2024 Solar Incentives Guide for Charlottesville, VA - Tax Credits & Rebates
In this guide, we'll cover the latest solar incentives and rebates available in Charlottesville.
You'll learn about:
- Local & State Solar Incentives
- Federal Tax Credits (Updated for 2024 and beyond)
- Ways to optimize your solar investment
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What Solar Tax Credits, Incentives, and Rebates are Available in Charlottesville?
Income Tax Deduction for Energy-Efficient Products
Local Option- Renewable Energy Machinery and Tools Property Tax Exemption
Local Option - Residential Property Tax Exemption for Solar
Federal Residential Renewable Energy Tax Credit
Source: https://www.dsireusa.org/
Solar incentives encourage homeowners to make the switch to renewable energy by providing incentives meant to lower the financial burden of solar panel installation and use. These incentives can include upfront discounts, cash back or credit towards your monthly utility bill. Some incentives are provided by the federal government, some by the Virginia government and some by your specific utility company, county or municipality. Categories of solar incentives include:
- Tax Credits: Tax credits are dollar-for-dollar reductions that lower the amount of income tax you owe the federal government. (A tax credit is different from a tax deduction.)
- Solar Renewable Energy Certificate (SREC): SRECs can be sold to your utility company (or other buyers) for cash that typically becomes part of your taxable income. In most cases, there is a small threshold of energy production to meet before your solar system can earn SRECs or similar performance-based incentives. Incentives like these are normally handled by your state government.
- Tax Exemptions: Tax exemptions can come in one of two forms. The first is sales tax exemption, which is applied at the time you purchase your solar panels. The second is property tax exemption. This allows you to exclude the value added by your solar system when paying property tax on your home.
- Net Metering: Net metering is an incentive you can get after your solar system is up and running. If you have a net metering agreement with your Charlottesville utility company, the company will subtract the value of the excess energy produced by your solar system from your monthly utility bill. In some locations, this credit is dollar-for-dollar, while in other areas you might get refunded a percentage of the value.
- Rebates: Solar rebates may be offered by your local utility company, or by your county or state. These rebates are essentially cash back that is applied after you pay for solar panels and before tax credits are calculated.
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Federal Solar Incentives
When thinking about solar incentives, you probably think of federal incentives first. One of the incentives that most 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 initially applied to 30% of the total cost of solar panel installation, and has fluctuated slightly over the years between 26-30%. The installation date of your solar system will determine what percentage you qualify for. The total 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.
Reaching out to your local Charlottesville solar panel installation expert is the best way to learn more about how the ITC could apply to you.
In August 2022, the Inflation Reduction Act made revisions to the ITC, now dubbed the Clean Energy Credit. With the new provisions, solar installation projects that are completed between 2022 and 2032, can qualify for a 30% tax credit. This credit amount will then decrease slightly each year until the current Clean Energy Credit expires in 2035. Beginning in 2023, it will also be easier to qualify for credits for energy storage systems under the new laws.
More information about the new Inflation Reduction Act can be found here. The best way to understand how the new Clean Energy Credit might apply to you is to reach out to your local Charlottesville solar panel company with your questions.
State & Local Solar Incentives
Some solar incentives may be offered at the local or state level. Like with federal incentives, these may include rebates, tax credits and more. Certain incentives are ongoing, while others might only be available for a limited time. They may be offered by the Virginia government, or by your county or municipality.
Next Steps for Installing Solar in Charlottesville
The nationwide use of solar energy has significantly increased in the past 15 years, in part thanks to the increase in availability of solar incentives. You may get these incentives from the federal government, the Virginia government or your local utility company. Reaching out to your local Charlottesville solar panel installation expert is the best first step towards getting the most money possible when you switch to solar energy.
EcoWatch's Charlottesville, VA Solar Incentives FAQs
How do I know if I qualify for solar incentives?
Typically, solar incentives apply to:
- a new solar panel system
- installed on property that you own
- within the U.S.
- within the date range specified by a particular incentive.
Specific incentives, including ones handled by the Virginia government or by your county/municipality, may have additional qualifications. Get in touch with your local Charlottesville solar installer to discover what incentives your project may qualify for.
What are the top solar panel installation companies near me?
To learn about the top solar panel installers near you, take a look at our article on Charlottesville's top solar panel companies.
When does the federal solar tax credit end?
The Clean Energy Credit (formerly named the federal solar tax credit, or ITC), is scheduled to end on January 1, 2035. Currently set at 30%, the credit will drop to 26% in 2033 and to 22% in 2034.
If I switch my appliances out for ones that can use solar energy, are there any credits I can claim?
The new Inflation Reduction Act provides multiple incentives that reward homeowners who make eco-friendly upgrades. Some incentives include rebates and tax credits for installing new electric appliances. You can find more details about these incentives here.
What if I add solar panels to a vacation home, rental property or commercial property? Do I still qualify for incentives?
Many solar incentives apply to a property you own that is located within the United States, and most secondary residences fall under this distinction. Other solar incentives may be available for commercial properties, depending on the specifics. We recommend speaking with your local solar installer and/or tax professional to better understand what incentives will apply to your specific situation.
Our goal is to reach as many people as we can with sensible solutions like solar energy. Our team of full-time local researchers collects solar price and installation data for every city in America then compiles it to create these digestible city guides. If you want to read our solar expert's opinion on the top solar companies featured here, follow this link.
Solar incentive research was conducted by Melissa Smith and Karsten Neumeister. Local data analysis was conducted by James Savino. See something we missed or could do better? Email the editor.