Delaware - Energy tax credit, solar rebates and incentives
Delaware Solar and Renewable Energy Incentives
Delaware is a Great Solar State
Delaware is a state with lots of sunshine and laws that are hugely favorable for solar power. Keep in mind that the Federal Government currently offers a 30% tax credit for the whole installed cost of your system. That, combined with Delaware's favorable renewable energy laws is a big benefit to Delaware home and business owners committed to going solar.
Delaware Renewable Portfolio Standards
Delaware has very strong RPS (Renewable Portfolio Standards). The state mandated that 25% of all energy must come from renewable sources by 2025-2026 (compliance years run from June to May). This regulation requires increased production of energy from renewable energy sources, such as wind, solar, biomass, and geothermal by a certain date. Utilities must meet the standards by producing renewable energy or purchasing it from their customers. They must pay high fees if the standards are not met. Rather than paying high fees, utilities in strong RPS state offer solar incentives to homeowners (as it is less costly for them).
Delaware RPS Solar Carve Out
Solar carve outs require a certain percentage of the Renewable Portfolio Standards be met with solar energy. Delaware's solar carve out is 3.5% by 2027.
Delaware State Electric Rates
Delaware's electric rates are tied for 12th place in the nation. A state's electric rates are one of the key factors in predicting whether an investment in solar panels makes sense. The reason for this is simple: solar power is in direct contention with electric rates. Low electric rates make it hard for you to achieve significant payback from your solar power investment. Higher electric rates make an investment in solar energy much more feasible. Delaware's higher electric rates make investing in solar power very attractive.
Delaware Net Metering
Delaware has a clear, uncomplicated net-metering law -- this is a real plus for Delaware purchasers of renewable energy. Net metering is a system in which solar panels or other renewable energy generators are connected to a public-utility power grid and surplus power is transferred into the grid, allowing customers to offset the cost of power drawn from the utility. When you generate electricity from your solar array for your home or business, it reduces the amount of energy you purchase from your electric utility. It also lowers your monthly electricity bills. If your system produces more energy than you need, the excess power is sold back to the grid. That amount of energy is deducted from your monthly bill or credited toward a future bill.
Delaware Interconnection Standards
Delaware has strong Interconnection standards. Interconnection standards are requirements for connecting solar and other electrical generation systems to the grid. These rules apply to both electricity customers and utilities. Strong interconnection standards make it easier for your utility to offer net-metering. This is a definite advantage when trying to bring a solar energy system online and makes it much easier for a solar power system to make financial sense.
Delaware Energy Rebates
Solar power rebates are incentives the federal or state governments offer to reduce the cost of going solar. You can get a lump sum payment or your installer will take the amount off the final installed price. Rebates require paperwork to be filed. Many times installers will handle the paperwork. Delaware utilities offer many excellent solar rebate programs.
Delaware State Energy Tax Credits
Delaware does not offer state tax credits. A state tax credit allows you to take the amount directly off your tax payment, rather than as a deduction from your taxable income. You can claim the credit for your primary residence, vacation home, and for either an existing structure or new construction. (Don't forget that you can also benefit from the 30% Federal Solar Tax Credit -- there is no cap on that credit.)
Delaware Solar Power Performance Payments (Performance-Based Incentives)
Delaware offers Solar Power Performance Payments, also know as production incentives. Solar Power Performance Payments provide cash payments based on the number of kilowatt-hours (kWh) or BTUs generated by a renewable energy system. To ensure project quality, payments based on a system's actual performance are much more effective than payments based on a system's rated capacity. Electricity produced is credited as Solar Renewable Energy Credits (SRECs).
Delaware Property Tax Exemptions for Energy
Delaware does not offer property tax exemptions for installed solar systems. Property tax exemptions allow businesses and homeowners to exclude the added value of a system from the valuation of their property for taxation purposes. A Solar PV system can increase the value of your home by a multiple of 20 times your annual electricity savings (a 5kW system increases the value of your home close to $17,000). A property tax exemption makes it more economically feasible for a taxpayer to install a solar system on a residential or commercial property.
Delaware Sales Tax Exemptions for Energy
Delaware does not have a state sales tax so there is no need for a sales tax exemption. A sales tax exemption means that homeowners and businesses would not have to pay any state sales tax on their solar panel system.