Flawed Report Claims You Should Pay for Excess Solar Power
Why a recent state-backed study misses the mark on fairness, savings and real solar adoption
By David T. Stevenson, Director
Center for Energy & Environmental Policy
June 5, 2025
The Caesar Rodney Institute (CRI) is raising a red flag over a newly released report that could drive up costs for Delaware's lower-income electric customers.
Published April 30, 2025, "Delaware Value of Solar"-commissioned by the Delaware Sustainable Energy Utility (SEU) and published by Energize Delaware-is now potentially being used to justify reimbursing rooftop solar owners for the excess electricity they send back to the grid. But most of those systems are owned by higher-income households, meaning the cost of those payments would be shifted onto everyone else.
In 2022, the General Assembly prohibited utilities from paying for excess solar generation unless a study identified broader benefits to justify it. This report is that study-but after a close review, CRI finds its conclusions fundamentally flawed and deeply misleading.
Generous Subsidies Already Exist
Even with these incentives, homeowners still make upfront investments and generally expect a six- to seven-year payback. System owners can also size their systems to avoid producing significant excess electricity-lowering both cost and payback time.
For example, a system that meets a household's needs without overproduction typically pays off in 6.8 years and delivers a 12.6% return on investment. A system that produces 10% more-without reimbursement-still yields an 11.4% return with just five additional months to recoup costs.
The Report's Core Claims Don't Hold
The SEU-funded study claims public benefits justify excess electricity reimbursement. But CRI's review shows its key arguments don't stand up to scrutiny:
2.) Taxpayer-funded credits don't boost Delaware's economy. The study also claims that federal tax subsidies benefit Delaware's economy by creating jobs in the solar industry. However, those credits are funded by Delaware taxpayers-removing the same amount of money from the broader economy and potentially costing jobs that the study does not account for.
3.) Environmental and health benefits are overstated. The study assumes that if solar owners are paid for excess power, they will build larger systems-resulting in health benefits from reduced air pollution and climate benefits by offsetting coal- and natural gas-fired electricity. But real-world evidence says otherwise:
- Real-world data doesn't support the assumption (See Chart 1.0). The study's core assumption-that paying for excess power will encourage homeowners to build larger systems-doesn't hold up in practice. In 2022, solar owners were reimbursed for excess electricity; by 2023, they were not. Yet, project volume rose 63% in 2023 compared to 2022, and average system size remained unchanged. Clearly, reimbursement is not a key factor in consumer decisions.
- Delaware already meets EPA air quality standards. The study claims societal benefits from lower emissions. However, the U.S. Environmental Protection Agency sets air quality standards to protect public health, and Delaware already meets all of them. While the EPA under President Biden suggested additional health savings at even lower emission levels, those claims rely on disputed studies that the current EPA is unlikely to adopt.
- The climate impact of excess power is negligible. In 2024, excess solar generation accounted for just 6,500 megawatt-hours (MWh)-only 0.06% of Delaware's total electricity use of 11.4 million MWh. That amount is too small to deliver meaningful emissions reductions.
- The report blurs the real issue. The study confuses the total value of solar energy with the narrow question of whether excess generation-just a small fraction-should be reimbursed. This misrepresents the scale and impact of the policy under review.
Chart 1.0: Residential Solar Projects (2022-2023)
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Excess Power Represents a Tiny Fraction of Total Energy Use
The Delaware Value of Solar report blurs the line between the total value of solar energy and the much narrower issue of excess power reimbursement. That distinction is critical.
- According to the U.S. Energy Information Administration's Electric Power Monthly, solar photovoltaic (PV) systems in Delaware produced 372,000 MWh in 2024. This accounted for 3.3% of the state's total electric demand-closely aligning with Delaware's Renewable Portfolio Standard goal of 3.25%.
- Of that solar output, 205,000 MWh came from small-scale systems, such as residential rooftop installations. According to the report's own figures (Figure 13), Delmarva Power customers generated about 81% of that amount, or roughly 166,000 MWh.
- But here's the key point: only 6,200 MWh-or 3.74% of Delmarva's residential solar generation-was classified as excess power. That's less than 0.06% of Delaware's total electricity consumption for the year.
In short, the entire debate over whether to pay for excess solar power centers on a sliver of the grid's energy mix. The environmental and economic arguments used to justify those payments are disproportionate to the actual impact.
Conclusion: Sound Policy Shouldn't Be Reversed
Delaware lawmakers made the right call when they ended payments for excess residential solar power. The data shows that those payments have little impact on whether homeowners choose to install solar, and the volume of excess power produced is too small to generate meaningful environmental or economic benefits.
The "Delaware Value of Solar" report fails to distinguish between the broader value of solar energy and the minimal effect of reimbursing surplus power. While it paints a compelling picture, the facts tell a different story: Delaware is already meeting its renewable energy goals, air quality standards are being achieved, and solar adoption continues to grow without the need for added subsidies.
Let's not reverse course based on flawed assumptions and inflated benefits. Instead, we should stay focused on policies that deliver real results for all Delawareans-not just a few.