Delaware’s community solar legislation has been on the books since 2010 but has remained stagnant with less than 10 megawatts (MW) installed. However, in 2021, the state set a new Renewable Portfolio Standard of 40% by 2035, with a 10% carveout for photovoltaic solar. Later that year, SB 2 was signed into law doubling the maximum project size and mandating a modest low-income (LI) customer carveout, amongst other changes to make the program more attractive to investment.
A notable difference for Delaware’s community solar program is the conspicuous lack of program length. Where most states have a program length of two decades or so, Delaware projects will earn credits for as long as it remains in compliance with regulations, is subscribed to, and the statute permitting community solar facilities remains in effect.
The updated program officially opened in April of 2022 and saw 60 projects submissions accounting for about 250 MW. The program functions on a “first come, first serve” basis and has no capacity cap, which in part has led to a significant interconnection queue. While a queue remains, community solar farms, or community energy facilities (CEF) as they are called in Delaware may still apply to the program on a rolling basis.
The process of approving CEFs for interconnection has also slowed in no small part due to necessary cluster studies. The Independent System Operator (ISO) PJM, has the largest backlog of interconnection requests of any ISO in the country, further complicating the timeline for CEFs to enter operation.
Despite the interconnection issues, Delaware’s dense population and relatively simple program structure makes the state an attractive market for community solar. (Learn more about Delaware's full-scope renewable energy initiatives here).
LI Requirements and Verification Rules
Each project must assign at least 15% of its subscriptions to LI customers, this is based on the total number of customers, not the project’s capacity. LI eligibility is defined as a household with a gross annual income below 200% of federal poverty guidelines or 60% of the state median household income, whichever is greater.
LI status can be determined by:
Every 3 years, the CEFs must certify to the Public Service Commission in writing that they meet the LI eligibility criteria provided.
Community solar projects in Delaware are accepted on a “first come, first serve” basis. When Delmarva started accepting applications In November 2021, over 60 applications were submitted totaling about 250 MWs. Projects may still apply to participate in the program as there is no capacity cap, but there is a queue of projects meeting program requirements awaiting connection.
Delaware’s Public Service Commission requires that a CEF owner apply and obtain a Certificate to Operate from the Commission, with an application fee of $750. To obtain a Certificate to Operate, a CEF must provide:
The PSC has a dedicated Community Energy Facility page for instructions on how to register before obtaining a Certificate to Operate. For an estimated timeframe and overview of the interconnection process, refer to slide 3 from this presentation.
Credit Mechanism and Incentives
Community solar credits are valued at the sum of the volumetric distribution service charges and supply service charges for both residential and nonresidential customers according to each participating customer account’s rate schedule.
Aside from the substantial tax credits made available in the Inflation Reduction Act, Delaware has few incentives for solar. Delaware does have an open Solar Renewable Energy Credit (SREC) market through which Delmarva Power and Light (DPL) achieves progress towards the state’s RPS. The Annual SREC Procurement Program, operated by Delaware’s Sustainable Energy Utility (DESEU) provides 20-year contracts to SREC sellers on a competitive basis. Procurements occur in three tiers, though one (Alpha tier) is for customer-owned systems only.
|SREC Price for 2022
|350 kW to 2MW
|2MW to 5MW
High of $44.94 and a low of $20.00
Additional bonus multipliers exist for SRECs generated by CEFs:
Other credit considerations:
Delaware is home to about 1 million people across three counties making it one of the least populated states in the country, but also one of the most densely populated. There is only one major investor-owned utility in the state, DPL. The other utility, Delaware Electric Cooperative, services about 100,000 customers in the mostly rural parts of the state and does not participate in the state’s community solar program.
Delmarva Power and Light (DPL)–324,000 customers
Delaware has a relatively small LI population, naturally, as one of the smallest states by population size and geography. This is partially reflected in the relatively low (compared to other states’ community solar programs) LI requirement in SB 2. Considering the expanded Investment Tax Credit’s (ITC) 50% low- to moderate-income (LMI) requirement, competition for both low-income and moderate-income customers is likely to be fierce.
Delmarva Utility Territory Map
Delmarva Tariffs and Riders