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

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

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

Solar incentives encourage homeowners to switch to renewable energy by offering incentives that lower the financial burden of solar panel installation and use. Incentives might include things like discounts, cash back or credit towards your monthly utility bill. Some incentives are provided by the federal government, while others are offered by the Virginia government or by your specific utility company, county or municipality. Types of solar incentives might include:

• Net Metering: You can sign a net metering contract with your Colonial Heights utility company, that may apply to all or a percentage of the excess electricity your solar panels generate. Your utility company will then deduct this value from your utility bill each month.
• Tax Credits: Tax credits are dollar-for-dollar reductions in the amount of income tax that you owe the government. (A tax credit is different from a tax deduction.)
• Solar Renewable Energy Certificate (SREC): SRECs and similar performance-based incentives are normally handled by your state government. Once your solar panel system meets a predetermined threshold (generally a small amount of energy production), you can receive SRECs that can then be sold to your utility company or other buyers. The money you receive from the sale is generally considered part of your taxable income.
• Rebates: Some solar companies will help you claim a rebate, or partial refund of your purchase, for your solar system. Counties or states will also sometimes offer limited-time rebates. The value of a rebate will usually come off your total price before any tax credits are calculated.
• Tax Exemptions: These could come in the form of property tax exemptions, which allow you to ignore the value of your solar system when paying taxes on your house. They may also include exemptions on sales tax at the time of purchase.

Federal Solar Incentives

When people think of solar incentives, federal incentives might be the first thing that comes to mind. The Federal Solar Investment Tax Credit, or ITC, is likely the most commonly known federal solar incentive. The ITC provides you with a tax credit for a set percentage of your solar system's cost.

The ITC covers solar systems installed after January 1, 2006, and under this program you can deduct from your taxes a percentage of the total cost of solar panels, labor, accessories and equipment. You can receive this credit for a solar panel system installed on a primary or secondary residence in the United States that you own. Originally, you could claim 30% of the total cost, although depending on when the project was completed, your credit may range from 26-30%. There is no maximum amount you can claim.

Have questions about how the ITC applies to your specific situation? Get in touch with your local Colonial Heights solar panel installer to get more information.

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 qualify for a credit of 30% of the total costs of solar system installation for projects that began after January 1, 2022, and will be finished by the end of 2032. The credit percentage will then decrease yearly until the Clean Energy Credit expires in 2035. Beginning in 2023, it will also be easier to obtain credits for energy storage systems under this new program.

More information about the new Inflation Reduction Act can be found here. Your local Colonial Heights solar panel installer can answer any questions you have and explain how the new Clean Energy Credit may apply to you.

State & Local Solar Incentives

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

Next Steps for Installing Solar in Colonial Heights

Solar incentives can be provided by your local utility company, the federal government or the Virginia government. The large number of incentives available has helped nationwide use of solar energy increase greatly in the last 15 years. Speak with your local solar panel installation company today to discover more about the various programs and to save as much money as possible on a solar system for your Colonial Heights home.