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

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

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

The phrase "solar incentives" broadly refers to financial incentives that are in place to encourage the adoption and use renewable energy by making the installation and use of solar panels more affordable. Incentives may include things like discounts, cash back or credit on your utility bill each month. Some incentives are provided by the federal government, while others are offered by the state of Virginia or your utility company, county or municipality. Some solar incentives you might qualify for are:

• Net Metering: You can sign a net metering contract with your Chesapeake utility company, that may apply to all or a percentage of the excess electricity that is generated by your solar panels. They will then subtract this value from your monthly utility bill.
• Rebates: Solar rebates might be offered by your county or state, or by your local utility company. These rebates work as partial refunds that are applied after you pay for solar panels and before tax credits are calculated.
• 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 added value of your solar system when paying property tax on your home.
• Tax Credits: Unlike tax deductions, tax credits reduce, dollar-for-dollar, the amount of income tax that you owe the federal government.
• Solar Renewable Energy Certificate (SREC): SRECs are credits that can be sold to your utility company (or other buyers) for money that typically becomes part of your taxable income. In most cases, you must meet a certain (small) threshold of energy production before your solar system can earn SRECs or other performance-based incentives. SRECs and similar incentives are normally handled at the state level.

Federal Solar Incentives

When thinking about solar incentives, federal incentives may be the first thing that comes to mind. The Federal Solar Investment Tax Credit, or ITC, is probably the most commonly known federal solar incentive. The ITC allows you to claim a tax credit for a set percentage of the cost of your solar system.

The ITC applies towards solar systems installed after January 1, 2006 and allows you to deduct from your taxes a percentage of the total cost of solar panels, equipment, accessories and labor. This credit can be claimed on solar panels installed on a primary or secondary residence that you own in the United States. The original claim amount was 30% of the total cost, although depending on when the project was completed, your credit may range from 26-30%. There is no maximum claim amount.

Your local Chesapeake solar panel installer can provide you with more information about the ITC and how it might apply to your situation.

The ITC was both renewed and expanded by the passage of the Inflation Reduction Act in August 2022. It's also now called the Clean Energy Credit. Under the new program, solar installation projects that are completed between 2022 and 2032 may be eligible for a 30% tax credit. The amount of the credit will then decrease slightly each year until the end of the current Clean Energy Credit in 2035. Starting in 2023, it will also be easier to claim credits for energy storage systems under this new program.

More information about the new Inflation Reduction Act can be found here. Your local Chesapeake solar panel company is the best resource for answering your questions regarding the new Clean Energy Credit and how it applies to you.

State & Local Solar Incentives

There are often also state solar incentives in addition to those provided by the federal government. Rebates, tax credits and more can be offered at a more local level. These incentives might be offered by your county or municipality, or by the Virginia government. Certain incentives are ongoing, while others are available for a limited time.

Next Steps for Installing Solar in Chesapeake

The variety of solar incentives available has contributed greatly to the increase in the adoption of solar energy nationwide over the past 15 years. You may receive solar incentives from the Virginia government, the federal government or your local utility company. Your local Chesapeake solar panel installer can help you learn more about which incentives you can apply for, and get you feeling good about making the change to renewable energy today.