2023 Solar Incentives Guide for Woodfin, NC - Tax Credits & Rebates

What Solar Tax Credits, Incentives, and Rebates are Available in Woodfin?

Source: https://www.dsireusa.org/

The phrase "solar incentives" includes a range of financial incentives implemented to make installing and using solar panels more affordable. This is done to encourage people to switch to renewable energy. Incentives could include things like discounts, cash back or credit on your utility bill each month. Some incentives are offered federally, while others are handled by the North Carolina government or your utility company, county or municipality. Some broad categories of solar incentives include:

• Tax Exemptions: Sales tax exemptions go into effect at the time of purchase for your solar panels. Property tax exemptions let you exclude the value that your solar panels add when calculating the amount of property tax you need to pay on your house.
• Solar Renewable Energy Certificate (SREC): SRECs and other similar performance-based incentives are usually handled by your state government. Once your solar system meets a certain threshold (normally a small amount of energy production), you are eligible to receive SRECs that you can then sell to your utility company or other buyers. The money you receive is usually considered part of your taxable income.
• Net Metering: Net metering becomes relevant after your solar system is up and running. If you've signed a net metering agreement with your Woodfin utility company, the company will subtract the value of the excess energy your solar system produces from your utility bill each month. In some places, this is a dollar-for-dollar credit, while in others you may make back a percentage of the value.
• Rebates: Rebates, or partial refunds after a purchase, are typically given before any solar tax credits are calculated. These rebates may be offered by your local utility company, by your state or by your county.
• Tax Credits: Different from tax deductions, tax credits reduce, dollar-for-dollar, the amount of income tax that you owe the government.

Federal Solar Incentives

Federal incentives are the type of incentives that you are most likely to have some knowledge of. You may have heard of the Federal Solar Investment Tax Credit, or ITC. This is a tax credit that reduces your taxes by a certain percentage of the money you spend installing solar panels.

The ITC originally covered 30% of the cost of solar panel installation, and has fluctuated slightly over the last few years between 26-30%. The installation date of your solar system will determine what percentage you qualify for. The cost of installation includes the panels themselves as well as the cost of equipment, labor and accessories. There is no maximum amount you can claim. The ITC can be applied to solar panels installed after January 1, 2006 on your primary or secondary residence. The residence must be in the United States and owned by you.

To best understand how the ITC could apply to you, call your local Woodfin solar panel installer and ask for more information.

The Inflation Reduction Act, passed in August 2022, expanded and extended the ITC (as well as renaming it to the Clean Energy Credit). The Clean Energy Credit runs until 2035. Any solar installation project that is completed between January 1, 2022 and December 31, 2032 may qualify for a 30% tax credit. The amount will be decreased slightly each year until the current program ends. The expansion also makes credits for energy storage systems even easier to claim, starting in 2023.

Click here to learn more about the new Inflation Reduction Act. To best understand how the new Clean Energy Credit might apply to you, talk to your local Woodfin solar installation company.

State & Local Solar Incentives

Some solar incentives are often also offered at the local or state level. Like with federal incentives, these could include rebates, tax credits and more. Certain incentives are ongoing, while others may only be available for a limited time. Incentives might be offered by your county or municipality, or by the North Carolina government.

Next Steps for Installing Solar in Woodfin

There are many types of solar incentives: those provided by local utility companies, those provided by the North Carolina government and those provided by the federal government, to name a few. The use of solar energy has grown enormously in the last 15 years, partially thanks to these incentives. If you're ready to switch over to solar energy, calling your local Woodfin solar panel installation expert is an excellent place to start.