2025 Solar Incentives Guide for Alexandria, VA - Tax Credits & Rebates

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

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

Solar incentives are intended to encourage homeowners to make the switch to renewable energy by offering financial incentives that lower the burden of solar panel installation and use. You might qualify for several kinds of incentives, including cash back, discounts or credit towards your monthly utility bill, depending on your situation. Certain incentives come from your specific utility company, county or municipality, some from the Virginia government and others from the federal government. Types of solar incentives might include:

• Rebates: Some solar companies will help you claim a rebate, or partial refund of your purchase, for your solar system. States or counties will also offer limited-time rebates at various times. The value of a rebate will usually come off your total price before tax credits are calculated.
• Tax Credits: Tax credits reduce, dollar-for-dollar, how much income tax you owe the government. Tax credits differ from tax deductions.
• Solar Renewable Energy Certificate (SREC): SRECs and other similar performance-based incentives are generally handled at the state level. Once your solar system meets a predetermined 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 make from the sale is generally considered part of your taxable income.
• Tax Exemptions: These might come in the form of property tax exemptions, which allow you to ignore the value added by your solar panels when paying property tax on your home. You may also qualify for an exemption on sales tax at the time of purchase.
• Net Metering: Make sure you speak with your Alexandria utility company about signing a net metering contract. This allows you to get a credit towards your utility bill every month for the value of excess energy generated by your solar panels. You could receive either a dollar-for-dollar credit or a percentage of the value.

Federal Solar Incentives

Federal incentives are the type of incentives that you are most likely to have heard of. The solar incentive that you may be most familiar with is the Federal Solar Investment Tax Credit (ITC), which gives you a credit on your taxes equal to a percentage of the cost of your solar system.

The ITC originally covered 30% of the total cost of solar panel installation, and has fluctuated slightly over the years between 26-30%. The percentage you qualify for will depend on when your solar system was installed. The total cost of installation includes the panels themselves as well as the cost of accessories, equipment and labor. There is no maximum amount you can claim. The ITC applies 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 more fully understand how the ITC might apply to you, call your local Alexandria solar panel installer and ask for more information.

The Inflation Reduction Act, passed in August 2022, added more provisions to the ITC (as well as renaming it to the Clean Energy Credit). For solar systems installed between January 1, 2022, and December 31, 2032, homeowners can receive a credit equal to 30% of the total cost. After 2033, the percentage will decrease annually until the Clean Energy Credit ends in 2035. Starting in 2023, it will also be easier to qualify for credits for energy storage systems with the new act.

Click here to learn more about the new Inflation Reduction Act. To better understand how the new Clean Energy Credit might apply to you, get in touch with your local Alexandria solar installation company.

State & Local Solar Incentives

Some solar incentives are often also provided by state and local governments. As with federal incentives, these may include tax credits, rebates and more. These solar incentives — which might be provided by the state of Virginia, or by your county or municipality — could be offered for only a limited time, or on an ongoing basis.

Next Steps for Installing Solar in Alexandria

Solar incentives can be offered by your local utility company, the federal government or the Virginia government. The growing number of available solar incentives has contributed to a large increase in solar energy use in the last 15 years. Your local Alexandria solar panel installer can provide you with more details about which incentives you might qualify for, and get you on track to switch to renewable energy today.