Delaware Solar Incentives: Full List Of Tax Credits & Rebates

Switching to solar energy is one of the smartest investments a homeowner or business can make. It lowers electricity bills, increases property value, and reduces reliance on fossil fuels. If you live in Delaware, we have even better news: you have financial incentives available to make it possible. With state rebates, tax credits, and federal programs, the cost of installing solar panels is lower than ever.  

If you’re considering solar, knowing what incentives are available can help you maximize your savings. Here’s a full overview of the tax credits, rebates, and programs that make going solar in Delaware more affordable.  

Federal Solar Investment Tax Credit (ITC)  

Before looking at Delaware’s state incentives, let’s review how the Federal Solar Investment Tax Credit (ITC) helps homeowners and businesses lower the cost of installing solar. Instead of a simple deduction, the ITC directly lowers the amount of federal taxes owed, making it a valuable incentive for those looking to transition to renewable energy.  

How Much Does It Cover?

The ITC covers 30% of the total installation cost for residential and commercial solar systems. This includes expenses related to solar panels, inverters, battery storage, wiring, and labor. For example, if your solar system costs $20,000, you can claim a $6,000 credit on your federal tax return. There is no cap on the credit, meaning larger systems with higher installation costs can claim higher amounts. 

In addition to the base credit, there’s an additional 10% bonus credit available if your solar system is comprised of at least 40% American components. You should reach out to our team to learn more about this limited-time bonus credit and see if you could qualify.   

How Long is It Available?

This incentive has a set timeline. The 30% credit is available through 2032, but it will drop to 26% in 2033 and further decrease to 22% in 2034. After that, unless extended by Congress, the credit is expected to be eliminated for residential solar projects. Businesses may still qualify for a 10% credit beyond 2034, but homeowners would no longer receive this federal benefit.  

Who Qualifies?

To qualify for the ITC, you must own the solar system: leased systems do not qualify. The installation must also be on a primary or secondary residence within the United States: rental properties do not qualify unless you are a business entity installing solar for commercial purposes. The credit applies to both newly installed systems and expansions of existing solar setups. If you add more panels or battery storage to an existing solar array, you may still be able to claim the tax credit for those upgrades.  

One important detail to note is that this is a non-refundable tax credit. If the amount of your credit exceeds what you owe in federal taxes for the year, the remaining balance can be rolled over to future tax years until the full credit is used. For example, if you qualify for a $6,000 credit but only owe $4,000 in taxes this year, the remaining $2,000 can be applied to next year’s tax bill.  

Because this credit significantly lowers the total cost of going solar, it’s one of the biggest reasons homeowners and businesses are making the switch. However, with the percentage set to decrease in the coming years, acting sooner ensures you receive the maximum financial benefit.

Delaware State Solar Rebates and Incentives  

Beyond the federal tax credit, Delaware provides several programs to make solar energy more affordable. These incentives come from state-run initiatives, utility company rebates, and policies that allow homeowners to earn credits for excess energy production. Together, these programs help lower the upfront cost of solar installation while also providing ongoing financial benefits.

Delaware Green Energy Program

One of the biggest incentives is the Delaware Green Energy Program. This state-funded initiative, supported by utility providers, offers direct rebates to help homeowners offset installation costs.

The rebate amount varies based on the utility company supplying power to your home:

• Delmarva Power Customers can receive $500 per kilowatt (kW), up to a maximum of $3,000 (capped at 6 kW).

• Delaware Electric Cooperative Customers are eligible for $0.50 per watt, with a maximum rebate of $2,500.

• Municipal Utility Customers may also qualify for rebates, but amounts differ by provider. Homeowners should check with their local municipal utility to see what’s available.

Because funding for this program is limited, applying early increases the chances of securing a rebate before available funds run out. To qualify, homeowners must work with a certified solar contractor, and the system must meet specific program requirements. These include installation by a licensed professional and compliance with efficiency and safety standards.

Delaware Net Metering Program

Net metering is a policy that allows homeowners to send excess solar energy back to the grid in exchange for energy credits, reducing their electricity bills. Delaware has one of the strongest net metering programs in the country, making solar an even more attractive investment.

Here’s how it works:

• When your solar panels produce more electricity than your home uses, the excess energy is automatically sent back to the grid.

• Your utility company credits your account for the extra energy at the full retail rate, meaning you earn the same amount per kilowatt-hour (kWh) as you would pay for electricity from the grid.

• These credits offset future electricity use, helping to lower your monthly bill.

• At the end of the year, if you have unused energy credits, your utility provider may issue a payout or apply the balance to your future bills.

Unlike some states where utilities pay homeowners a lower rate for excess energy, Delaware’s net metering policy ensures that solar customers receive full retail value for every kilowatt-hour they send to the grid. This means a well-designed solar system can significantly reduce or even eliminate electricity costs.

Delaware law requires utilities to offer net metering to all residential solar customers, but each provider may have slightly different policies. Homeowners should check with their utility company to understand how their specific program works.

Solar Renewable Energy Credits (SRECs)

Delaware’s Solar Renewable Energy Credit (SREC) program offers homeowners another way to make money from their solar system.

An SREC represents one megawatt-hour (MWh) of solar electricity that your system produces. Since utilities in Delaware are legally required to purchase a certain number of SRECs each year to meet renewable energy mandates, homeowners with solar panels can sell their credits to these utilities for extra income.

The value of SRECs fluctuates based on supply and demand. On average, homeowners can earn $50 to $100 per credit, though prices vary. Those who generate more solar energy will earn more credits, increasing their overall financial return.

SRECs can be sold through:

• State-Run Auctions: Delaware periodically holds auctions where solar system owners can sell their credits to utilities.

• Private Brokers and SREC Aggregators: Homeowners can work with brokers who help manage and sell SRECs. They often secure better pricing.

Selling SRECs provides an ongoing source of revenue, helping to further offset the cost of installing and maintaining a solar system. Because market rates change, it’s a good idea to monitor SREC prices and explore different selling options to maximize returns. 

Local Utility Solar Incentives  

In addition to state-wide programs, several utility companies in Delaware offer their own solar incentives. These rebates and financial assistance programs help homeowners lower the cost of installation and improve their return on investment. Since utility-based incentives are often funded on a first-come, first-served basis, applying early can increase your chances of securing these savings before funds run out.

Delmarva Power Solar Rebates

Delmarva Power participates in Delaware’s Green Energy Program, offering homeowners up to $3,000 in rebates for installing solar panels. The rebate amount is calculated at $500 per kilowatt (kW), up to 6 kW.

To qualify, homeowners must:

• Install their solar system through a state-approved contractor.

• Ensure the system meets all efficiency and safety requirements.

• Submit a rebate application before program funds are depleted.

Since Delmarva Power serves a large portion of Delaware, demand for this rebate is high. Homeowners considering solar should check availability and apply as soon as possible.

Delaware Electric Cooperative (DEC) Solar Incentives

Delaware Electric Cooperative (DEC) also offers financial incentives for customers who install solar energy systems. DEC provides a rebate of $0.50 per watt, with a maximum rebate of $2,500 per home.

In addition to rebates, DEC participates in net metering, allowing customers to earn credits for excess solar energy fed back into the grid. Homeowners who generate more electricity than they use can apply these credits toward future energy bills, helping to reduce overall costs.

Because DEC is a cooperative, it operates differently from traditional utility companies. Members of the co-op have a say in its energy policies and benefit from lower energy costs. The organization actively supports renewable energy adoption and encourages customers to take advantage of solar programs to increase energy independence.

City of Newark Green Energy Grant

Newark residents may qualify for additional solar incentives through the City of Newark’s Green Energy Program. This initiative provides financial assistance for solar installations, though rebate amounts depend on available funding.

To be eligible, homeowners must:

• Install an approved solar energy system.

• Submit an application for funding.

• Work with a qualified installer to ensure compliance with program guidelines.

Because city-based programs often have limited budgets, grant availability may change from year to year. Residents should check with Newark’s municipal energy department to confirm funding levels and application deadlines.

Utility-based rebates add another layer of savings to an already strong set of solar incentives in Delaware. By combining state rebates, federal tax credits, net metering, and local utility programs, homeowners can reduce the cost of installing a solar energy system. These incentives not only make solar more affordable but also shorten the time it takes to see a full return on investment.

Property Tax Exemption for Solar Systems  

Installing solar panels adds value to your home, but in Delaware, homeowners don’t have to worry about paying higher property taxes because of it. The state exempts solar energy systems from property tax assessments, meaning that even though your home’s market value may increase, your annual property tax bill will not.

This exemption is especially important for homeowners who plan to sell their homes in the future. Studies show that homes with solar panels tend to sell faster and at higher prices, and Delaware’s tax policy ensures that homeowners can enjoy the financial benefits of increased property value without added taxes.

Sales Tax Exemption on Solar Equipment  

Unlike some states that impose sales tax on solar purchases, Delaware does not charge any sales tax on solar energy systems. This exemption applies to solar panels, inverters, battery storage, racking, and even installation costs, making solar more affordable from day one.

By eliminating sales tax, Delaware reduces the upfront cost of going solar. For example, in states with a 6% sales tax, a $20,000 solar system would come with an additional $1,200 in tax costs. In Delaware, that extra expense is completely waived, allowing homeowners to invest more in high-efficiency panels or battery storage without worrying about added taxes.

Low-Interest Solar Loans and Financing Options  

For homeowners who can’t afford the full cost of solar upfront, Delaware offers financing programs to make the switch more manageable. Energize Delaware’s Solar Loan Program provides flexible, low-cost loans specifically for solar installations.

This program offers:

• Fixed low-interest rates, ensuring predictable monthly payments.

• No upfront costs, allowing homeowners to install solar with zero initial investment.

• Flexible repayment terms, making it easier to fit solar into any budget.

By spreading out payments over time, homeowners can start saving on energy bills immediately, often with monthly loan payments lower than what they were previously paying for electricity. This allows more people to take advantage of solar energy without waiting years to save up for the full cost of installation.

Get Started with Solar Today  

At Solair Green Energy Advisors, we help homeowners and businesses maximize savings by identifying the best rebates, tax credits, and financing options. If you’re ready to switch to solar, contact us today for a free quote. Our experts will guide you through the entire process - from incentive applications to installation - so you can start saving money and powering your home with clean energy.