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Whether it’s a poultry house in southern Delaware or a home outside of Wilmington, solar panels are being installed all over the First State. 

With great tax incentives and the opportunity to reduce a significant expense, now is an excellent time for Delaware’s businesses, farmers, and homeowners to invest in solar panels. 

This comprehensive guide covers everything you need to know about installing solar panels in Delaware, including:

  • Why solar is worthwhile in Delaware
  • How to get started with a solar installation 
  • Typical installation costs and financing options
  • Tips for choosing the best solar company
  • Answers to frequently asked questions

Is Solar Worth It In Delaware?

If a state has over 200 sunny days per year, 4.2 peak sun hours a day (just .3 less than Florida), and medium to high electric rates, does that make it a prime location for solar panels? 

That state is Delaware, and despite being the second smallest state, solar continues to be installed at a rapid pace thanks to its decent solar weather and strong solar policies. 

Delaware’s Renewable Portfolio Standard requires 25% renewable energy by 2026, with a minimum of 3.5% from solar power. Along with strong net metering laws, a 30% federal tax credit, and other incentives, solar offers exceptional returns for Delaware homeowners and businesses.

How to Go Solar in Delaware?

The process for installing solar panels in Delaware is relatively straightforward. 

  1. Request a Free Solar Site Assessment From 2-3 Reputable Local Installers  
    A reputable solar installer will likely schedule a visit to your property for a detailed site assessment. This visit allows you to discuss your solar objectives and ask any questions you may have. This solar expert will collaborate with you to pinpoint the ideal location for the solar equipment and gather essential details to create your custom quote.

    Pro tip: If the solar company refuses to come to your property for a consultation, it may be a red flag indicating that you should consider exploring other options.

  2. Review Your Quote, Examine Your Financing Options, and Research Your Installation Company
    A quote should arm you with the necessary knowledge to confidently navigate your investment in solar energy. 

    Should you choose to proceed, dedicate time to thoroughly investigate and engage with your top solar companies. Examine their online reviews, ask to speak with their customers, and don’t be afraid to ask hard questions. 

    Solar is a long-term investment, so it’s crucial to partner with an installation company with a proven success history and is structured to be around for the long haul.

  3. The Installation Begins
    After choosing an installer, they should handle all the permitting, paperwork, system design, installation, and final approvals needed to operate the system.

    The complete project timeline for a residential system (from the signed contract to the installed system) typically takes several months to develop. Once the installation crews can begin construction, the average residential installation typically takes a few days to a week. 

    Commercial installations require a longer timeframe. They often take several months to a year to design, obtain permits, procure products, and finally, install the system. 

  4. After Inspections and Approvals, It's Time to Energize Your System!
    Finally, the time has come for your system to be energized.  Let the savings begin!

The Cost of Solar Panels In Delaware

The solar panel installation cost in Delaware will vary, but as a rough estimate:

  • Residential systems (5-20kW): $28,000 - $58,000+ before incentives
  • Commercial systems (50-200kW): $135,000 - $410,000+ before incentives

However, generous incentives, such as the 30% federal tax credit, dramatically reduce the net cost.

For example, the average roof-mounted 10kW residential solar panel system will cost $33,610 before incentives. After the federal tax credit, the net cost would be $23,527.

System Size
Cost Before Incentives
Tax Credit
Cost After Tax Incentives
Year One Electric Savings
Year One SREC Income
10 kW
$35,370
$10,611
$24,759
$1,375
$569
15 kW
$46,285
$13,886
$32,399
$2,063
$478
20 kW
$57,200
$17,160
$40,040
$2,750
$638

 

A standard 100 kW commercial or agricultural roof-mounted solar panel system in Delaware would cost $225,700 before utilizing any available incentives. The net cost would be $99,094 after the 30% federal tax credit and depreciation.

System Size
Cost Before Incentives
Tax Credit & Depreciation
Cost After Tax Incentives
Year One Electric Savings
Year One SREC Income
50 kW
$137,000
$76,850
$60,150
$5,000
$1,594
100 kW
$229,300
$128,626
$100,674
$10,000
$3,188
200 kW
$416,900
$135,949
$183,040
$20,000
$6,375

 

Pro Tool: Try our solar calculator for a quick estimate of your installation cost and savings. 

How To Pay For Solar Panels In Delaware

In Delaware, you have various payment options for your solar panel system.

Opting to purchase the system outright with cash or a loan is a smart choice as it offers the best return on investment. By doing so, you can take advantage of incentives like tax credits, SRECS, and electric savings while also owning a valuable asset that reduces costs.

For those looking to sidestep the initial expense of solar installation, third-party financing options such as solar leases provide an alternative. With a solar lease, you can make minimal or no upfront payments in exchange for monthly installments. 

Remember that the third party will maintain ownership of the system and reap the benefits of all available incentives when using a lease. There are often price escalators and other stipulations that you must be aware of beforehand. These agreements can also make it challenging to sell the property. 

What Solar Panel Incentives Are Available In Delaware?

Delaware offers several incentives available for your solar panel investment.

The Tax Benefits

The main benefit is the federal tax credit. Homeowners will get a credit of 30% of the system installation cost. For example, if your system costs $25,000, your tax credit will be $7,500. 

The solar tax credit is a little more complex for commercial and agricultural systems. It starts at 30% for systems under 1 MW AC and has the opportunity to grow to 70%. 

In addition to the tax credit, businesses can capitalize on accelerated depreciation, taking 60% of the federal depreciation in year one. The remaining 40% and state depreciation will follow the five-year MACRS schedule. However, the 60% accelerated portion is only available in 2024. In 2025, it will drop to 40% and continue to drop by 20% until it reaches zero. At that point, 100% of the depreciation will follow the five-year MACRS schedule. 

Additional Insight: Visit our commercial tax benefits blog to learn more. 

USDA REAP Grant for Delaware Farmers and Other Qualifying Businesses

Qualifying Delaware farmers and other businesses can obtain a USDA REAP grant covering 50% of the installation cost up to $1 million. However, the 50% grant is only available through September 2024 and has limited funds. 

We expect the grant to drop to 25% after the 50% rounds end. However, this is subject to change at any time. 

Available Solar Incentives from Delaware Utility Companies

Although the State of Delaware currently does not provide grants or incentives, several Delaware utility companies are offering assistance. Customers of Delmarva Power, Delaware Electric Cooperative, and Delaware Municipal Electrical Corporation (DEMEC) may be eligible for additional funds to support the installation of their solar systems.


Delmarva Power customers could benefit from the Green Energy Grant, which provides $0.70/watt for a maximum of $6,000 for residential and $30,000 for non-residential systems. However, this grant requires you to forfeit the rights to your SRECs for the life of the system. 

Delaware Electric Cooperative contracted with Energize Delaware to provide funds for qualifying systems. This program offers $0.70 per eligible watt for residential and commercial, with a maximum of $2,000 for residential and $10,000 for commercial. Using these funds will require you to forfeit your SRECs for the life of the system since it’s essentially an SREC pre-buy program. 

How Solar Renewable Energy Credits (SRECs) Work In Delaware

Solar owners generate 1 SREC for every 1,000 kWh their solar panels produce. That SREC can then be sold to generate additional income for the system owner. 

Delaware residents can participate in the state’s SREC bidding program to lock in a bid. This will allow them to receive that amount per SREC for 10-20 years, depending on the current bidding program contract period. 

If you don’t participate in the bidding program, your other option is to sell your SRECs into Pennsylvania’s secondary SREC market.

It’s important to note that if you participate in the Delmarva Power or Delaware Electric Cooperative grant programs, you will have agreed to forego your rights to sell your SRECS.

How Net Metering Works In Delaware

Delaware Net Metering regulations require utility companies and cooperatives to pay all eligible customers with solar energy systems for their system’s production. A system eligible for net metering can not cover more than 110% of your annual electricity usage.

Overproduction is rolled over as a credit to the next billing cycle. No payments are issued for overproduction in Delaware. 

If you’re a Delmarva Power customer, your excess credits will be wiped out at the end of your billing anniversary. You’ll start again at zero in the next billing year. 

The Average Payback Period For Solar In Delaware

Solar panel systems offer Delaware residents immediate tax savings and long-term energy savings, providing a reliable and consistent payback that can be counted on. 

Solar is a front-loaded investment, which is one of the greatest benefits of solar. The federal tax credit and accelerated depreciation for businesses can be utilized in the first year soon after the system is energized. 

Here is the typical payback period and ROI that you can anticipate in Delaware (keep in mind that these figures may vary significantly based on your situation):

The average residential payback period in Delaware is 18.6 years, with an ROI of 7%.

Delaware businesses can expect to reach payback in around 11 years, with a high 18% return on investment.

Most solar panels come with a 25 to 30-year warranty and should continue to produce energy for 25 to 40 years. This equates to homeowners enjoying more than 15 years of free electricity, while businesses can reap the benefits for over two decades.


When deciding, consider the solar panel system's longevity in relation to potential tax savings, energy efficiency, and environmental advantages. While solar panels are a valuable investment for many Delaware residents and businesses, solar energy may only be suitable for some.

Delaware
Mid-Atlantic States Average
Other Investment Options
ROI
7% for Residential
18% for Commercial
8% for Residential
16.3% for Commercial
Average Annual Stock Market Return Is 10%
Average Annual Roth IRA Return is 7-10%
Payback
18.6 Years for Residential
11 Years for Commercial
15 Years for Residential
9.1 Years for Commercial

* Sources: Average Annual Stock Market Return and Average Annual Roth IRA Return

Tips For Choosing A Solar Installer In Delaware

When choosing a solar company, not all are created equal. To help receive a top-notch installation and get the most out of your savings, it's essential to:

  • Only consider companies with lengthy industry experience and the proper industry and electrical certifications
  • Read reviews on Google and SolarReviews.com. Also, ask to speak with past customers
  • Make sure the quote clearly defines the system cost, production, and warranties
  • Pick a company that offers a production guarantee and workmanship warranty. These should be in addition to the product warranties offered by the equipment manufacturers.
  • Verify they will handle all grant, permitting, and utility interconnection paperwork on your behalf.
    Confirm that they have a maintenance team available to service your system if needed. 

Visit our project gallery to view other solar installations in Delaware.

 

 

Frequently Asked Questions When Going Solar In Delaware

How much money can I realistically save by installing solar panels in Delaware?

After factoring in upfront costs, electricity savings, and incentives, most Delaware homeowners can save $5,000- $70,000+ over the 30-year lifespan of their solar installation.

Delaware businesses can expect to save $130,000 to $300,000 plus over the 30-year lifespan of the solar panels—these savings factor in the upfront cost, the long-term electricity savings, and the immediate tax savings.

How do I find a qualified solar company in Delaware?

Solar is a long-term investment. To ensure the longevity of your system post-installation, it's crucial to choose a trustworthy local installation company with experience, financial stability, and a dedicated service team.

The best way to find a reputable installation company is to research them online. Examine their website to learn about their team, company culture, and industry experience. Browse their reviews on Google and SolarReview.com. Ask to speak with their past customers.

Pro Tip: Ask your solar salesperson these 10 questions for a smooth and successful solar investment. 

Do I need to pay sales tax on a solar panel installation in Delaware?
Delaware does not require sales tax to be paid on solar panel installations.
Will installing solar panels increase my property taxes in Delaware?
Installing solar panels will increase your home/property value, which could increase your property taxes in Delaware. Delaware has no specific exemptions for property taxes relating to the value added by solar panels. 

 

Is Solar Right For You?

With Delaware's sufficient amount of average sunshine, attractive solar incentives, and increasing electricity costs, the case for investing in solar power is both financially and environmentally persuasive.

To discover how solar energy can help you save more of your hard-earned money, simply click the button below to receive your free custom quote.

If you’re not ready for a quote, visit our learning center for valuable blogs, videos, and other tools that will help you on your solar journey.