Delaware solar rebates and incentives: 2024 guide

Delaware is neither the biggest nor the sunniest state, but it has some huge incentives for rooftop solar power. The First State has a straightforward but valuable set of solar policies that essentially guarantees that you get compensated for all the power you produce, even if it’s more than your home needs in a given year. Simplicity can be a beautiful thing.

The most impactful solar incentives in Delaware are the federal residential clean energy tax credit (available everywhere in the US), a robust net metering program that offers full bill credits for your extra solar production (aka net metering), solar renewable energy certificates (SREC) that homeowners can trade for cash, plus some rebate and grant programs.

If you're considering going solar in Delaware, we have good news: Some great incentives can substantially improve your return on investing in solar panels. Below, are some of the most impactful incentives for Delaware homeowners.

Residential Clean Energy Credit

The Residential Clean Energy Credit, formerly known as the federal investment tax credit (ITC), can reduce your solar panel system's cost by 30%. Your entire system, including all the equipment, labor, permitting, and sales tax, qualifies for the ITC.

When you file your taxes, you can claim this incentive as a credit towards your federal tax bill. Just keep in mind that to qualify for the ITC, you need to purchase your system either with cash or a solar loan–if you lease your system, you won't be eligible. 

You also need a high enough tax bill, though you can roll over any remaining credit year-to-year until the end of 2034 when the ITC expires. The only time you might be eligible for a direct payment for the ITC is if you're a tax-exempt entity, like a nonprofit organization.

Green Energy Program Rebates

Under the Delaware Green Energy Program, most (but not all) of the electric utility companies in the state offer direct grants (basically rebates) to homeowners who install solar panels. The details depend on your utility company, but they’re all tied to the size of your solar array.

• Delmarva customers can apply for a rebate of $0.70 cents per watt of installed solar capacity, up to a maximum rebate of $6,000 (roughly an 8.5 kW solar array). As part of the deal, you’ll need to sign over your SRECs (more on those below). 

• For customers of the Newark municipal electrical company, the rebate is $1 per watt up to 5 kW, then $0.50 per watt thereafter. Recipients get to keep their SRECs.

• Delaware Electric Coop customers may receive $0.35 cents per watt for the first 5 kW, then $0.20 per watt thereafter. 

You aren’t strictly guaranteed to receive these rebates; there’s a limit on the annual funding for the program, though we can’t find evidence that the program has ever run short by the end of a calendar year. Some utilities also warn that it could take up to two years to receive your rebate.

Customers of the municipal utilities in Dover, New Castle, Clayton, Lewes, Middletown, Milford, Smyrna, and Seaford are not eligible for rebates.

Solar Renewable Energy Certificates (SRECs) 

In simple terms, SRECs are a way to get paid extra cash for generating solar energy. For every megawatt-hour (MWh) of electricity that your solar panels generate, you’ll be awarded one SREC. At the end of a year, you can sell your SRECs for cash. (You can learn more about all the technical details, financial fine-print, and market-making goals of SRECs here.)

In the handful of years leading up to 2024, residential SRECs in Delaware have typically sold for about $30 each. So a 5 kW rooftop system that generates about 6 MWh annually can earn you about $180 per year. Not bad.

Low and Moderate Income Solar Grants

Free solar panels are largely a myth—but a program for low- and moderate-income homeowners in Delaware is one of the few exceptions.

This pilot program provides low-income homeowners with a free 4 kW system. Moderate-income households can qualify for 70% off a system as large as 6 kW system. Learn more and apply through the Delaware Department of Natural Resources and Environmental Control.

If you connect your solar panel system to the grid, you can benefit from net metering—which is really the ultimate incentive for rooftop solar, even more than big rebates and tax credits. 

Under net metering, the sun doesn’t need to shine all the time to get massive value from your solar panels. Your electric utility company essentially works like a bank account for all the energy your solar panels produce.

When the sun shines, your home’s electrical system first takes as much power as it needs from the solar panels. If the panels make any excess energy, it gets sent back onto the grid, and your utility company gives you full credit for all of it on your energy bill. 

When the sun isn’t shining and you need grid electricity to power your home, the utility company just starts drawing against your credits. You won’t pay for electricity until those credits run out.

In Delaware, the net metering rules work the same way across all electric utilities, including Delmarva, Delaware Electric Coop, and the municipal electric companies.

A few nuances to keep in mind:

• Solar metering in Delaware is credited in kWh, rather than dollars. Any monthly fixed costs (like meter connection fees) may need to be paid in cash—kWh credits won’t apply.

• Solar credits reset at the end of a set 12-month period. If you don’t use them up, they vanish with no rollover or cash payout. However, you do get to pick your “true up” month, when the counter starts and eventually resets. (Conventional wisdom is that you should pick March or April.) You can change your mind about the true-up date once.

To qualify for net metering, your total system capacity can only be predicted to generate 110% of your previous 12 months electricity use. So if you just bought a heat pump and a couple electric vehicles, you’re going to want to wait to see your annual usage before you think about installing solar—otherwise, you may not be allowed to install a net-metered system large enough to cover all your demands for electricity.

No, Delaware doesn't offer any state-specific battery incentives. Solar batteries don’t make much financial sense for Delaware homeowners anyway, because the net metering policy is so consumer friendly that you don’t really benefit from hoarding your solar power. None of the utility companies in Delaware currently offer a virtual power plant program for homeowners, either.

However, if you’re interested in a battery as a backup power source for your home, all batteries above 3 kWh in size are eligible for the 30% federal tax credit.