Delaware Solar Incentives: Tax Credits & Rebates Guide (2022)

By Britt Olizarowicz

As you start your research into the best solar incentives for your home or business, you will quickly learn that there is quite a bit of change from one state to the next regarding program offerings and options. Unfortunately, the state of Delaware’s solar rebates is not all that great. However, if you are looking for all of the best Delaware solar incentives, our guide will provide the following:

The good news about the state of Delaware are the local SRECs (Solar Renewable Energy Credits), Interconnection discounts, and overall incentives offered by local electric utility companies. If you are ready to look at more localized options, you may find the state of Delaware to be a good option for going solar.

Why Go Solar in Delaware?

Delaware currently ranks 41st in the nation according to SEIA for being solar-friendly. One of the main reasons that Delaware ranks so far down the list is the lack of incentives and the eligibility requirements for existing incentives. However, if you can afford the cost of solar panels, the renewable resources that you create will be well worth it.

Not only do Delaware homeowners go solar to save money on their electric utility bills, they also want to create green energy in the state and improve the renewable portfolio standard. Whether you are a business or residential property in Delaware there is no denying the fact that solar electricity will be the way of the future.

Programs in Delaware by the DNREC have a Renewable Portfolio Standard (RPS) and will continue to push for more solar-powered properties and homes in the state. Even though Delaware is not known for being the best state for solar power, the steps are in place to start improving this.

Delaware Solar Cost

Delaware solar costs are about average ranging from $16,000 to $24,000 for a whole home system. When looking at a photovoltaic (PV system), the size of your home will also come into play. As you add more panels, the inverter will also be modified to improve the system’s functionality.

The solar costs in Delaware have started to go down a little because of incentives from local governments for both business and commercial installations. However, when you shop for a solar system in Delaware, you must make sure you have done your research prior to the installation.

Some of these rebates and incentives require a specific installer or a specific unit to be installed. Recuperating your money after a solar installation can be a bit troublesome if you don’t follow the recommendations set forth by these programs.

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How Much Can You Save on Solar in Delaware?

In the state of Delaware, the total amount you can save with the federal tax rebate program for a new solar power system is around $5,000. Unfortunately, there is no state-level rebate to help improve the overall costs of the solar system in Delaware. However, some excellent programs for homeowners and business owners to get involved in can help them save money on loans or use the products year after year.

The Best Solar Incentives, Tax Credits, & Rebates in Delaware

The best solar incentive in the state of Delaware is the Federal Solar Investment Tax Credit (ITC). This program is a great way to help homeowners keep energy costs down and also get a sizeable tax return the year they put their system in place. After the federal program, the best thing to look for is the local programs created by some Delaware utility providers.

Incentive Summary End Date
Federal Solar Tax Credit (ITC) Delaware residents can take advantage of the Federal Solar Tax Credit and get a discount of up to 26% applied to their tax returns. If you purchase $20,000 worth of solar panels, you can get a credit for more than $5,000 on your next tax return. Remember, this does require you to come out of pocket first. December 31st, 2023
Net Metering Net metering allows homeowners that create excess energy to use it as a credit on their next electric bill. Net metering in Delaware is a strong program allowing people the retail rates of electricity when they bank excess. None
Commercial Loan Programs For government and commercial solar installations in Delaware, there are various programs to help improve overall rates and availability of funds. Some of these can help with loans over $100,000. None
Delaware No Sales Tax The state of Delaware does not have sales tax, so you will save yourself hundreds, if not thousands of dollars on sales tax. None

Federal Solar Investment Tax Credit (ITC)

The Federal Solar Investment Tax credit is available in all 50 states, Delaware included. This program will discount your next federal tax return based on your home solar installation cost. As great as this program is in the state of Delaware, it is a temporary option that will not be available for all that much longer.

The ITC allows you a tax credit of up to 26% of the cost of your solar installation. The solar system will need to be paid out of pocket and in full, with credit being returned and filed against any taxes you owe for that year. Some homeowners that don’t owe taxes will be able to carry this credit over for several years. You can speak to a tax accountant about the specifics of this.

It’s important to note that this Federal tax credit will drop from 26% to 22% in 2023. In addition to decreasing the total amount of savings, the bill is set to expire at the end of December 2023. By the year 2024, it will be considerably more expensive to go solar in Delaware. Many Delaware homeowners worry about combining a tax credit with a home energy loan program or additional program, but that is an option in the state of Delaware.

Delaware Solar Energy Tax Credit

Delaware, unfortunately, does not have a solar energy tax credit or rebate. Some states have an additional savings program that can be very beneficial and help save, but Delaware only keeps their rebate or tax credit to the federal level.

Delaware does offer an SREC program that allows homeowners to earn money for the energy that they can produce on their own. Large utilities in the state or collecting most of the available SRECs, so it is hard for homeowners to get involved in this game.

Net metering is a much better option for Delaware residents.

Delaware Solar Sales Tax Exemption

Delaware does not have a sales tax. Therefore commercial and residential purchasers of solar-powered systems will not have to pay sales tax on their solar panels or the installation. This huge benefit does not happen across other states, and it could save you thousands of dollars on your installation.

Delaware Solar Property Tax Exemption

Property taxes will increase with the installation of a solar system in Delaware. Unfortunately, there is currently no program to help lower the property taxes that homeowners pay when installing a solar power system in the state of Delaware. The good news is that typically the property taxes will go up over time and not all at once; you can keep an eye on this and prepare for it financially.

Delaware Net Metering

Delaware net metering is one of the better policies that the state offers. There are programs in place that require utility companies to offer net metering, and the rate they pay per kilowatt hour is the same as the retail rate. With Delaware net metering, you can stockpile electricity that you don’t use on certain days and get it back free of charge on the days when you need it.

Sometimes on a cloudy day, you may struggle to have the energy to run your air conditioner or your washing machine. Luckily with net metering, it still may not cost you very much to keep your house up and running. This is one of the most beneficial reasons to put in a solar power system in Delaware.

Delmarva Power – Green Energy Program Incentives

As we mentioned, there are quite a few local programs in Delaware that can help you save money on your solar panel installation. One of those is the Delmarva Power Green Energy Program Incentives. This is available to residential homeowners in Delaware.

The program provides Solar PV, Wind, and Solar Water Heating rebates. With a Solar PV residential system, expect to save $.70/W. There are also additional savings for Solar Water Heating of $1/kWh. These programs have requirements that must be in place before earning anything. In addition, you may have to have the system installed by a qualified professional for it to be eligible.

Delaware Electric Cooperative – Green Energy Program Incentives

The Delaware Electric Cooperative Gren Energy Program Incentives are for Solar Thermal, PV, and even Geothermal energy solutions. With the PV system, expect $2,000 for Class A, $2,500 for Class B, and with Solar Thermal, you can get $2,500 for residential.

These systems must have a warranty in place, and they typically need to be installed by a participating contractor. Some programs allow for a self-install, but it must be discussed before the installation. Again, doing your research will make you eligible for much more in Delaware.

Commercial Delaware Solar Incentives

The commercial Delaware solar incentives are strong and will allow for a few extra benefits and loan programs that the residential programs do not offer. Delaware is a good place to be if a solar panel system could help your company or business with its green initiatives. Similar to residential, don’t expect a state-level tax incentive as you won’t find one.

Solar Incentives for Nonprofits and Businesses in Delaware

There are no specific solar incentives in the state of Delaware for nonprofit organizations. However, there are tax relief programs for nonprofits and loan funding programs that will apply to nonprofits and businesses. Some experts will tell you that local governments and nonprofits have access to even more long-term savings than residents in Delaware.

USDA REAP Grant

The United States Department of Agriculture offers a REAP grant or Rural Energy for America program. Agricultural producers are important members of the economy, and certain savings programs are in place to help them save money on significant investments like solar energy.

The USDA Reap Grant ensures loan financing and grant funding for agricultural producers. The USDA will work with you from the start of your research into solar installations and ensure they secure financing for you.

Federal Solar Tax Credit for Businesses in Delaware

For a federal corporate income tax return, there is a 30% credit against the cost of any system that was placed into the building during that year. The Federal Solar Tax Credit is the best way for state residents to save money, but the program is set to expire. In the year 2023, you will notice the rate of savings go down to 10%, and in 2024, it is going to expire completely.

There is always a chance that a program like this will renew, but it makes sense to take advantage of it before having to worry about those issues. This program is typically easily combined with others available to Delaware business owners.

Delaware Commercial Net Metering

The net metering program in Delaware is one of the best in the nation. This is where you will notice the majority of your money savings long term. If your business still needs a bit of help from the grid on certain days, you will get full retail value for any excess energy you produce.

With the impressive quality of the net metering in Delaware, it makes sense to get a large enough system to support your building and benefit from the days when you produce excess energy. Having a professional come and look at the requirements of the system you need will certainly help ensure you benefit from net metering.

Delmarva Power – Green Energy Program Incentives

Delmarva Power has a green energy program incentive that applies to commercial properties in Delaware. With the non-residential systems, you will get $.50/W. However, non-profit institutions can expect $1.40/W. This is where you see the non-profit institutions benefit from going solar.

Sustainable Energy Utility (SEU) – Revolving Loan Fund

Commercial property owners and business owners looking to fund a solar installation can look to the SEU for some help. The credit history of the business must be strong, with financial statements and references in place.

The fund allows for 10 years to pay the loan back for amounts over $25,000. In addition, the interest rates are typically quite fair and will range between 50-100% of Municipal Bond Yields. If you want to invest in energy savings but aren’t sure how to afford them, the Sustainable Energy Utility Revolving Loan Fund is a great choice.

Green Grant- Solar Hot Water and Geothermal program

Green Grand Solar Hot Water and Geothermal program is another option available to commercial properties and business owners in Delaware. This allows for discounts on solar water heating of up to $1.0 per kWh saved. Again, we also see an increase in savings for the Non Profit in this situation, with $1.5 per kWh saved.

Key Takeaways: The Best Delaware Solar Incentives

As you can see from our guide, the solar incentives in Delaware may not be as straightforward and upfront as they are in other states. However, they have improved over the years, and more options continue to be offered. The best solar incentive in Delaware still is the federal program, but the net metering policies are also quite helpful. If you are new to the solar panel concept, check with your local government first to see if any new programs are in the works.

Delaware Solar FAQ

Is solar worth it in Delaware?

Solar in Delaware is worth it to help you save money and to ensure you are producing clean energy for a more sustainable environment long term. There is something quite powerful about being able to move off the grid, and many homeowners and business owners in Delaware are enjoying this concept.

How much does it cost for solar panels in Delaware?

Solar panels in Delaware will typically cost around $20,000 to $24,000. This depends on how much energy your home needs to create and what the current electric bill is like. A local expert can fill you in on how much the solar panels will cost and what they will save you.

Can you get solar panels for free in Delaware?

Solar panels are not offered for free in Delaware. There are rebates from the federal government and net metering programs to help you save money, but you will still need to pay for your solar panels.

What solar rebates are available in Delaware?

Currently, the solar rebates in Delaware include federal rebates only as there is no state rebate program. However, this could change in the near future. Delaware does not have a very strong rating when it comes to solar power friendliness, and many people are trying to change that.

How many homes in Delaware have solar panels?

There are only about 20,000 homes with solar panels in Delaware. As we mentioned, this state ranks 41st in the nation, so many people are still skipping solar and sticking with their traditional methods of purchasing electricity for their homes.

Do solar panels increase property taxes in Delaware?

Solar panels will increase property taxes in Delaware, and there are currently no incentives to decrease these taxes.

How much can you write off for solar panels on taxes in Delaware?

The current Federal ITC programs allow a 26% rebate on the total cost of the solar system. This program can save up to $5,000 for some homeowners depending on the system’s total cost.

House Method’s Solar Companies Rating Methodology

At House Method, transparency and trust are our most important values for the reader. That’s why we took the time to create an objective rating system and score each solar energy company/service according to our methodology.

Our research team dug deep into the fine print of contracts, combed through more than one hundred customer reviews, and thoroughly investigated all of each solar energy company’s services, costs, and products. We’ve done the homework for you by researching nearly all of the solar energy companies on the market so you can have the information you need to make the best choice for your home.

We developed a formula to objectively determine the best solar energy companies and give each a score out of 100 based on the following criteria:

Plan Options (30): Do they provide a variety of plan options? We looked at the number of plans each solar energy company offered and the flexibility of adjusting the plan.

Services offered (20): How many services are offered in each plan? We looked at whether the company manufactures its own solar panels, whether it contracts out installation, and what additional products each company offers.

Trust (10): What do customers say after their solar panels are installed? Does this company offer a guarantee? We considered how satisfied customers are post-service if the company does what it says it will, BBB accreditation, and service guarantees.

Prices (10): How reasonable are the costs of the plan or service in comparison to the industry average? We compared the costs of each company to competitors that offer the same solar energy services.

Unique perks (10): Does the company offer discounts or special services such as financial incentives, rebates, or a useful mobile app? We looked for extras each company offers that set them apart from the competition.

Customer Service (10): How is the customer experience when contacting the company? We considered the speed of response, weekend/holiday availability, and ease of communication through phone calls, email, and online chat functions.

Nationwide availability (10): How many states does the company offer its services? Companies that operate nationally and in all zip codes are favored over those with limited availability.

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