If you live in Delaware, you’re likely paying a lot of money for your electricity. Delaware is one of the highest-ranking states in terms of energy costs. For this reason, many people are looking for alternative sources to power their homes.
One of the most attractive investments is solar energy. With that said, solar energy installations are not cheap. They are long-term investments that take time to pay off. You are probably wondering whether or not solar is worth it in Delaware.
The good news is that solar installation costs have decreased by 20% over the last five years. However, energy costs increase by as much as 3% annually, which would appear to be good news for those considering installing solar panels.
However, the real question is how long it will take to break even on your investment. This is the so-called payback period for your solar panels. We need to determine a few other things, such as how much electricity you use and how much it costs to determine how long it will take for your solar panels to pay for themselves. We also need to figure out how much sunlight you get in Delaware and the average cost of solar panels.
Once we have this information, we can put them all together. But, first, let’s see how long it will take for you to break even on your solar panel investment.
Residential Energy Usage and Costs in Delaware
First, we need to determine how much electricity you use and how much it costs monthly and yearly.
Delawareans use an average of 942-kilowatt hours per month, which currently ranks 26th in the nation. It’s about 4.3% greater than the national average of 903-kilowatt hours per month.
Although Delawareans don’t use high amounts of electricity, the rates are relatively high at 13.58 cents per kWh. This ranks 13th in the US, with the average cost per kWh 11.88 cents.
The overall result is that electricity bills are relatively high. For example, a resident of Delaware pays on average $128 per month for their electricity. This is almost 20% greater than the national average monthly electricity bill of $107, or $1,536 annually. Therefore, solar is an investment worth making in Delaware based on electricity expenditures.
Average Cost of Solar Panels in Delaware
The average cost of a solar panel installation is $2.65 per watt In Delaware. This is significantly lower than the national average, $3 per watt.
However, solar panel installations have a bulk pricing scale, so a 9kW system will cost more than a 6kW system. But, on a per watt basis, the 6kW system is the cheaper of the two. Therefore, the larger the system, the cheaper the individual wattage is. So, keeping this in mind, what do solar panel installation costs look like in Delaware?
- 4kW – $2.89 per watt – $11,560
- 5kW – $2.77 per watt – $13,850
- 6kW – $2.65 per watt – $15,900
- 7kW – $2.62 per watt – $18,340
- 8kW – $2.66 per watt – $21,280
- 9kW – $2.57 per watt – $23,130
- 10kW – $2.54 per watt – $25,400
The Investment Tax Credit
Although those costs might seem high, there are incentives. One such incentive comes from the federal government, the Investment Tax Credit, or the Federal Solar Rebate Program.
This program provides a 26% rebate on your solar panel investments. This 26% rebate will last until the end of 2022. Then, until the end of 2023, the rebate will be 22%.
After 2023, there are yet no plans to extend this rebate program. Therefore, installing your solar panels in 2022 is recommended to get the best savings.
So, currently, you have to pay only 74% of the upfront cost. Then, what do solar panel installation costs in Delaware look like after this rebate has been applied?
- 4kW – $8,554.40
- 5kW – $10,249
- 6kW – $11,766
- 7kW – $13,571.60
- 8kW – $15,747.20
- 9kW – $17,116.20
- 10kW – $18,796
Delaware State Solar Incentives (Utility Companies)
Delaware also features net metering, so you’ll get a certain amount of money back for every kilowatt of excess energy produced. Delaware has one of the best net metering programs in the nation.
However, this only applies if you generate excess energy. That said, there are two utility providers in the state that offer great solar rebates; however, you have to be a customer of one of those two companies.
Delmarva Power and Light
If you are a customer of this utility company, they will pay you $0.70 per watt of solar panels that you install. This is up to a maximum of $6,000.
- 4kW – $5,754.40
- 5kW – $6,749
- 6kW – $7,566
- 7kW – $9,371.60
- 8kW – $10,147.20
- 9kW – $11,116.20
- 10kW – $12,796
Delaware Electric Cooperative
This utility company pays $0.50 per watt of solar panels installed, up to 5kW. For every watt installed after 5kW, you will get an additional $0.20 per watt.
- 4kW – $6,554.40
- 5kW – $7,749
- 6kW – $9,066
- 7kW – $10,671.60
- 8kW – $12,647.20
- 9kW – $13,816.20
- 10kW – $15,296
Peak Sunlight in Delaware: How Much Energy do Solar Panels Produce?
The most popular installation size is 5 kW. Therefore, this is what we will be working with. Based on 4 hours of peak sunlight per day, a 5kW system can produce 20-kilowatt hours per day. This equates to 600-kilowatt hours per month.
Delaware gets 4 hours of peak sunlight per day. Therefore, in Delaware, a 5kW system produces 20kilowatt hours per day or 600 kilowatt-hours per month.
Delaware Solar Panel Costs vs. Savings
We now have all the figures we need to determine the solar panel payback period. Remember that the below calculation does not include the rebates provided by separate utility companies (We will do separate calculations for those below). There are four figures we need to know:
- Delawareans use an average of 942-kilowatt hours per month.
- Annual electric bills in Delaware are roughly $1,536 per month.
- Therefore, you can expect to pay $10,249 for a 5kW installation.
- That 5kW installation can produce 600-kilowatt hours per month.
So, 600-kilowatt hours is 63.7% of the 942-kilowatt hours used monthly. Therefore, you can save 63.7% of that $1,536 yearly energy bill. This equates to $978.43 saved annually. Based on the cost of $10,249, the payback period is 10.47 years.
For Customers of Delmarva
The cost of a 5kW solar installation, if you are a customer of Delmarva, is $6,749. Based on this, the payback period would be 6.9 years.
For Customers of Delaware Electric Cooperative
If you are a customer of the Delaware Electric Cooperative, a 5kW system costs $7,749 to install. Based on this, the payback period is 7.92 years.
Conclusion
As you can see, solar power is an excellent investment in Delaware. Moreover, with a payback period of just over 10 years, it won’t take too long to get your money back.
Of course, if you are a member of the two utility companies we covered, things look even better.
Solar power is always an excellent long-term investment. It will save you money over the long run, and it’s good for the environment.