2023 Solar Incentives Guide for Baileys Crossroads, VA - Tax Credits & Rebates

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

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

The term "solar incentives" refers to financial incentives implemented by the government and by solar companies to encourage increased use of renewable energy by making solar panels more affordable. Solar incentives may include upfront discounts, cash back or monthly credits towards your utility bill. Some incentives are given by the federal government, some by the state of Virginia and some by your specific utility company, county or municipality. Some broad categories of solar incentives include:

• Tax Exemptions: Tax exemptions can come in one of two forms. The first is sales tax exemption, applied when you purchase solar panels. The second is property tax exemption, which allows you to exclude the value added by your solar system when paying property tax on your house.
• Rebates: Some solar companies will help you claim a rebate, or partial refund after purchase, for your solar system. States or counties will also offer limited-time rebates at various times. If you receive a rebate, that amount will usually be deducted from the total price before any tax credits are calculated.
• Net Metering: Be sure to speak to your Baileys Crossroads utility company about signing a net metering agreement. This will allow you to receive credit towards your monthly utility bill for the value of excess energy your solar panels generate. You could receive either a dollar-for-dollar credit or a percentage of the value.
• Solar Renewable Energy Certificate (SREC): SRECs and similar other performance-based incentives might be available to you if you have a solar system that produces over a specified (typically small) amount of electricity. These types of incentives are normally handled at the state level. You can sell your SRECs to your utility company or other buyers, and the money you make is generally considered part of your taxable income.
• Tax Credits: Tax credits are dollar-for-dollar reductions (not deductions) in how much in taxes you owe the federal government.

Federal Solar Incentives

When someone says "solar incentives," you probably think of federal incentives first. 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 predetermined percentage of the cost of your solar system.

The ITC applies to solar panels installed on your primary or secondary residence in the United States. The solar panels have to have been installed after January 1, 2006 on a property you own for you to claim the credit. The ITC initially covered 30% of all system installation costs (panels, equipment, labor and accessories), although the amount has fluctuated over the years between 26-30%. The installation date of your solar system will determine what percentage you are eligible for. There is no cap on the claim amount.

Speaking with your local Baileys Crossroads solar panel installer is the best way to learn more about how the ITC may apply to you.

The ITC was renewed and increased in scope after the passage of the Inflation Reduction Act in August 2022. It's also now called the Clean Energy Credit. The Clean Energy Credit bolsters the current credit, increasing it up to 30% for solar installation projects started after January 1, 2022 and completed by the end of 2032. At this point, the credit percentage will be reduced slightly each year until the program expires in 2035. The program expansion also makes claiming credit for energy storage systems easier than ever before, beginning 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 Baileys Crossroads solar installers.

State & Local Solar Incentives

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

Next Steps for Installing Solar in Baileys Crossroads

You can qualify for solar incentives from the Virginia government and the federal government, as well as from your local utility company. This increase in availability of solar initiatives in the past 15 years has helped increase nationwide solar energy use enormously. Getting in touch with your local Baileys Crossroads solar panel installation company is the right first step towards making sure you get all the incentives you qualify for when you switch to solar energy.