Are solar panels worth it in Delaware?

It’s one of the best states for solar, according to our research

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solar panels on a slanted roof of a home in delaware

Relatively low solar panel installation costs, a good amount of sunlight and several solar-friendly policies make Delaware one of the best states for going solar. The main drawback is the high upfront cost of purchasing and installing the panels and equipment.

Another technical difficulty: The Delaware Electric Cooperative is currently not allowing new rooftop solar installations to be connected to the electricity grid across large portions of the state.


Key Insights

  • Depending on the size of your system and what financial incentives you qualify for, a typical residential solar panel installation costs $9,144 to $26,125 in Delaware.
  • On average, it takes solar panels approximately 10 years to pay for themselves in Delaware.
  • Over 25 years, Delaware homeowners with solar panels avoid $63,870 in total utility costs on average.

8 factors to consider before getting solar panels in Delaware

ConsumerAffairs has heard from thousands of solar customers who have already gone through the installation process. It’s generally worth it if you like the idea of lowering your monthly utility bills, helping the environment and gaining more energy independence. But it doesn’t work out for everyone. Here’s what to consider before you make the switch.

  1. Where you live in Delaware
  2. Solar panel installation costs
  3. Your energy consumption
  4. How you pay
  5. Delaware solar incentives
  6. Net metering rates
  7. How long you live in your house
  8. The solar company you hire

1. Where you live in Delaware

Delaware Electric Cooperative is currently blocking new solar arrays from connecting to the grid in some areas. The DEC says too many solar installations have already been installed, and its distribution system can not safely accept additional power. This is unfortunate, considering it serves 20% of the state’s residential customers.

Residents in the red areas on this map can no longer install solar arrays. If you live in a yellow section, an interconnect study may be necessary before you can install solar on your home or business.

Solar panels might not be a financially viable investment if you can’t connect to the grid. The alternative to a grid-connected system is to store energy in a battery. That way, you can still turn your lights on when panels aren’t generating electricity. Solar storage batteries cost almost as much as the panels — $7,000 to $18,000 — sometimes more.

2. Solar panel installation costs: $10,000 to $30,000

Average solar panel costs in Delaware are relatively low compared with other states. Before the federal solar investment tax credit (ITC), a typical residential system ranges from $13,063 to $26,125. That price drops to $9,144 to $18,288 after considering the full 30% tax credit.

Most installers charge according to the system's wattage, with a typical cost between $2.50 and $5 per watt. “Cost per watt” is a little like looking at the price per square foot when you buy a house. It helps you compare the value of solar energy systems in different sizes. In Delaware, the average cost per watt is only $2.85.

On the high end, solar customers in other states tell us they spent $50,000 to $100,000 installing a system. Like most things, high-quality panels come with a more expensive price tag, but they can be worth it for their performance and durability. The more efficient your panels are, the more electricity they produce and the less space they take up on your roof. There’s not much difference in solar panel technology when it comes to the top players in the solar industry.

Average solar panel installation cost by system size in Delaware

3. Your current energy consumption

Look at your most recent utility bills — how much electricity does your house use each month? Once you know this, you can calculate your potential savings and how long it should take for your solar panels to pay for themselves. By one estimate, a Delaware homeowner with solar panels can avoid $63,870 in total utility costs over 25 years.

A typical Delaware household needs a system with a capacity of 10.15 kW to offset its electricity needs with solar energy. You might need a larger or smaller system, depending on your current energy consumption and anticipated future energy needs. For instance, a new heated pool would require additional power, meaning you need a bigger system with more panels to keep everything running.

4. How you pay

If you can, it’s often financially strategic to pay for the whole thing upfront. You own the system from day one and receive the benefits of available tax credits. Plus, you don’t have to pay interest on a loan. Of course, paying cash is not always an option. That’s when loans, leases and other agreements come into play.

  • Solar loan: Solar loans work like any other type of loan. They have relatively low fixed interest rates. Once you pay it off, you own your system outright.
  • Leasing options: Leasing panels is one way to get the benefits of solar energy without the high upfront cost. A solar lease works like a car lease—you get to use the panels but don’t own them.
  • Power purchase agreement: Similar to leasing, a power purchase agreement (PPA) lets homeowners install solar panels without the upfront costs. You sign a long-term contract with a solar services provider to purchase the electricity generated by the panels at a predetermined rate. The provider owns and maintains the panels throughout the agreement, which usually lasts 10 to 25 years.
  • Home equity loans or lines of credit (HELOC): These let eligible homeowners borrow against equity in their house to finance a solar panel system. They often have variable interest rates, meaning monthly payments can increase over time.

5. Delaware solar incentives: tax breaks and SRECs

The federal solar investment tax credit (ITC) is a major incentive that reduces the upfront cost of going solar in Delaware. The ITC provides a 30% tax credit on your total system costs, including equipment, labor and permits. It will drop to 26% in 2033 and 22% in 2034.

Please 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. The ITC only offsets your tax liability; you can't take advantage of it if you don’t owe taxes in the first place. However, the credit rolls over to future tax years if you don’t use the full amount.

You may be eligible for additional solar incentives in Delaware, including solar renewable energy credits (SRECs). SRECs can be sold in various markets, such as municipal utilities and rural electric cooperatives. However, their value can fluctuate significantly based on market demand.

6. Net metering: full retail buyback rate

Net metering is a billing mechanism that credits solar energy system owners for the electricity they add to the grid. If your panels produce more electricity than you need, the excess is sent to the local power grid, and you get a credit against your electricity consumption in the future.

You should be aware that net metering rules, compensation rates and availability will vary depending on your utility provider. For instance, the Cape Gazette reported that Delaware Electric Cooperative is restructuring its rates for many solar customers this year.

7. How long you plan to stay in your house

Solar installations are expensive, and it takes years for electric bill savings to make up for the initial cost. Solar panels typically pay for themselves within 10 years in Delaware. If you sell your house and move before then, you might not fully realize the financial benefits of your solar investment.

A Zillow study found that, on average, houses with solar panels sell for 4.1% more. Let’s say you spend $25,000 putting solar panels on a house that costs $400,000. It might sell for $16,400 more in a few years, according to Zillow. But, you miss out on some of that $63,870 in total avoided utility costs over 25 years.

In other words, don't get solar panels just because you want to sell your house soon. Instead, consider a home improvement project with a better return on investment, like remodeling the bathroom or kitchen.

8. The solar company you hire

People have had mixed experiences with solar companies. In the best-case scenario, it’s easy to make the switch and you’re happy with the system’s performance. In the worst-case scenario, you end up paying thousands for mid-tier solar equipment from a company with poor customer service and no follow-up or support.

One of the most common complaints is related to pushy sales reps who make promises that can’t be delivered. For instance, Fuji in Middletown, Delaware, told us that the contract looked “great on paper” but advised others to beware of hidden fees and poor installations. Fuji’s system only generates about half of their energy needs, and now they are paying more than before going solar.

That’s why it’s so important to thoroughly research and verify claims made by sales teams before making a decision. Use NREL’s PVWatts Calculator to estimate how much electricity a solar panel can produce over a year on your house — just type in your address. Project Sunroof is a free solar savings estimator powered by Google Earth imagery.

Monthly costs: solar payments vs. savings

Given high residential electricity rates in Delaware, financing solar panels makes sense as long as your monthly loan payment is less than what you would be paying the utility company anyway. Once the initial installation costs are paid, solar panels essentially generate free electricity. If you pay cash, it usually takes about 10 years for solar panels to pay for themselves in Delaware.

Is my house a good candidate for solar panels?

Going solar is at least worth considering if your house is a good candidate to support a solar panel installation. Here’s what to think about before you commit:

  • How much sunlight do you get? Solar panels need regular exposure to sunlight to produce the most energy possible. Delaware averages 3 to 3.5 peak sun hours each day. However, lots of shading — like trees or tall buildings above your roof — could make your solar system less efficient.
  • What is the size and angle of your roof? Delaware (and the rest of the United States) is in the northern hemisphere, so solar panels perform best on south-facing roofs. The worst place to install would be on north-facing roofs, especially if those roofs have a high pitch. For example, if the only place you can install is a north-facing roof with a 30-degree pitch, your costs will likely go up by 30% to 40%.
  • What is the condition of your roof? If you have to replace your roof, do that before you install solar panels. Solar panels are designed to last up to 30 years, so you want your roof to last just as long. Otherwise, it could cost thousands to remove the panels, fix your roof and reinstall the panels again.
  • How old are your appliances? The first step is to ensure that your electrical loads are as small as possible. For instance, if you have an older refrigerator or air conditioning unit, it’s smart to upgrade those before investing in solar panels.

Pros and cons of solar panels in Delaware

It’s a common misconception that solar panels always completely eliminate your monthly power bill — this is not always the case. Still, you’ll likely be paying much less than you would for traditional utility bills.

Pros

  • Long-term savings
  • Better for the environment
  • Low maintenance costs
  • May increase home resale value
  • Solar incentives and programs

Cons

  • Upfront costs
  • Seasonal production variations
  • Performance can be affected by shading from trees or buildings
  • Potential changes to compensation for extra power

Benefits of solar panels in Delaware

Solar power is a renewable energy source that does not produce greenhouse gas emissions or other pollutants. They also require little maintenance and can increase the property value of homes.

  • Cheaper energy bills: The average homeowner in Delaware uses a lot of power, which adds up to a lot of savings when you switch to solar. With electric rates throughout Delaware increasing, especially in the City of Milford, going solar now means that your monthly energy expenses will be more predictable (and very often significantly lower). Solar panels also protect you from future energy cost increases.
  • Higher home resale value: Installing solar panels can significantly increase a home's value. According to the study mentioned above, houses with solar panels sell for 4.1% more on average. The exact increase in value varies by location, with homes in active solar markets sometimes seeing even higher boosts.
  • Better for the environment: Traditional energy sources like coal and natural gas release carbon dioxide and other harmful pollutants into the air. Solar panels generate electricity from sunlight, a clean and renewable energy source. Installing solar panels on your roof helps the environment primarily by reducing greenhouse gas emissions and dependence on fossil fuels.

Drawbacks of solar panels in Delaware

The main obstacle to going solar is the high upfront cost of purchasing and installing solar panels, inverters and other equipment. Then, since solar panels do not generate electricity at night, you need to enroll in net metering or get a storage battery to keep your lights on.

  • Solar equipment is expensive: Even with rebates and other financial incentives, the price typically starts between $10,000 and $30,000. It’s even more expensive if you want a solar battery for energy storage. Solar battery costs are generally between $7,000 and $18,000. Getting a solar battery lets you store energy at home instead of tapping into the local grid when you need to. Solar batteries are a must if you want to go off-grid.
  • Energy production varies: Solar panels are dependent on weather conditions and available sunlight, meaning their performance can fluctuate with cloud cover or shading from trees and buildings. Solar panels still work on cloudy days, but less available sunlight means they produce less energy.
  • Some solar companies are sketchy: Like in any booming industry, some salespeople want to make a quick buck and might say anything to close a sale. It’s important to read your contract carefully, especially if you finance or lease a system.

» MORE: Solar energy pros and cons

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.

Do you own or rent?

Delaware solar FAQs

Does Delaware really pay for solar panels?

We are not aware of any programs for free solar panels in Delaware at this time. However, the state’s net metering and SRECs, along with the federal solar tax credit, make the upfront costs worth it for many homeowners. You can also lease equipment for little to no upfront costs, but you won’t be eligible for the federal solar tax credit or some of the best local solar incentives.

» FREE SOLAR PANELS: Are they really free?

How is net metering different from SRECs?

Net metering and solar renewable energy credits (SRECs) are related but distinct concepts. Net metering helps Delaware solar panel owners save on their electric bills by allowing them to use the grid for excess energy storage. SRECs provide an opportunity to earn money by selling the environmental attributes of their solar electricity production. Both are integral to the incentives that drive solar adoption in Delaware.

Do solar panels increase property taxes in Delaware?

Possibly. Residential solar installations are not exempt from property taxes in Delaware. If solar panels increase the value of your house, then your property tax bill could also go up.

How does the federal solar tax credit work?

The federal solar investment tax credit (ITC) reduces your federal income tax liability by 30% of what you spent installing solar panels on your home. It’s nonrefundable, meaning you can only claim up to the amount of tax you owe for the year. In other words, you won’t get the excess amount refunded to you if the credit is larger than your tax bill. However, any unused portion of the credit can carry over to reduce the taxes you'll owe in future years.

Is it cheaper if I install solar panels myself?

It’s potentially cheaper to install solar panels yourself. It’s also tricky and dangerous if you don’t know what you’re doing, especially for a large residential project.

» DIY solar panels: Pros and cons

How long do solar panels last in Delaware?

Solar photovoltaic (PV) technologies, more commonly known as solar panels, are designed to last 25 to 30 years.

How do I choose a solar installation company?

The best solar energy companies have a few things in common: great reviews, transparent contracts, reliable equipment and comprehensive warranties. When hiring a solar installer in Delaware, look for companies with years of experience in Delaware and good local reputations. Get multiple quotes from different solar companies to compare prices and services.

Be cautious of companies that provide significantly lower quotes than others — this may indicate lower quality.

» TIPS: Get the best solar quotes

Bottom line: Is going solar in Delaware worth it for you?

Buying solar equipment is expensive, especially if you need a battery for storage. For a lot of homeowners, it’s worth it as long as the cost savings outweigh the initial investment over time. If you can afford it, buying your solar energy system outright typically provides the highest return on investment. You own the system from day one and receive the benefits of available tax credits, and you don’t have to pay interest on a loan.

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.

Solar costs and saving: Delaware vs. nearby states

*To fully offset energy usage; **Over 25 years

» EXPLORE: Solar energy statistics


Guide 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:
  1. DSIRE, "Delaware Programs." Accessed March 2, 2024.
  2. EnergySage, “The cost of solar panels in Delaware.” Accessed March 2, 2024.
  3. SolarReviews, “How much do solar panels cost in Delaware, 2024?” Accessed March 2, 2024.
  4. Solar Energy Industries Association, "Delaware Solar." Accessed March 2, 2024.
  5. Office of Energy Efficiency & Renewable Energy, "Homeowner's Guide to the Federal Tax Credit for Solar Photovoltaics." Accessed May 16, 2024.
  6. Delaware Department of Natural Resources and Environmental Control, “Considerations for installing solar panels in Delaware.” Accessed April 18, 2024.
  7. Solar Delaware, “Delaware Solar Policy.” Accessed March 11, 2024.
  8. U.S. Environmental Protection Agency, “Solar Power Purchase Agreements.”  Accessed March 11, 2024.
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