Delaware solar incentives, tax credits and rebates
Financial resources for Delawareans in 2024
There’s no way around it: installing solar panels is expensive. In Delaware, a typical 10-kilowatt residential system costs $24,900 before any financial incentives. That price drops to $17,430 after considering the federal solar tax credit.
Delaware homeowners may also take advantage of additional solar incentives, including rebates and grants, that make going solar even more affordable.
The federal solar investment tax credit (ITC) is the most significant solar incentive in Delaware. Although leasing or a system is often cheaper upfront, you won’t be eligible for the ITC.
Jump to insightAdditional solar incentives include the Green Energy programs through Delmarva Power and DEMEC Member Utilities. The state also has net metering and power purchase agreements to help offset the upfront expenses.
Jump to insightAs of publishing, the Delaware Electric Cooperative has blocked new rooftop solar installations from being connected to the electricity grid, which means some residents can’t participate in net metering.
Jump to insightResidential solar panel incentives in Delaware
The federal solar investment tax credit (ITC) reduces your federal tax liability by 30% of the price of your solar energy system. This tax credit applies to both residential and commercial installations, and it includes the cost of the solar panels and other equipment, labor and additional features for monitoring the system.
The ITC drops to 26% in 2033 and then 22% in 2034.
Don’t get confused: the ITC is a credit, meaning it directly decreases the amount of taxes you owe. This is different from a deduction, which reduces your taxable income. For example, if you spend $10,000 installing a solar panel system, then ITC is worth $3,000. If in the year your system becomes operational, you owe $15,000 in taxes, then ITC reduces what you owe to $12,000.
Additional Delaware solar panel incentives include:
- Solar rebates: As of publishing, municipal electric utilities in New Castle, Clayton, Dover, Lewes, Middletown, Milford, Smyrna and Seaford don’t offer any rebates for residential renewable energy systems.
- Solar grants: Delmarva Power offers grants to offset the cost of solar panels and other clean energy investments. Customers can apply through the Green Grant Delaware portal.
- Low- to moderate-income program: A pilot program for cheap or possibly free solar panel installations for low- to moderate-income households is available as of publishing. The DNREC LMI fact sheet has more information about this program, but you should call the Renewable Energy Assistance Program administrators directly for the most current information about eligibility.
- Solar renewable energy credits: Owners of solar panel systems can sell their solar renewable energy credits (SRECs) to investor-owned utilities, retail electricity suppliers, municipal utilities and rural electric cooperatives. Note that while interested parties may still sell their SRECs on the spot market, most SRECs are part of the SREC Purchase Program or the SREC Procurement Program. The incentive for the spot market program is 5 cents/kilowatt-hour. There’s also a Newark program for solar RECs, which you can learn more about and opt in to on the City of Newark’s website.
- Owners of solar panel systems have the option to sell their solar renewable energy credits (SRECs) to various buyers, including investor-owned utilities, retail electricity suppliers, municipal utilities and rural electric cooperatives. While SRECs can be sold on the spot market, where the current incentive is 5 cents per kilowatt-hour, most are sold through structured agreements like the SREC Purchase Program or the SREC Procurement Program. Additionally, there is a specific program for solar RECs in Newark, details of which are available on the City of Newark’s website.
More solar incentives in Delaware
Check DSIRE for the most comprehensive information on solar incentives and policies in Delaware.
| Incentive type | Amount | Eligible solar equipment | Applicable sectors | Administrator | |
|---|---|---|---|---|---|
| Delaware Electric Cooperative - Green Energy Program Incentives | Rebate Program | $.035/w for the first 5kw, $0.20/w thereafter | Solar panels, solar water heat, solar space heat | Commercial, industrial, local government, nonprofit, residential, schools, agricultural, institutional | Delaware Department of Natural Resources and Environmental Control |
| Energy Conservation Subsidy Exclusion | Corporate tax exemption | 100% of energy conservation subsidies provided by public utilities | Solar panels, solar water heat, solar space heat | Residential, multifamily residential | United States Internal Revenue Service |
| Residential Energy Conservation Subsidy Exclusion | Personal tax exemption | 100% of energy conservation subsidies provided by public utilities | Solar panels, solar water heat, solar space heat | Residential, multifamily residential | United States Internal Revenue Service |
| Energy Efficient Mortgages | Loan program | Up to 100% of improvement costs | Solar panels, passive solar, solar water heat, solar space heat | Residential | Federal Housing Administration |
| Energy Efficient Mortgages | Loan program | $3,000-$6,000 | Solar panels, passive solar, solar water heat, solar space heat | Residential | Veterans Administration |
What to know about net metering in Delaware
Sometimes, your solar panels might generate more electricity than your household can use. Net metering lets you sell that extra to the local power grid. Net metering credits usually offset the cost of power drawn from the grid when solar production is low, like at nighttime. Essentially, the meter runs backward when excess power is flowing into the grid, helping to reduce future month’s electricity bills.
In the past, net metering in Delaware let people with solar panels sell their excess energy at the same retail rate for which they bought it from the grid. As of publishing, DEC is saying that this leads to non-solar customers indirectly subsidizing those with solar, which is why their electricity rates are increasing. It’s currently preventing customers from connecting their solar systems to the grid across much of the state.
The alternative to net metering is to store energy in a battery. That way, you can still turn your lights on when panels aren’t generating electricity. A solar storage battery can cost almost as much as the panels — $7,000 to $18,000.
» GREENEST STATES: Delaware ranked 14th in 2024
How much are solar panels in Delaware?
Before considering the federal solar tax credit, solar panel costs in Delaware typically range from $8,715 to $24,900. Depending on your household energy usage, you might need a smaller or larger system.
Average solar panel installation cost by system size in Delaware
| 5 kW | 6 kW | 7 kW | 8 kW | 9 kW | 10 kW | |
|---|---|---|---|---|---|---|
| Before federal tax credit | $13,063 | $15,675 | $18,288 | $20,900 | $23,513 | $26,125 |
| After federal tax credit | $9,144 | $10,973 | $12,801 | $14,630 | $16,459 | $18,288 |
Solar resources in Delaware
DNREC maintains a list of participating contractors that install solar energy technologies supported by the green energy funding programs. Below are some additional resources to guide you through transitioning to solar in Delaware.
Find solar companies in Delaware
A good solar company helps you navigate local incentives, permitting and net metering policies. Compare our picks for the top solar companies in Delaware to learn more.
| Companies | Customer rating | Professional installation | Payment options | Year founded |
|---|---|---|---|---|
| SunPower | 3.4 | Cash, loan, lease | 1985 | |
| Project Solar | 4.6 | Optional | Cash, loan | 2016 |
| CleanChoice Energy | 4.6 | N/A | Varies | 2012 |
| Tesla Energy | 2.0 | Cash and loan | 2015 | |
| ShopSolar | 4.7 | Cash, loan | 2018 |
FAQ
How do I know if my house is a good candidate for solar?
It’s best to have plenty of unshaded roof space that faces south or west for optimal sun exposure. Solar panels absorb sunlight and convert it into usable electricity. If you have a lot of shading around your house, they might not get enough sun to power your home.
It’s also smart to upgrade any old, inefficient appliances first. Reducing your electrical loads now means you can get a smaller system, which will be cheaper.
The condition of your roof matters too — if it needs replacement soon, do that before installing solar panels. Installing solar panels on an old roof might mean you have to remove the panels, replace your roof and then reinstall the panels. This will cost around $5,000 for a 19-panel setup.
Will my property taxes go up if I get solar panels?
Delaware tax law does not have a provision to exempt solar systems from the value of a property. So, if solar panels increase a home's value, it’s possible that your property taxes will go up.
How much can I save with solar panels in Delaware?
Over 25 years, Delaware homeowners with solar panels avoid $63,870 in utility costs on average. Your current electric bill is the starting point for assessing the financial benefits of transitioning to solar energy. Knowing your average energy consumption helps determine the size and capacity of the solar system you need. Once you know this, you can figure out potential savings and how long it should take for your solar installation to pay for itself.
Is my HOA allowed to restrict solar panels?
No. Homeowners associations in Delaware are not permitted to restrict roof- or ground-mounted solar systems on private homes.
How does the federal tax credit work?
You have to claim your solar equipment, labor and permits on your federal taxes for the same year you started using your system on Form 5695. The credit rolls over to the next tax year if you don’t use the full amount.
How can I pay for solar panels?
Paying upfront is the most obvious way to pay for solar panels, but many don’t have that kind of money saved up. If you’re one of those people, you can finance solar panels with a solar loan. It works a lot like any other type of loan — there’s an application and approval process, and you pay it back over time (with interest). You could also go with a lease or power purchase agreement (PPA).
» SOLAR PANELS: Lease vs. buy
What has Delaware’s investment in solar been so far?
Total solar investments in the state amount to $686 million, according to the Solar Energy Industries Association.
Bottom line
Delaware is one of the best states for solar. Buying solar panels is still a big upfront investment, but statewide and federal incentives help make going solar less expensive than elsewhere. The ConsumerAffairs Research Team conducted an in-depth analysis to determine how much it is to go solar in Delaware and the average costs in other states. Turns out, it’s worth it for many homeowners, particularly in Delaware.
Solar costs and saving: Delaware vs. nearby states
| 6 kW system cost (before incentives) | 10 kW system cost (before incentives) | Typical system size needed* | Average cost per watt | Total utility power cost savings** | |
|---|---|---|---|---|---|
| Delaware | $14,940 | $24,900 | 10.15 kW | $2.49 | $63,870 |
| Maryland | $16,800 | $28,000 | 10.18 kW | $2.80 | $64,703 |
| New Jersey | $16,200 | $27,000 | 9.49 kW | $2.70 | $76,285 |
| Pennsylvania | $16,920 | $28,200 | 10.17 kW | $2.82 | $58,076 |
Article sources
ConsumerAffairs writers primarily rely on government data, industry experts and original research from other reputable publications to inform their work. Specific sources for this article include:
- DSIRE, "Delaware Programs." Accessed March 2, 2024.
- EnergySage, “The cost of solar panels in Delaware.” Accessed March 2, 2024.
- SolarReviews, “How much do solar panels cost in Delaware, 2024?” Accessed March 2, 2024.
- Solar Energy Industries Association (SEIA), "Delaware Solar." Accessed March 2, 2024.
- DEMEC, “Municipal Utilities’ Green Energy Fund Program.” Accessed April 18, 2024.
- Delaware Department of Natural Resources and Environmental Control, “Considerations for installing solar panels in Delaware.” Accessed April 18, 2024.
- Solar Delaware “Delaware Solar Policy.” Accessed March 11, 2024.
