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

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

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

The phrase "solar incentives" generally refers to financial incentives designed to encourage the adoption and use renewable energy by making the installation and use of solar panels more affordable. You may be eligible for several kinds of incentives, including cash back, discounts or credit towards your monthly utility bill, depending on your situation. Some incentives come from your specific utility company, county or municipality, some from the Virginia government and others from the federal government. Categories of solar incentives include:

• Tax Exemptions: Your solar panels might qualify for both sales tax and property tax exemptions. Sales tax exemptions are effective at the time of purchase. Property tax exemptions allow you to exclude the value added by your solar panels when you are calculating property taxes on your house.
• Tax Credits: Unlike tax deductions, tax credits reduce, dollar-for-dollar, the amount of income tax that you owe the government.
• Net Metering: Make sure you talk to your Centreville utility company about signing a net metering agreement. 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 may receive either a dollar-for-dollar credit or a percentage of the value.
• Solar Renewable Energy Certificate (SREC): SRECs and similar performance-based incentives might be available to you if your solar system produces over a specified (typically small) amount of electricity. Performance-based incentives are normally handled by the state government. You can sell SRECs to your utility company or other buyers, and the money you make is normally considered part of your taxable income.
• Rebates: A rebate is a partial refund given after you've purchased your solar panels. These may be offered by your local utility company, your state or your county. The cash back that you get from the rebates is normally applied before tax credits are calculated.

Federal Solar Incentives

Federal incentives are the type of incentives that you are most likely to have some knowledge of. An incentive many people are likely familiar with is the Federal Solar Investment Tax Credit (ITC). This incentive is a tax credit for a specified percentage of your solar system's cost.

The ITC applies to solar panels installed after January 1, 2006, on a primary or secondary residence in the United States that you own. The credit initially covered 30% of the total cost – for panels, labor, accessories and equipment – although the percentage may range from 26-30%, depending on when your solar project was undertaken. There is no cap on the claim amount.

Your local Centreville solar panel installer can give you more information about the ITC and how it may apply to your situation.

The Inflation Reduction Act, passed in August 2022, added more provisions to the ITC (as well as renaming it to the Clean Energy Credit). Homeowners can now receive a credit of 30% of the total solar system installation costs for projects started after January 1, 2022, and completed before the end of 2032. The credit percentage will then begin to decrease on a yearly basis until the Clean Energy Credit ends 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. Your local Centreville solar panel installation expert is the best person to answer your questions about the new Clean Energy Credit and how it may apply to you.

State & Local Solar Incentives

Not all solar incentives are federal; tax credits, rebates and more might also be offered at the state and local level. Some incentives are offered for only a limited time, while others are ongoing. Local solar incentives may come from the Virginia government, or from your specific county or municipality.

Next Steps for Installing Solar in Centreville

There are many types of solar incentives: those provided by local utility companies, those provided by the federal government and those given by the Virginia government, to name a few. Solar energy utilization has increased tremendously in the last 15 years, thanks to these incentives. We recommend talking to your local Centreville solar installer to learn more about these incentives and to be sure that you're getting the largest number possible for your solar panels.