Delaware solar 101: must read before you buy solar panels

The US government wants more people to go solar: it’s a modern and green way of getting energy. This is why the Solar Investment Tax Credit (ITC) program was developed. It allows American citizens to claim 30% of the cost of their installation as an income tax deduction. The cost here is not only solar panels, but also shipping, installation expenses and more. For example, if your system overall made you spend $10,000, the government returns you $3,000. To claim the ITC, complete all the necessary forms and submit them when filing your taxes.

Net Metering is the main way in which a solar system pays for itself in the US. The idea is always the same: you sell your excess solar energy into the commercial grid, gain credits and use them to cover your next electric bill.

In Delaware all utilities should offer net metering. Maximum sizes for a net-metered systems are:

• 25 kW for residential customers;
• 100 kW for farm customers on residential rates;
• 2 MW per meter for non-residential customers of Delmarva Power and Light (DP&L);
• 500 kW per meter for non-residential customers of Delaware Electric Co-Op, Inc.(DEC) and municipal utilities.

Contact your utility for exact rates and net metering conditions.

For generating clean electricity any person can get Solar Renewable Energy Certificates (SRECs). Unlike with Net Metering, you don’t need to sell any electricity to get credits – the certificates are simply given to you. One SREC is granted for 1 MW of power produced. A 5kW system can generate over 7 MW over a year, so in theory it’s possible to get 5-7 SRECs in 12 months.

Delaware is a great place for trading SRECs. You can choose to store or sell these certificates using the PJM-EIS Generation Attributes Tracking System (GATS) platform. The price of a SREC in Delaware is fixed at $400 and its lifetime is 3 years. What is more, there are several credit multipliers that are effective in Delaware:

• 10% bonus if at least 50% of your solar equipment is manufactured in Delaware.
• Another 10% are granted if the system is installed with minimum 75% state workforce
• 300% credit for PV systems installed on or before December 31, 2014. Doesn’t apply to SRECs that are used for compliance with the PV carve-out.

Overall, selling SRECs gained from a 5 kW solar power system in Delaware can bring you from $400 to $2,000 annually. To participate, register your system at PJM EIS platform.

You can apply for various solar incentives from utilities to offset the cost of your solar system in Delaware. Green Energy Program is available for customers of Delmarva power, Delaware Electric Cooperative (DEC) and municipal electric customers.

Delmarva Power, for instance, provides an incentive of $0.70 per watt for residential and commercial systems under 50 kW. The maximum size of incentive is $6,000 for residential installations and $30,000 for commercial systems. Find application forms and guidelines for different programs here.

DEC, on the other hand, provides $0.50 per watt for the first 5 kW of capacity (0-5 kW) and $0.20 per watt over 5 kW. Maximum incentive is $2,500 for customers with an average monthly peak demand of less than 50 kW over the prior 12 months (Class A) and $3,500 for commercial systems with an average monthly peak demand of 50 kW or greater (Class B). Find guidelines and apply for 2022 grants here.

Concerning municipal electric customers, it appears that Green Energy grants are now available only to Newark residents. Homeowners are paid $1.00/W for the first 5 kW, $0.50/W after 5 kW with a maximum incentive of $3,500. The guidebook and contact information can be found here.

Generally, in the US you would need a solar permit from your local authorities to install a solar system. Requirements, however, vary in different cities and counties and in Delaware there is no statewide policy. For example, in New Castle county you need a building permit for ground-mounted PV systems, but for solar panels on the roof the permit is not required.

We recommend checking with the officials of your county or municipality if it is legal to install solar panels on your house in Delaware without a permit. Usually your installer knows all the details about permits in your area and handles most of the process. Be aware that city or county officials can impose additional fees on you for inspections and documents.