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Delaware

Delaware

Incentives/Policies for Renewables & Efficiency

Printable Version
Renewables Portfolio Standard   

Last DSIRE Review: 04/25/2013
Program Overview:
State: Delaware
Incentive Type: Renewables Portfolio Standard
Eligible Renewable/Other Technologies: Solar Thermal Electric, Photovoltaics, Landfill Gas, Wind, Biomass, Hydroelectric, Geothermal Electric, Fuel Cells, Anaerobic Digestion, Tidal Energy, Wave Energy, Ocean Thermal, Fuel Cells using Renewable Fuels
Applicable Sectors: Municipal Utility, Investor-Owned Utility, Rural Electric Cooperative, Retail Supplier
Standard:25% by compliance year 2025-2026
Technology Minimum:PV: 3.5% by compliance year 2025-2026
Credit Trading:Yes (PJM-GATS)
Credit Transfers Accepted To:PJM-GATS into MIRECS
(Refers to tracking system compatibility only, not RPS eligibility. Please see statutes and regulations for information on facility eligibility)
Web Site: http://depsc.delaware.gov/electric/delrps.shtml
Authority 1:
Date Enacted:
26 Del. C. § 351 et seq.
07/21/2005 (subsequently amended)
Authority 2:
Date Effective:
CDR § 26-3000-3008
01/01/2013 (most recent adoption)
Authority 3:
Date Effective:
CDR § 7-100-106
08/11/2006
Summary:

In 2005, S.B. 74 established a renewables portfolio standard (RPS) requiring retail electricity suppliers to purchase 10% of the electricity sold in the state from renewable sources by 2019-2020 (the compliance year, or CY, runs from June - May). In 2007, S.B. 19 increased the RPS target to 20%, with 2.005% required to come from solar photovoltaics (PV). In July 2010 the general renewables target was revised yet again by S.S. 1 for S.B. 119 to 25% by CY 2025-2026, with at least 3.5% from PV. The 2010 amendments did not significantly alter the existing annual renewable energy benchmarks for CY 2010 -2011 through CY 2019 -2020. The annual PV benchmarks were accelerated for CY 2011-2012 through CY 2018-2019, although the existing CY 2019-2020 requirement of 2.005% PV was only slightly modified to the current level of 2.0%. In July of 2011, S.B. 124 was enacted, allowing for qualified fuel cell projects to generate 1 REC for each MWh of energy produced and permitting qualified fuel cell system RECs to be translated to solar RECs (SRECs) at a ratio of 6 MWh of qualified fuel cell generation to  per 1 SREC, capping out at a maximum of 30% of the SREC requirements. Qualified fuel cell projects in the state now have to be capable of operating off of renewable energy rather than being required to do so.

The RPS applies to the state's investor-owned utilities, retail electric suppliers, municipal utilities, and rural electric cooperatives. Under the initial RPS legislation, municipal utilities and rural electric cooperatives were allowed to opt out of the RPS requirements if they established a voluntary green power program and created a green energy fund; all of which chose to do so. The July 2010 amendments removed this exemption option, but replaced it with an option allowing municipal utilities and rural electric cooperatives to opt out of the standard by developing and implementing a comparable RPS by 2013. Sales to industrial customers with a peak load of more than 1,500 kilowatts (kW) are exempt from the standard's requirements.

Eligible renewable-energy technologies include solar electric, wind, ocean tidal, ocean thermal, fuel cells powered by renewable fuels, hydroelectric facilities with a maximum capacity of 30 megawatts (MW), sustainable biomass, anaerobic digestion, and landfill gas. Eligibility definitions for hydroelectric facilities and sustainable biomass were developed by the Delaware Department of Natural Resources and Environmental Control (DNREC) in CDR § 7-100-106, separately from the RPS rules developed by the Delaware Public Service Commission (PSC) in CDR § 26-3000-3008. The annual compliance benchmarks as revised in July 2010 are listed in the table below.* It should also be noted that the PV target is not in addition to the main target, it is included within it.

Compliance Year Eligible Renewables PV
2007-2008 2.00% --
2008-2009 3.00% 0.011%
2009-2010 4.00% 0.014%
2010-2011 5.00% 0.018%
2011-2012 7.00% 0.20%
2012-2013 8.50% 0.40%
2013-2014 10.00% 0.60%
2014-2015 11.50% 0.80%
2015-2016 13.00% 1.00%
2016-2017 14.50% 1.25%
2017-2018 16.00% 1.50%
2018-2019 17.50% 1.75%
2019-2020 19.00% 2.00%
2020-2021 20.00% 2.25%
2021-2022 21.00% 2.50%
2022-2023 22.00% 2.75%
2023-2024 23.00% 3.00%
2024-2025 24.00% 3.25%
2025-2026 25.00% 3.50%


For all suppliers, no more than 1% of each year's total retail sales may be met by eligible renewable resources placed into service on or before December 31, 1997. In CY 2026-2027 and each year afterward, all eligible renewable resources used to meet the standard must have been placed into service after December 31, 1997. Beginning in CY 2010-2011 and in each year afterward, the PSC may review the schedule and recommend that the state legislature accelerate or decelerate the schedule as necessary. Beginning in CY 2014-2015, and in each year afterward, the PSC itself may accelerate or decelerate the schedule given certain market conditions.

Energy sold or displaced by a customer-sited eligible energy resource can generate renewable energy credits for RPS compliance, provided the system is sited in Delaware. The output from generators of less than 100 kW may be aggregated for RPS compliance. The PSC will certify generation units as "eligible energy resources". Certified generators are entitled to a renewable energy credit (REC) for each megawatt-hour (MWh) of energy they generate. Delaware RECs are tracked by the PJM-EIS Generation Attributes Tracking System (GATS). A REC can generally be used for RPS compliance in any compliance year that begins less than three years after the date the REC is created. The exception to this is when RECs that are held by the Delaware Sustainable Energy Utility (SEU), which is required to act as a REC aggregator for customer-sited renewable energy facilities. The three-year REC lifetime is "tolled", or suspended, during any period in which a REC is held by the SEU. This provision was added by S.B. 173 in July 2009 and revised rules incorporating the change were adopted in December 2009 by the PSC.

Suppliers must submit report an annual report detailing their compliance status. Suppliers who fail to comply with the standard's requirements must pay into the Delaware Green Energy Fund an alternative compliance payment (ACP) of $25 per MWh of shortfall. The ACP increases in subsequent years for suppliers who elect to pay it. After the first year that suppliers pay the ACP, the ACP increases to $50 per MWh. After the second year in which it is used, the ACP increases to $80 per MWh. In July 2010 the solar ACP (SACP) levels were increased to $400 per MWh for the first use, $450 per MWh if the electricity supplier has paid a SACP of $400 in any previous year and to $500 per MWh for uses in subsequent years. These levels represent a uniform increase of $150 per MWh to the SACP levels established in 2007, which ranged from $250-$350 per MWh. The State Energy Coordinator has the authority to review and adjust the ACP and solar ACP given certain market conditions.

Several compliance multipliers are currently available under the Delaware RPS. The details of these multipliers are described below:

  • 300% credit toward RPS compliance for in-state customer-sited photovoltaic generation and fuel cells using renewable fuels that are installed on or before December 31, 2014. The 300% multiplier cannot be applied to SRECs used for compliance with the PV carve-out (see PSC notice), thus for PV carve-out compliance purposes, SRECs are counted on a 1-to-1 basis. The 300% credit formerly applied to all solar electric generation prior to the 2007 amendments.
  • 150% credit toward RPS compliance for energy generated by wind turbines sited in Delaware on or before December 31, 2012. This provision dates to the 2005 legislation that established the RPS.
  • 350% credit for PSC-regulated electric companies (i.e., Delmarva Power & Light, the state's only investor-owned utility) for energy derived from offshore wind facilities sited on or before May 31, 2017. This provision was added by S.B. 328 in 2008.
  • An additional 10% credit (i.e., 110% credit) for solar or wind installations sited in Delaware for which at least 50% of the equipment or components are manufactured in Delaware. This was added by S.S. 1 for S.B. 119 in 2010.
  • An additional 10% credit (i.e., 110% credit) for solar or wind installations sited in Delaware and installed with a minimum 75% state workforce. This was added by S.S. 1 for S.B. 119 in 2010.

The 2010 amendments added provisions allowing (but not requiring) the compliance schedules for eligible renewable energy resources and PV resources to be frozen by the State Energy Coordinator in consultation with the PSC for Commission-regulated electric companies (i.e., not including competitive suppliers) if the costs of compliance exceed certain thresholds. For eligible renewable energy resources, the cost threshold is 3% of total retail electricity costs during the same year. For PV the cost threshold is 1% of total retail electricity costs during the same year. Similar provisions exist for municipal utilities and rural electric cooperatives, although in this case the determination appears to rest with their own governing authorities. The statutory language also contains an additional clause which appears to require that the standard for municipal utilities and rural electric cooperatives be frozen if the total cost of compliance results in an increase of 4% or more in the average customer's monthly bill. The total cost of compliance must be calculated to include the cost of state rebate programs, REC or SREC purchases by suppliers, and ACPs and SACPs paid by suppliers. Suppliers may recover actual dollar-for dollar costs of RPS compliance -- with a conditional exception for ACPs and SACPs -- through a non-bypassable surcharge on customer bills.

The 2010 legislation also created a Renewable Energy Task Force composed of a variety of industry stakeholders and tasked with making recommendations about the establishment of trading mechanisms and other structures to support the growth of renewable energy markets in Delaware.

The passage of S.B. 124 in July of 2011 amended the RPS to allow energy output from a Qualified Fuel Cell Provider Project in fulfilling a portion of the requirements under the RPS Act. A qualified fuel cell provider project is a fuel cell power generation project located in Delaware owned and/or operated by a Qualified Fuel Cell Provider. A qualified provider is defined in S.B. 124 as a commercial operation which manufactures fuel cells capable of being run on renewable fuels and is designated as an economic development opportunity by the Delaware Economic Development Office and the DNREC. The energy produced by such projects shall fulfill the commission-regulated electric company's state-mandated REC and SREC requirements. The fulfillment of the equivalent of 1 REC is equal to each MWh of energy. These projects will fulfill no more than 30% of the SREC requirements at a ratio of 6 MWh of RECs per 1MWh of SRECs. Beginning in compliance year 2012,  S.B. 124 makes Delmarva Power & Light responsible for the RPS obligations of all its customers, and creates a process to assure that any supplier contracts in place are grandfathered through the transition.  SB 124 also creates a regulatory framework by which the Delaware Public Service Commission will review a Tariff to be filed by Delmarva deploying Delaware-manufactured fuel cells as part of a 30MW project.


*The 2007 amendments set two separate compliance schedules. Schedule 1 set the general renewable energy benchmarks while Schedule 2 applied only to wholesale renewable energy purchases for Standard Offer Service (SOS) for compliance years 2007, 2008, and 2009. Under Schedule 2, the benchmarks that were in place during the 2005 and 2006 SOS auctions were preserved. The table lists the Schedule 1 requirements for CY 2007-2008 through CY 2009-2010. The July 2010 amendments replaced these two separate schedules with a single compliance schedule beginning in CY 2010-2011.


 
Contact:
  Courtney Stewart
Delaware Public Service Commission
861 Silver Lake Blvd.
Cannon Bldg., Suite 100
Dover, DE 19904
Phone: (302) 736-7500
Fax: (302) 739-4849
E-Mail: Courtney.stewart@state.de.us
Web Site: http://www.state.de.us/delpsc/default.shtml
 
  Pamela Knotts
Delaware Public Service Commission
861 Silver Lake Blvd.
Cannon Bldg., Suite 100
Dover, DE 19904
Phone: (302) 736-7500
Fax: (302) 739-4849
E-Mail: pamela.knotts@state.de.us
Web Site: http://www.state.de.us/delpsc/default.shtml
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Disclaimer: The information presented on the DSIRE web site provides an unofficial overview of financial incentives and other policies. It does not constitute professional tax advice or other professional financial guidance, and it should not be used as the only source of information when making purchasing decisions, investment decisions or tax decisions, or when executing other binding agreements. Please refer to the individual contact provided below each summary to verify that a specific financial incentive or other policy applies to your project.

While the DSIRE staff strives to provide the best information possible, the DSIRE staff, the N.C. Solar Center, N.C. State University and the Interstate Renewable Energy Council, Inc. make no representations or warranties, either express or implied, concerning the accuracy, completeness, reliability or suitability of the information. The DSIRE staff, the N.C. Solar Center, N.C. State University and the Interstate Renewable Energy Council, Inc. disclaim all liability of any kind arising out of your use or misuse of the information contained or referenced on DSIRE Web pages.

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