Cost of Solar, Financing, Lease Options
How much does solar energy cost?
An average residential solar system costs between $15,000-25,000 after solar rebates and solar incentives. Considering that you will probably spend over $72,000 in electrical bills over the next 25 years, this can be a small price to pay. Some companies even offer solar lease options in which you pay no out-of-pocket expenses for the installation.
The exact cost of your solar system will depend on the applicable Delaware solar state rebates and utility incentives available in your area and the type of solar installation you chose. Using a qualified installer who is familiar with the local incentives and permitting process will ensure that you get the most from your investment.
Are there any government tax incentives or rebates?
One of the great elements of solar power in the U.S. is that there are large number of tax incentives and rebate programs that exist to make it easier to afford solar power for your home. The solar installer that you select will be up to date on all of the applicable incentives based on where you live but below are some of the basics:
- Federal Tax Credit: Investment Tax Credit (ITC) allows individuals to deduct 30% of the cost of a solar system from individual federal income taxes;
- Individual State Rebates: Many states offer cash rebates that are either flat amount or are based on the size of your solar power system – check out the U.S. governments Database of State Incentives for Renewables & Efficiency for more information on the rebates in your particular area;
- Property Tax Exemptions: Many states also specifically exclude the value a solar energy system from your your annual property taxes… for example, if a new solar power system adds $30,000 to the value of your home, that $30,000 will be exempted from the total assessed value and your property taxes will not increase as a result of the new system.
- Municipal and Utility Rebates: In addition to the federal and state incentives, many local municipalities and utilities will offer rebates on top of everything else…please check out Database of State Incentives for Renewables & Efficiency for any incentives in your specific area.
What are the current Delaware solar incentives and how do they work?
The state government of Delaware has put in place numerous solar rebate and incentive programs that make solar energy affordable for your home. Take a look at some of the top programs below:
- Delmarva Power – Green Energy Program Incentives – State rebate program that gives $0.35 to $1.25 per watt. This program offers up to $15,000 for residential projects and $24,000 for non-residential systems. Please note that this rebate is limited to solar energy systems with capacity of 50 kilowatts (kW) per installation address. Systems larger than 50 kW do not qualify for an incentive.
- Delaware Public Service Commission – Solar Renewable Energy Credits – A performance-based incentive. Under Delaware law, a solar renewable energy credit (SREC), is equivalent to one megawatt-hour (MWh) of retail electricity sales in the state that is derived from a qualifying resource. So for every one MWh that a solar energy system produces, the owner of that system would be entitled to a SREC which can then be sold to utilities who need the SRECs to satisfy renewable energy product mandates. As of August 2011, sales of Delaware-sourced SRECs averaged $260 per MWh, although some trades have had prices exceeding $600 per MWh.
- Delaware Electric Cooperative – Green Energy Program Incentives – A utility rebate program providing a cash rebate between $0.35 and $1.25 per watt. Qualifying participants include both residential and non-residential member-owners, up to $10,000 for residential systems and $20,000 for non-residential systems. Residential member-owners are defined as those with an average monthly peak electric demand of 50 kilowatts (kW) or less over the previous twelve months. Non-residential member-owners are those with an average monthly peak electric demand of greater than 50 kW over the previous twelve months. Applicants may be required to have an energy audit performed by a Building Performance Institute certified contractor prior to grant approval.
- DEMEC Member Utilities – Green Energy Program Incentives – Utility rebate program that offers 33.3% of installed costs for all cities except New Castle, Clayton, Smyrna, and Seaford. Incentives are available up to $15,000 for residential systems.
- Dover Public Utilities – Green Energy Program Incentives – Utility rebate program that makes available $1.25 per watt for the first 5 kW of capacity (0-5 kW), $0.75 per watt for the next 5 kW (5-10 kW), and $0.35 per watt for the next 40 kW (10-50 kW). The maximum incentive is $7,500 for residential projects and $15,000 for non-residential projects.
Is Delaware a “net metering” state?
On top of the state subsidies, Delaware has a net metering policy which means that you only pay for the net amount of electricity that you use. With net metering, homeowners with solar installed are able to “bank” the excess electricity their solar system generates and receive credit up to 100% of their electric use bill at the full retail electricity price that they can use later. In Delaware, only residential renewable energy generation systems up to 25kW are eligible for net metering and commercial systems up to 500kW. However, under Delaware law, if more than 1% of a state utility’s customers ask for a net-metering agreement, that utility is not legally obliged to provide net metering. Lastly, under Delaware’s net metering laws the billing cycle is annual meaning that at the end of a billing year, customers are permitted to sell any excess power to the Green Energy Fund at their utility’s wholesale rate. So under net metering, customers can expect only to receive an annual credit as opposed to a monthly credit.
If I can not afford an up front payment for a solar power system, are there financing options to help me?
Yes, our partners offer a variety of great solar financing options to help offset some of initial installation costs. In some cases, your monthly payment will be less than the amount of savings on your electric bill. Low interest rates are available and the solar system increases the value of your home. Again, the your solar installer will have all of the details on the available solar financing options but make sure you ask about the following:
- Home Equity Loans: borrowing against the equity of your home;
- Solar Lease: leasing the solar panels for a fee over a set length of time; and
- Power Purchase Agreement: an arrangement similar to a lease arrangement where the solar provider/installer secures funding on their own for the solar project, installs the solar system in your home/office building and then sells the electricity from the solar system to the home/building owner at a fixed contractual price for a set length of time.
**Interested in a $0 electrical bill? Click here to get a free DE solar assessment from pre-certified installers in your area!**