaware homeowners can expect to earn an estimated $4,600 through SRECs.
If all this sounds complicated, it doesn’t have to be. A reputable solar installation company can walk you through the process and help you complete the paperwork.
Quick Facts
Value: 70% to 100% of the costs to install solar panels
Frequency: Upfront cost coverage
How to apply: Lean more through the DNREC website
Delaware's low-to-moderate income solar pilot program is the state's first attempt at helping traditionally underserved communities access solar energy for their homes. The program provides free or greatly reduced-cost solar installations to homeowners who meet eligibility requirements.
People who meet the Weatherization Assistance Program's eligibility guidelines can receive a no-cost solar installation of up to 4 kW through this low-income solar program. Homeowners who earn up to their county's area median income can have 70% of the costs of a solar installation (up to 6 kW) covered.
The program works through approved contractors who can help homeowners apply for funding. Loans are available to moderate-income families that can cover the final 30% of the system installation cost.
The current income guidelines can be found on the DNREC website, but here's a quick guide to the income limit for a family of four in each of Delaware's three counties:
New Castle: $91,750
Kent: $71,850
Sussex: $78,150
Quick Facts
Electric rates average $0.16 per kWh in Delaware
Net metering is required and offers full credit for each kWh exported to the grid
Annual excess generation can be paid out by check or rolled over
With net metering in some states, your electric utility gives you full retail rate credit for every kilowatt-hour you send back into the grid with your solar panels.
Net metering requires your utility to monitor how much energy your solar power system produces and how much energy you consume to ensure you get credit for the surplus.
Delaware’s net metering law (26.1014(d)) is straightforward and pretty much perfect. Any net excess solar power you produce is applied to your next bill as a credit worth the full retail rate of electricity.
If you run a surplus for a 12-month, you may elect to have the electric company cut you a check for the surplus, again at the full retail rate. Note, however, that nothing in the net metering law requires you to request the check. If it’s easier for you, you can just keep the excess energy credits rolling over onto your bill indefinitely.
There are no specific solar battery incentives in Delaware, which is unfortunate because many of the state’s neighbors have been putting things like virtual power plants into place.
That said, energy storage does qualify for the same federal clean energy tax credit as solar, and you don’t even need to install them both together.
The average cost of solar panels in Delaware is $23,000 before incentives for an 8-kilowatt solar installation. Once you factor in all of Delaware’s solar incentives, that cost can drop to as low as $12,180 — over 47% lower than the pre-incentive costs. And after installation, you begin earning SREC payments to continue the savings.
Average pre-incentive cost: $23,000
Delmarva Grant: $5,600
Net cost after grant: $23,000 - $5,600 = $17,400
Federal tax credit: $17,400 x 30% = $5,220
Total savings: $5,600 + $5,220 = $10,820
Effective system cost: $23,000 - $10,820 = $12,180
Delaware has some of the best solar incentives in the nation. Between the state grant program and federal tax credit, the initial cost of a solar energy system is reduced to almost half by the end of the first year. Plus, with the estimated energy bill savings of about $1,700 in the first year and $320 in SREC payments, the rest of the cost will be paid back in less than six years. That's an excellent solar panel payback time.
That said, every home is unique, and the kinds of incentives you can qualify for vary based on your income and your specific home. The first step is to seek out Delaware's top solar installation companies and request quotes for your home.
Ben Zientara is a writer, researcher, and solar policy analyst who has written about the residential solar industry, the electric grid, and state utility policy since 2013.
His early work included leading the team that produced the annual State Solar Power Rankings Report for the Solar Power Rocks website from 2015 to 2020. The rankings w...
Learn more about Ben Zientara