2023 Solar Incentives Guide for Chesapeake, VA - Tax Credits & Rebates
In this guide, we'll cover the latest solar incentives and rebates available in Chesapeake.
You'll learn about:
- Local & State Solar Incentives
- Federal Tax Credits (Updated for 2023 and beyond)
- Ways to optimize your solar investment
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What Solar Tax Credits, Incentives, and Rebates are Available in Chesapeake?
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
Solar incentives are meant to help mitigate the cost of installing solar panels on your home. Financial incentives like these are designed to encourage more homeowners to switch their home over to renewable energy. These incentives might include upfront discounts, cash back or monthly credits towards your utility bill. Some incentives are offered by the federal government, some by the state of Virginia and some by your utility company, county or municipality. Some broad categories of solar incentives include:
- Tax Exemptions: Your solar system could qualify for both sales tax and property tax exemptions. Sales tax exemptions are effective at the time of purchase. Property tax exemptions let you ignore the value added by your solar panels when 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 federal government.
- Rebates: A solar rebate is a partial refund credited to your account after you've paid for your solar system. Rebates might be offered by your local utility company, your county or your state. The rebates are usually applied before tax credits are calculated.
- Solar Renewable Energy Certificate (SREC): SRECs and similar performance-based incentives are normally 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 is generally considered part of your taxable income.
- Net Metering: Net metering is an incentive you can get once your solar panels are up and running. If you have a net metering agreement in place with your Chesapeake utility company, they 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 other areas you might make back a percentage of the value.
Federal Solar Incentives
When thinking about solar incentives, you probably think of federal incentives first. A federal incentive many people are likely familiar with is the Federal Solar Investment Tax Credit (ITC). This is a tax credit for a certain percentage of the cost of your solar system.
The ITC can be applied to a solar system installed on your primary or secondary residence in the United States. The solar panels must have been installed after January 1, 2006 on a property owned by you for you to be eligible for the credit. The ITC initially covered 30% of all system installation costs (panels, accessories, equipment and labor), although this amount has fluctuated over time between 26-30%. The installation date of your solar system will determine what percentage you are eligible for. There is no cap on the amount you can claim.
To better understand how the ITC might apply to you, call your local Chesapeake solar panel installation expert and request more information.
In August 2022, the ITC (now referred to as the Clean Energy Credit) was expanded and extended by the passage of the Inflation Reduction Act. The Clean Energy Credit re-raises the credit up to 30% for solar systems installed between 2022 and 2032. After 2032, the percentage will decrease slightly each year until the program expires in 2035. The program 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. The easiest way to understand how the new Clean Energy Credit might apply to you is to talk with your local Chesapeake solar panel installation expert.
State & Local Solar Incentives
Some solar incentives are often also offered at the local or state level. Similar to federal incentives, these may include tax credits, rebates and more. Certain incentives are ongoing, while others are offered for only a limited time. These local incentives may come from the Virginia government, or from your specific county or municipality.
Next Steps for Installing Solar in Chesapeake
Solar energy use nationwide has gone up tremendously in the past 15 years, in part due to the growth in the number of solar incentives. You may get these incentives from your local utility company, the Virginia government or the federal government. Call your local solar panel installation expert today to learn more and to save as much money as possible on a solar system for your Chesapeake home.
EcoWatch's Chesapeake, VA Solar Incentives FAQs
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.