Your 2020 guide to getting solar panels for your home in Delaware
This page is a complete guide to the complicated and sometimes confusing process of installing solar panels on your Delaware home. Since there's a lot to consider, we've separated the page into sections to help you find what you are looking for. If you find this page useful, please share it with someone who might also find it interesting!
** What's new for 2020 **
Delmarva Power now offers a nice solar rebate program called a Green Energy Grant if you’re looking to install solar on your home in Delaware. There’s a cap of 6 kilowatts (about a 25 panels), and that grant would net you about $3,000. Not too shabby!
Delaware has also carved out 3.5% of it’s ambitious state renewable energy standard to come from distributed solar generation by 2027, like panels on your rooftop. That’s a strong move. Coupled with this requirement is an incentive which pays homeowners $32 per Solar Renewable Energy Credit (SREC) generated by home solar panels. This works out to about $500 annually over the 20 years. Solid. Read on to learn more about how all the programs for home solar work in Delaware!
Questions? Our network of solar experts are on call to assist you. Simply sign up for personalized assistance on our special solar deals page. You can get discounted on-grid pricing as low as $4,000/kW! This is paired with the Delaware solar incentives you see below.
What you'll find on this page:
The Solar Strategy section is focused on the 3 ways of paying for solar in Delaware, so you can decide which is best for you. We've created a tool that asks you a few questions and recommends whether you should pursue a solar lease, loan, or outright purchase. Then, we provide detailed analysis of how each works.
The Policy Information section contains all our latest research on the rules set by lawmakers and the Public Utilities Commission, which determine how easy it is to go solar in Delaware. These policies and rules govern everything from renewable energy mandates to interconnection, and have a huge effect on the viability of solar.
Finally, the Solar Incentives section includes information about money-back rebates and grants, tax credits, and tax exemptions for going solar in Delaware.
Click any of the boxes below to go to that section of the page, or scroll down to read the page in order.
|Your Delaware Solar Strategy|
|Comparing Solar Investment Options|
|Paying Cash for Solar in Delaware|
|Solar Loans in Delaware|
|Solar PPAs in Delaware|
|Solar Purchase Payback Time in Delaware|
|Delaware Solar Policy Information|
|Renewable Portfolio Standard (RPS)|
|RPS Solar Carve-Out|
Your Solar Strategy in Delaware
Figuring out the best way to go solar in Delaware can be a little daunting. From loans and leases to power-purchase agreements, there are a lot of options out there. To help you pick the one that might be best, we've created the handy decision tool below.
We'll ask you a few simple questions about you and your home. Once you're done, we'll recommend a good option. Further down this page, we provide cost estimates and example return-on-investment calculations for all the various options:
How to pay for solar panels in Delaware
According to the U.S. Energy Information Administration, the average home in Delaware needs over 11,000 kWh per year, and for the privilege of that energy, you'll pay somewhere around $1,475. That's a ton of money! If you design a home solar system to produce that much electricity, you'd need thirty 325-watt solar panels, for a total system size of 9.8 kW. The cost of your system would be just about $27,000 up front, but solar incentives in Delaware and the U.S. will take care of a huge chunk of that. You can pay your system off in just 11 years with savings on electricity, and enjoy another 14+ years with free energy from your solar panels.
The chart above shows the 25-year returns for an investment in solar whether you choose to purchase a system with cash or pay over time with a loan or PPA. The cash purchase option leads to the highest dollar-amount returns over time, but it also requires a big up-front investment. If you take a solar loan or home equity line of credit (HELOC), though, your payments over 15 years will be only a little more than your savings, and you'll still come out tens of thousands ahead in the end. The option with the smallest savings is a Power-Purchase Agreement (PPA), which means you put $0 down on a rooftop solar system and pay monthly while you accumulate electricity bill savings over time. PPAs are an excellent option if you don't have any equity or cash to put down.
Read on to find out more about each option for going solar in Delaware.
Option 1: Paying cash for solar
An outright purchase used to be the only way to get solar, and it's still the option that provides the best dollar-for-dollar returns. The reason it's so great is that you own the system from day one and reap all the benefits. The Federal solar tax credit and state rebate programs combine with electricity savings to bring your first-year costs way down.
In our example, you put down $27,000 up front, but by the end of year 1, incentives and energy savings will erase a bunch of it. Over 25 years, your system will have produced nearly $32,000 in income.
But even though that sounds huge, look into the solar loan option too, because taking a loan to buy an income-generating asset means you'll be making money as you pay for it.
Here’s how the numbers pencil out when you pay up front for a 9.8-kW rooftop solar system in Delaware:
- Installing an average-sized (9.8-kW) solar system should start at about $27,000 after Delaware's $3,000 soalr rebate. Don’t worry! With tax incentives and energy bill savings, your first-year costs will be considerably less than that.
- Next comes the federal solar tax credit, which gets you 30% of the post-rebate cost of your system off your tax bill next year. That's $8,100, for a net cost of $18,900.
- After the tax credit we subtract your first year’s energy savings, which we estimate to be about $1,475. That reduces your first-year costs to only $17,425.
- Your system will pay itself back in 11 years, and over its 25-year life, you'll see a total net profit of $31,500, after the system pays for itself. That's an internal rate of return of 9.4%. Huge!
- And don't forget... your home's value just increased by more than $19,000, too (your cost after incentives)!
- In addition to all that cash (and home value), you’ve created some green for the earth as well by not using electricity from fossil fuels. It's like planting 191 trees a year, every year your solar power system is humming.
Keep in mind, the numbers above are based on an average home in Delaware. If you're ready for a custom quote for a solar panel system, our network of experts are on call to assist you. Simply sign up for personalized assistance on our special solar deals page.
Option 2: Using a loan to pay for solar
Don't have $25,000 sitting around to pay for solar? No sweat! As long as you have equity in your home, you can still own solar panels and reap all the benefits. Heck, even if you do have the cash, getting a loan to pay for solar is still the best option when it comes to percentage return on investment.
That’s because using a loan to pay for solar is like investing in a really sweet IRA. Making your loan payments almost like funding an investment account, because the solar panels on your roof produce income (returns). Once the loan is paid off (fully vested), you're making over $2,100/year in profits, netting thousands over the 25-year life of your system.
A solar purchase like this will make sense for you if the following is true about you and your current situation:
- You can get a solar loan or home-equity line of credit (HELOC) for $27,000, with a fixed rate of 4.5% or lower and a 15-year repayment period.
- You love making money without much risk
The reason this works so well is that you don’t have to put any money down, but you still get all of the incentives that go along with buying solar. You'll get the 30% federal tax credit in year 1, and the energy bill savings will start right away. Like we mentioned above, your loan payments will be a tiny bit higher than those energy bill savings, so you'll end up spending about $83/month for solar in the first year. That difference will come down each year as electricity prices rise, but your system will keep on producing about the same amount of electricity.
Here’s how the numbers pencil out for a Delaware solar purchase with a solar loan:
- Installing a typical 9.8-kW solar system should start at about $27,000 after Deleware's GreenGrant program payment of $3,000. That's how big your loan will need to be to cover it.
- The electricity you'll save in the first year of operation would have cost $1,500, but your loan payments will total $2,500, for a difference of $1,000, or about $83 per month.
- That's not so bad when you consider your federal tax savings for the year will be $8,100 (30% of the cost of your system). You'll come out $7,100 ahead in year 1, which eliminates the burden of loan payments for the whole loan.
- The benefits of that early tax break are so great that you'll never begin spending your own money. And after the loan is paid off, your profits stack up just like if you bought the system outright. You'll end up with $21,400 in profits over our 25-year example.
- On top of the green that will stay in your pocket, your system will mean green for the environment, too. 191 trees-worth, every year!
Keep in mind, the numbers above are based on an average home in Delaware. If you're ready for a custom quote for a solar loan, our network of experts are on call to assist you. Simply sign up for personalized assistance on our special solar deals page.
Option 3: Buying the electricity, not the panels with a Power Purchase Agreement (PPA)
Delaware residents have long enjoyed the ability to get solar from a third-party company and pay monthly, and PPAs are still a great way to go. The state legislature and public utilities commission are way into getting ordinary homeowners into solar, so there isn't much reason to worry that utility companies will start trying to impose monthly fees on solar homeowners like they have in some less-progressive states.
For now, a PPA for a 9.8-kW solar system can save you about $20 per month, which might not seem like much, but adds up to big money over the 25-year life of the PPA. We're talking $9,000 over the long term.
How a solar PPA works
If you don't have a lot of equity, income, or cash, solar PPAs can be a good option. They work because the solar company can take advantage of incentives offered by state and federal governments to bring their costs down. The solar company fronts the money for the system, installs it on your roof for free, and sells you the energy for a set amount over the long term to recoup their costs and make a profit. It's a win-win, because you save a bit compared to the utility price of electricity.
For Delaware solar PPAs, we estimate the starting price per kWh of electricity will be $0.11, compared to an average retail electricity price of $0.13. PPA contracts include an "escalator clause," which raisies that price by a certain amount every year, and our calculations account for a 2% annual increase, while the average utility price increase over time is closer to 3.2%. That means you save a tiny bit more each year (on average) than the previous year, and your savings grow and grow. For more information, read our article about solar PPAs.
Keep in mind, the numbers above are based on an average home in Delaware. If you're ready for a custom quote for a solar PPA, our network of experts are on call to assist you. Simply sign up for personalized assistance on our special solar deals page.
Delaware Solar Policy Information
Ever wonder why solar seems to be everywhere in some states, but not in others? We did too.
State legislatures and public utilities commissions can enact rules to make solar power accessible for everyone. Favorable rules explain why some of the cloudiest states—New York, New Jersey, and Connecticut, are doing so well with solar, and yet some of those with the most natural solar resources—like Alabama, Mississippi, and Georgia—are doing so poorly.
Below is important information about the public policy, rules, and economic reasons that affect your ability to go solar here in Delaware:
Delaware's Renewable Portfolio Standard
25% by 2027
A Renewables Portfolio Standard (RPS) requires utilities in the state to eventually source at least a certain percentage of their electricity from clean, renewable sources like solar panels.
Delaware has a strong RPS, mandating 25% renewable energy by 2025-2026 (compliance years run from June to May). The current minimum level of renewable energy is 11.50% of total retail electric sales. That requirement will raise by 1.5% per year through 2019-2020, and then by 1% per year through 2025-2026.
Delaware’s RPS is critical to strong renewable energy policy. Utility companies aren't really all that gung-ho about you producing your own power. After all, it costs them money when you use less of their electricity. They also don’t naturally want to give you big payments for energy you're feeding back into the grid. The main reason the utilities are aiding your transition to lower electric bills and offering you incentives to put solar on your roof is because the state forces them to. If the utilities don't hit their RPS numbers, they have to pay large fees back to the state.
Delaware's Solar carve-out and SRECs
3.5% by 2027
Delaware has carved out 3.5% of it’s ambitious state renewable energy standard to come from distributed solar generation, like panels on your rooftop. That’s a strong move. Coupled with this requirement is an incentive which pays homeowners $32 per SREC generated by home solar panels. This works out to about $500 annually over the 20 years. Solid.
Delaware Electricity Prices
Delaware pays an average of 13 cents/kWh of electricity. That’s just slightly below the national average of 13.6 cents per kWh. Yes, we know those dimes and pennies add up. Yes, we know you hate that monthly electric bill. But that’s only until you’ve made the switch to solar power! Those pennies per kWh do indeed add up. Right now they add up to higher bills, but once you’ve made the switch to solar, they create more savings!
Not to mention, electricity costs are only going to rise. Currently, far too much of our energy comes from nonrenewable, dirty fossil fuels. As the long-term costs associated with fossil fuels start to really kick in, standard electricity prices are going to skyrocket. When that happens, you’re going to look like a modern-day Einstein for having made the early switch to producing your own power.
Delaware Net Metering
Net Metering requires your utility to monitor how much energy your solar power system produces and how much energy you actually consume to make sure you get credit for the surplus.
Delaware’s net metering law is straightforward and pretty much perfect. Any net excess generation (i.e. any surplus electricity) you produce is applied to your next bill as a credit at the full retail rate. If you run a surplus for a full 12-month period 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 credit rolling over onto your bill indefinitely.
Delaware Interconnection Rules
Delaware has standardized interconnection rules for system sizes up to 10MW, but charges fees to applicants for systems sized larger than 10-kW, which can apply to home systems for just-greater-than-average sized homes. We'd like to see fees lifted for all interconnection requests for residential systems. For the average homeowner, an interconnection request will not be too onerous a task to complete, and for those who need systems larger than 10-kW, you're looking at a minumum $60 fee, with a max of probably $75 for very large home systems. All-in-all, not too bad. Let's call it a B+ and be done with it!
Delaware Solar Incentives
Next to high electricity prices and net metering, solar incentives have traditionally been the most important factor for whether home solar power makes financial sense in a state. In the past, some states with otherwise lousy policy had tremendous incentives that drove down the up-front cost of going solar so much that homeowners could save oodles of money even without net metering or a good RPS.
These days, the big incentive most people can get is the Federal Solar Tax Credit that earns you 26% of your total system costs back after just 1 year. State incentives play less of a role than in the past, but some really good ones are still out there, ready to help homeowners go solar and save money before you know it.
Let's see how Delaware measures up:
The availability of state solar incentives for residential solar systems was sourced from the Database of State Incentives for Renewables and Efficiency, utility company websites, and the state public utility commission.
Delaware Solar Power Rebates
$500 / kW up to 6kW (Delmarva)
Delmarva Power offers a nice solar rebate program called a Green Energy Grant if you’re looking to install solar on your home in Delaware. There’s a cap of 6 kilowatts (about a 25 panels), and that grant would net you about $3,000. Not too shabby! Your installer will help you apply, click here to get started.
Delaware Solar Tax Credits
Delaware lacks any tax credits for solar power. Given the strength of the state’s performance payments and rebates, we can’t raise too much of a stink about the lack of a tax credit here. That said, every little bit does count, and we certainly wouldn’t complain if a solar tax credit were added to bring your costs down even more.
Property Tax Exemption
Delaware also lacks any tax exemptions for solar power systems. Of course, Delaware has no sales tax, so that exemption (that we see in many states) simply doesn’t apply here. What does apply, however, is the missing property tax credit. That’s kind of a big deal. And by kind of, we mean a really big deal! When you add a solar power system to your home, your home goes up in value by twenty times your annual electricity savings. That means your property taxes also go up. Passing an exemption for those property taxes is an easy way to save you money on your solar power system, making the switch easier for you without the state ever having to actually remove money from its coffers.
Sales Tax Exemption
No State Sales Tax
No state sales tax means no need for a sales tax exemption, and an automatic "A" grade for Delaware!
Low-income Solar Programs
Grade: FLearn more about low-income solar programs available in the U.S.
The consensus on Delaware solar power rebates and incentives
Solar power is looking sunny here, indeed! Though there is always room for improvement — (cough, cough) property tax exemption — we’re pretty happy with Delaware’s legislators. With the RPS’s built-in purchase program backing a strong SREC market and solar power rebates available across the state, Delaware boasts huge up-front discounts, low year one costs, and one of the shortest payback timeframes in the country. This is one of the easiest “A” marks we’ve ever given out.
Again, if you are confused about how these numbers work and would like some personalized assistance or a quote of your own, simply connect with our network of solar experts. They’ll help sort out all the pricing, get you access to special deals, and they’re super friendly to boot!