Delaware Solar Rebates and Incentives

How Much Can You Save on Solar in Delaware?

Key Details

• Delaware receives an average of 4,234 hours of annual sunlight
• Solar installation costs dropped by 52% between 2012 and 2022 with average cost per watts at $2.56 per watt.
• As of 2023, Delaware offers no local property tax exemption for residential solar users
• Available incentives available include federal tax credits (30%), the Solar Renewable Energy Certificate Program (20 year lifespan), and Net Metering (lifespan dependent on generation)

Delaware Energy Profile

Delaware receives 4,234 hours of annual sunlight, which is roughly the national average. As of 2021, solar installations generate over 175 megawatts. Delaware expects to install up to 558 MW by 2030.

As of 2023, Delaware was home to nearly four dozen solar companies, including 9 manufactures and 23 developers/installers.

Some of the top industrial solar farms or power plants in the state:

• Mildred Solar Farm generates up to 15 MW.
• Dover Sun Park generates up to 11.5 MW in solar energy.

Delaware Solar Tax and Incentives at a Glance

How Cheap or Affordable is Solar Energy in Delaware?

According to the U.S Energy Information Administration (EIA), the average retail price for grid electricity in Delaware is 10.5 cents per kilowatt-hour. On the other hand, the average cost of solar panels per watt is $2.56 per watt.

Solar panels are also cost-effective in the long run; they pay for themselves within a few years of installation. Most panels have a lifespan of more than 20 years.

Solar users can also receive renewable energy incentives in Delaware. For example, the Delaware tax credit for solar panels offers a 30 percent discount on installed solar systems.

An average-sized household requires at least a 6 kWh PV system for its energy needs. It costs about $15,300 to install a 6 kWh system in Delaware. Thanks to the federal tax credit, people who use solar energy can cut their costs by 30%.

For a 6 kWh system installed in 2021, you'll get $3,366 in tax credits. However, the rate is higher for systems installed from 2022 to 2032. You'll get $4,590 in tax credits, which is 30 percent of the cost of installation.

Federal Solar Tax Credit in Delaware

The federal tax credit is a renewable energy incentives in Delaware. It offers a 30 percent discount from the cost of installing solar systems. Solar users get this discount in the form of tax credits when they file their annual tax returns.

However, the federal solar tax credit is not at a set rate. The discount rate depends on when you installed the system. Here's the rate schedule for PV systems under the federal solar tax credit:

• PV systems installed after August, 2022 will get a 30 percent discount
• This rate also applies to PV systems installed between 2023 and 2032. From this period, the rate will decline till it gets to zero in 2035. For example, the Delaware tax credit for solar panels will fall to 26 percent for systems installed in 2033. Furthermore, solar users will get 22 percent for PV systems installed in 2034.

So, what Expenses will the Federal Solar Tax Credit Cover in Delaware?

The federal tax credit will cover these expenses:

• Solar panels and cells
• Solar wiring, inverters, and storage devices with capacities of up to 3 kWh.
• Labor cost of site preparation, inspection, and installation

Eligibility

Delaware's solar users are eligible for the federal solar tax credit under these conditions:

• The user installed the system between 2017 and 2034.
• The user owns the system either through an upfront payment or a loan. Users who are stakeholders in a community-owned project are also eligible.
• The solar system is put in place at the user's main or second home in the US or one of its territories.
• The PV is not used or refurbished.

How do I claim the Federal Solar Tax Credit in Delaware?

Here's a quick step-by-step guide to claiming the Delaware tax credit for solar panels:

Step 1. Check if you're eligible to receive this incentive.
Step 2. Download the IRS Form 5695, Schedule 3 of 1040, and 1040 form. The 1040 is for all information on your taxable income in a year. On the other hand, the Form 5695 is where you fill out the tax credit for solar installations.
Step 3. Complete the form 5695 by filling out these details:

• The gross cost of solar installation. Check the invoice from your solar installer.
• The expenses on other renewable energy installations.
• Add tax credits being rolled over the previous tax year.

Step 4. Determine how much tax you owe on form 1040.
Step 5. Deduct your solar tax credit from the tax liability. If the credit exceeds your tax liability, you must rollover the excess credit to the next tax year. Ensure to write down the rolled-over tax credit in line 16 of Form 5695.
Step 6. Include the solar energy tax credit in line 5 of the Schedule 3 in 1040.
Step 7. Send the completed tax form either via third-party tax companies. On the other hand, you may send it directly to these locations.

Department of the Treasury
Internal Revenue Service
Kansas City, MO 64999-0002

Internal Revenue Service
P.O. Box 931000
Louisville, KY 40293-1000

Net Energy Metering in Delaware

Net metering is one of the popular renewable energy incentives in Delaware. It is a contract between renewable energy users and the state's electric utility companies. Qualified users get rewarded with energy credits for generating excess electricity from renewable energy sources. For any extra power made, utility companies will pay these credits at the current retail rate.

To access this program, you must be a customer of Delaware Electric Co-Op, Inc. (DEC) and Delmarva Power and Light (DP&L). Each utility comes with a set of rules and guidelines for net metering participants.

Here are the interconnection requirements for DP&L customers.

• Residential solar panels must have a capacity of less than 25 kWh.
• PV systems situated on farms should not exceed 100 kWh.
• Non-residential PV systems must not exceed 2 MW in capacity.

For DEC customers, the interconnection requirement is:

• Commercial PV systems must not exceed 500 kWh in capacity.

Here's a case study on how net metering works in Delaware.

Carrie installed a 6 kWh PV system. Then, she connected it to the DP&L utility company for net metering. The PV system generates 750 kWh per month. If she used only 500 kWh in a month, the utility company would pay in credits for the excess power generated. The credit is deposited into the net meter installed at her residence.

What happens if she consumes more energy in the next month? For example, Carrie used 1,000 kWh of energy in the next month. Since her PV system only generates 750 kWh, she'll use the available credits to fill the gap.

How to Enroll for Net Energy metering in Delaware

You can enroll in net metering in Delaware by following these steps. In this guide, we'll explore the unique enrollment process for each electricity utility company.

Here's how to enroll for net metering with Delmarva Power:

• Step 1. Visit Delmarva's online application site. The company canceled mail-in or in-person applications in January 2022.
• Step 2. You'll need to create an account to access the online application.
• Step 3. Upload the pre-application form before you proceed with the online application process.
• Step 4. Fill out the application and upload the necessary documents.
• Step 5. Then, monitor the user dashboard. Delmarva provides a real-time update on the application status.
• Step 6. The company will send an invoice for the application fee
• Step 7. After getting approval, the solar user or contractor will install the system.
• Step 8. Next, visit the application page to complete the second part of the application.
• Step 9. Delmarva Power will complete the remaining steps and give you permission to operate.

You'll also need to upload the following when enrolling for net metering at Delmarva.

• For Level 1 (an inverter-based 10 kWh or less solar panel), upload the Interconnection Application/Agreement Level 1

• For Level 2 (less than 2 MW solar panel), upload the Interconnection Application/Agreement Level 2 to 4.

• For Level 3 (50 kWh or less solar panel that's used for area networks), upload the Interconnection Application/Agreement Level 2 to 4. Also upload the document for a 10 MW or less solar panel used in radial distribution circuit.

• For Level 4 (10 MW or less solar panel), upload the Interconnection Application/Agreement Level 2 to 4.

• For solar users using aggregated net metering, upload the Application for Delaware Aggregated Net Energy Metering.

• Upload the DPL DE CEF Site Control Affidavit if it's a community energy facility.

There's no application fee for solar panels under level 1 category. However you'll pay $50 as an application fee for solar panels under level 2. The fee is $100 for level 3 and 4 solar panel categories.

Step-by-Step Guide on How to Enroll for Net Metering with DEC

1. Download the interconnection application form.

2. Fill out sections 1 to 12 and Addendum A.

3. Send the completed form and a $50 application fee to this address.

   Delaware Electric Cooperative, Inc.
   ATTN: Interconnection Application
   PO Box 600 Greenwood, DE 19950

You may also send the form via email to this address: interconnection@delaware.coop.

Delaware Property-Assessed Clean Energy (PACE) Financing

Delaware offers Property-Assessed Clean Energy (PACE) financing options. However, this program is only accessible to commercial properties. With PACE financing, you receive loans to cover the cost of solar installation. In exchange, you'll repay the loan through an increased property tax. To qualify for Delaware's C-PACE program, the property must have one of the following uses:

• Agricultural
• multi-family apartments (which must contain more than five units).
• Industrial
• Commercial
• Non-profit.

Also, the cost of solar installation must be higher than $50,000.

So, what are the interest rates for C-PACE in Delaware?

Quality capital providers are responsible for setting the interest rates in the C-PACE financing option. Solar users may get an interest rate of 5 to 5.5 percent for a 10-year C-PACE loan term. The interest rates may rise to 6 percent for 20-year terms.

State Sales Tax Exemptions in Delaware

Delaware does not have a sales tax exemption. So, you can't get a reseller certificate or a sales tax exemption certificate in the state. That said, the state imposes gross receipt taxes on all purchases, including solar equipment. Fortunately, the Delaware tax credit for solar panels is an alternative option for solar users. You can include the sales tax as an expense on your annual tax.

Local Solar Rebates

Delmarva Power Green Energy Program

The Delaware Power Green Energy Program is a grant that helps to offset the cost of installing clean energy equipment. This means it covers green energy equipment ranging from solar panels to solar heaters to wind turbines. Also, people who use solar energy for their homes or businesses can apply for this grant online. To send an application, you must upload these documents:

• A copy of an energy audit file.
• A copy of project estimate
• A solar shade analysis
• A recent electric bill from the address where the solar system was installed.

Most importantly, register as an e-supplier with the Delaware Division of Accounting. This is a prerequisite for applying for the grant.

Keep in mind that there's a high demand for the grant. So, expect a delay in grant payment after getting approval.

What is the rate schedule for the Delmarva Green Energy Program?

You will receive $700 for every kWh of solar power installed. However, this grant does not pay more than $6,000 for home solar installations.

Delaware Electric Cooperative (DEC) Green Energy Program

The Delaware Electric Cooperative's (DEC) green energy program gives cash rewards to people who use solar energy to power their homes. This program covers cash rewards for solar energy generated within a 12-month period.

There are two main categories in this program: Class A and Class B. These classes may determine how much you get.

The Class A category is for solar systems that generate less than 50 kWh within one year. On the other hand, Class B covers PV systems that generate over 50 kWh within the same timeframe.

Both classes A and B will receive $0.35 per watt for the first 5 kWh generated. Furthermore, the rate falls to 0.20 after the first 5 kWh. Solar users in Class A can only receive a maximum incentive of $2,000 per year. On the other hand, Class B users will get $3,500 for generating solar power.

Delaware Municipal Electric Corporation (DEMEC) Green Energy Grants

The DEMEC is a financial grant that's accessible to customers of the Municipal Electric Corporation. This program came into existence via the Renewable Energy Portfolio Standard.

Through this program, solar users can receive up to $1,000 for every kWh installed. However, the grant had a maximum limit of $3,500. Furthermore, you must install at least a 5 kWh solar panel to access this incentive.

So, how can I apply for the DEMEC green energy grant?

Step 1. First, download and fill out the Green Energy Program Grant Reservation Application..

Step 2. Next, attach these documents to the completed application:

• The name and type of renewable energy system
• A copy of the project estimate, including a purchase order.
• A recent municipal electric bill that's contributing to the green energy fund.
• Building permits. Not all jurisdictions request this document.
• Design plan of the PV system (this only applies to ground-mounted systems.
• A roof diagram that covers these details: the dimension, areas of shading, tilt, and location of collectors or modules on the roof.

Step 3. Next, send these documents to the DEMEC at:

Delaware Municipal Electric Corporation
22 Artisan Drive
Smyrna, Delaware 19977
Phone: (302) 653 - 2733
Fax: (302) 653 - 2734

Delaware Property Tax Exemption

As of 2023, Delaware offers no local property tax exemption for residential solar users. This means you'll pay a higher property tax for adding a solar system to your property. In addition, the property tax will increase in line with the cost of the solar panel. However, solar users can access renewable energy rebates and incentives, which makes it easier to pay property tax.

Delaware Household Profile

Per the EIA's 2021 report, Delaware consumed 279.4 million BTUs of energy per capita. The state's consumption is slightly less than the national average of 280.1. The report covers energy consumption in these sectors:

• Residential sector (63.4%)
• Commercial sector (56.4%)
• Transportation sector (73.5%)
• Industrial sector (86%)

Delaware consumed 11.5 terawatt-hours of electricity in 2021. This is less than one percent of the total energy consumption in the US. In the same year, the state also generated 8.6 TWh of electricity from renewable and non-renewable energy sources.

According to the EIA report, Delaware generated 84 percent of its electricity demand from natural gas. As of 2023, natural gas powered seven out of 10 of the state's power plants. Coal-powered plants supply 7 percent of the state's net generation. On the other hand, renewable energy sources contribute 7 percent to the electricity demand.

What are the major renewable resources in Delaware?

Solar energy, biomass, and wind energy are the major renewable energy sources in the state. As of 2023, small and large solar panels made up 5% of the state's net electricity generation. There are almost a dozen utility-scale solar facilities in the state.

Biomass fuels two of the state's power plants. This energy source is in the form of landfill gas. Note that the state is constructing another biomass-powered power plant that will run on chicken manure.

As of 2023, Delaware has a 2 MW wind turbine. The state also contributes to Skipjack, an offshore wind turbine. Located about 19 miles (30.5 kilometers) from the southern Delaware Atlantic coast, the project is predicted to generate up to 120 megawatts before the end of 2023.

Note: Delaware has no industrial-scale hydroelectric power plant. Also, the state doesn't make its residents buy all of their electricity from renewable sources. However, utility companies must get 10 percent of their electricity from renewable energy.