The complete list of Delaware solar incentives and tax credits for 2023, plus how to take advantage.
Table of Contents
- State property and sales tax exemptions in Delaware
- Delaware solar loans and grants
- Delmarva Power solar incentives
- Free solar through the DNREC Weatherization Assistance Program
- SRECs in Delaware
- Net metering in Delaware
- Final thoughts on state solar incentives in Delaware
Delaware may be the First State, but it ranks 41st for installed solar capacity, according to the Solar Energy Industries Association (SEIA). This is too bad, given that the University of Delaware is home to the Institute of Energy Conversion. Founded in 1972, this may well be the world’s oldest continuously operating solar research center!
Delaware might not have much solar installed so far, but things are looking up for renewable energy in the state. As well as being able to sell SRECs in Delaware, residents can take advantage of generous net metering rules, the lack of state sales tax, subsidized loans and grants, and a new program that could mean you can install solar for free!
Delaware State Solar Incentives
|State sales tax exemption||There’s no exemption in Delaware because there’s no sales tax in the state!|
|SRECs in Delaware||Delaware has a robust SREC market, with prices ranging from $10 to $45 per SREC in 2021 and new rules meaning prices may increase|
|Delaware Green Energy Grant||Utility-funded grants of up to $8,000 for eligible home solar installations|
|Energize Delaware Solar Loan program||State-subsidized low-cost loans of up to $30,000 for up to 10 years for installing solar|
|Net metering in Delaware||Net metering is mandated by law with credits carried over indefinitely or annual payouts by request|
|Free solar in Delaware!||The Low- to Moderate-Income (LMI) Solar Pilot Program, launched in 2022, offers free or low-cost solar up to 6 kW to qualifying residents|
State property and sales tax exemptions in Delaware
Delaware doesn’t have a state sales tax and there are no local sales taxes either. This means homeowners don’t have to pay any sales tax on their solar installation in Delaware!
There is no state property tax exemption for solar in Delaware. This means you may have to pay additional property taxes based on any value added to your home by going solar.
Delaware solar loans and grants
Delaware offers both grants and low-cost solar loans to help homeowners in Delaware to go solar. These are funded in part by the state’s major utility companies, including Delmarva Power and the Delaware Electric Cooperative.
Energize Delaware Solar Loan Program
Delaware’s Energize Delaware Solar Loan program offers low-interest loans to credit-qualified residents wanting to install home solar. Eligible customers can receive loans of $5,000 to $30,000 for up to 10 years. The current interest rate is 3.9% and the total loan cannot exceed 70% of the total project cost. There is no penalty for prepayments but you can’t adjust your monthly payment.
To qualify for the loan, you need a minimum credit score of 650, a monthly debt to income ratio of 40%, and you have to be a Delaware resident installing solar on a single-family home or duplex. You must use an installer approved by the Delaware Sustainable Electric Utility (SEU). If your preferred installer isn’t already approved for the program, they can apply online.
The loan program lays out criteria for qualifying installations, as per the Green Grant Delaware requirements. These include caps on the cost per watt of systems and storage, the orientation of panels, and other technical specifications.
Interested homeowners can apply online at energizedelawareloans.org before initiating their solar project. If approved, the applicant will receive an eligibility letter via email and can then begin their solar installation. This has to be completed within three months of the acceptance. Once your system is installed and you’re satisfied with the project, you must complete the second round of paperwork within six months of installation.
Loans will only be disbursed to approved installers after completion of the installation and submission of the second set of paperwork. Once the installer has been paid, your loan is active and you will receive your first statement and notification of payment due.
Green Energy Grant
Delaware launched its Green Energy Program in 1999 with just one utility, Delmarva Power, providing funds through a public benefits fund charge. Over the years, other utilities have signed up and the program has given funding to more than 4,300 renewable energy projects.
Delmarva Power, Delaware Electric Cooperative, and municipal electric customers may all apply for the program if they meet certain eligibility criteria. The grants (which are, in essence, rebates) differ between utilities but can all substantially reduce the cost of going solar. Funding is also available for qualifying low- to moderate-income homeowners to install solar for free or at a reduced cost.
Delmarva Power solar incentives
As of June 1, 2022, Delmarva Power customers who qualify for the Green Energy Grant can receive $0.80 per Watt, up to $8,000 total, for home solar installation. Customers must apply within 12 months of installing their home solar system, however, and will need a shade analysis.
Delaware Electric Cooperative solar grants/rebates
Customers of the Delaware Electric Cooperative can also apply for the Green Energy Grants, but there are considerable wait times between applying and (potentially) receiving any payments. In some cases, it may take up to two years to receive the grant payment if you’re approved. This is due to high demand and limited funds. The 2022 program is already fully subscribed as of July 2022.
Payments amount to $0.35 per watt for the first 5,000 watts of system capacity, then $0.20 per watt for anything over 5,000 watts. To apply for the DEC Green Energy Grant program, you’ll need to fill out this form. Your solar installer or contractor should provide you with all the relevant information and may even help you apply.
Customers of DEC should note that they may not be approved to install solar that feed energy into the grid in some of the utility’s service areas. This is because of an abundance of existing solar installations and the risk that additional power would overburden the utility’s infrastructure and trigger power outages. DEC offers this map of areas where members can no longer install interconnected solar arrays.
DEMEC solar grants/rebates
Several municipal governments also participate in the program by way of the Delaware Municipal Electric Corporation (DEMEC). Customers who receive an electric bill directly from their municipality may be eligible to apply for grants to offset the cost of going solar.
The current grant rate for DEMEC is $1.00 per watt for the first 5,000 watts of installed capacity, then $0.50 per watt for anything above that. The maximum grant is $3,500 per system. To apply, you need to fill out this form.
Free solar through the DNREC Weatherization Assistance Program
The Delaware Department of Natural Resources and Environmental Control (DNREC) not only requires access to community solar for low-income customers, it also launched a two-year pilot program in 2022 that offers free or low-cost solar to low- to moderate-income households.
The Low- to Moderate-Income (LMI) Solar Pilot Program is run through the DNREC’s Weatherization Assistance Program and anyone interested in help installing solar needs to first apply to the WAP. Those who qualify for the low-income program can have up to a 4 kW residential solar array installed for free.
Moderate-income homeowners can also apply, but must do so through the Green Energy Program, with care to request ‘reduced-cost solar installation as a moderate-income household’. If eligible, homeowners can receive 70% of the cost of installing up to a 6 kW solar array. Homeowners must cover the remaining 30% of the cost, though they can also take advantage of the federal solar tax credit and other grants and incentives.
There are currently three approved solar contractors that can install residential solar through the Green Energy Program for moderate-income homeowners. The program administrators encourage homeowners to request a free estimate for solar installation from all three, noting intention to apply for the program. Once you choose a contractor, they take care of submitting the application for the program.
SRECs in Delaware
In Delaware, the state government requires utilities to produce or procure a certain amount of energy from green sources as laid out in the Delaware Renewable Portfolio Standard. The RPS has a solar carve-out, which strongly incentivizes utilities to purchase solar renewable energy certificates (SRECs) in the state.
Customers can sell their SRECs to the state’s main utility, Delmarva Power, through the SREC Delaware Program. The program was established in 2012 and has a procurement period each year, typically in the spring, where solar producers can bid to sell their SRECs (usually for a 20-year period). To get involved, you have to first be qualified or have in hand a Delaware State Certification number from the Delaware Public Service Commission.
Participants in the program also need a revenue grade meter installed. You will then create SRECs by submitting a solar meter reading every month to the program administrator. SRECs are then issued on the last day of every month and the sale initiated on the first business day of every month. Payments are made every month directly to the customer’s bank account and you can check your SREC status anytime by logging into your SRECDelaware dashboard.
While the program is a bit complicated, there’s lots of information at the program website, and an instructional webinar, to help homeowners get involved. You can also contact program administrators via email or phone with any questions.
In 2021, SRECs were sold at rates between $10 and $45. Assuming a customer is successful in selling their SRECs to Delmarva, this could mean a 6 kW system producing around 10,000 kWh each year could net additional income of $100 to $450.
Net metering in Delaware
Delaware offers a generous net metering law where net excess electricity is applied to your next utility bill as a credit at the full retail rate. You can choose to carry over any credits indefinitely or request a check for the credit at the energy supply rate (less than retail rate) at the end of each annual billing period.
Most customers’ annual billing period begins in the month when their solar energy system was interconnected. If this falls in summer, during peak solar energy production, you may want to use the one-time option to change your billing period to instead start at the end of winter, or whenever you use the most energy and can use up most credits.
Delaware utilities such as Delmarva Power have to offer net metering under these conditions. That is, until the aggregate capacity of all net-metered systems exceeds 5% of the capacity required by the utility to meet peak customer demand. There’s currently a bill (298) in the state senate that proposes raising this cap to 8%.
Delaware net metering laws also allow for shared net metering and net metering even with third-party financing of a home solar energy system. This means that some customers with leases or power purchase agreements (PPAs) may be eligible for net metering benefits. Consult your utility to find out more about net metering as it applies to your situation.
Final thoughts on state solar incentives in Delaware
Delaware might not be the sunniest state but solar has a bright future here. There’s a new two-year pilot program offering free or low-cost solar to eligible residents, generous net metering rules and legislators looking to raise the utility cap, and a bill signed into law in 2021 that increases Delaware’s renewable portfolio standard (RPS).
The new law states that utilities must produce or procure at least 40% of their energy from renewable resources, such as solar, wind, geothermal, or hydrogen, by 2035. This is up from a previous target of 25% by 2025. The changes to the RPS also include an increase in carve-out for solar, from 3.5% by 2025 to 10% by 2035. This means utilities will need to install much more utility-scale solar or buy enough solar renewable energy certificates (SRECs) from customers to satisfy the higher goal.
This is all great news for residential solar in Delaware as it helps incentivize utilities to make it easier and more cost-effective for customers to install solar.