2023 Solar Incentives Guide for Colonial Heights, VA - Tax Credits & Rebates
In this guide, we'll cover the latest solar incentives and rebates available in Colonial Heights.
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 Colonial Heights?
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 designed to mitigate the cost of installing solar panels on your home. This category of financial incentives is designed to encourage more people to convert their home partially or fully to renewable energy. Incentives may include things like discounts, cash back or credit towards your monthly utility bill. Some incentives are offered federally, while others are offered by the Virginia government or by your specific utility company, county or municipality. Some broad categories of solar incentives include:
- Net Metering: Be sure to talk to your Colonial Heights utility company about signing a net metering contract. 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 might receive either a dollar-for-dollar credit or a percentage of the value.
- Rebates: Your solar installer might help you claim a rebate, or partial refund after purchase, for your solar system. States or counties will also offer limited-time rebates at various times. The value of a rebate will usually come off your total price before any tax credits are calculated.
- Tax Credits: Tax credits decrease, dollar-for-dollar, how much income tax you owe the federal government. These are different from tax deductions.
- Tax Exemptions: Sales tax exemptions go into effect at the point of sale for your solar panels. Property tax exemptions let you ignore the value added by your solar system when you calculate how much property tax you need to pay on your home.
- Solar Renewable Energy Certificate (SREC): Generally, solar systems that produce over a threshold (usually small) amount of electricity can qualify for SRECs or similar performance-based incentives. SRECs and performance-based incentives in general are typically provided at the state level. SRECs can be sold to your utility company or another buyer, and generally the money you make is normally considered part of your taxable income.
Federal Solar Incentives
When someone says "solar incentives," you likely think of federal incentives first. It's likely that you've heard of the Federal Solar Investment Tax Credit, or ITC. This incentive is a tax credit equal to a specified percentage of the money you spend installing solar panels.
The ITC was originally for 30% of the total cost of solar system installation, although that number has fluctuated slightly over time 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 accessories, labor and equipment. There is no maximum amount you can claim. The ITC applies to solar panels installed after January 1, 2006 on your primary or secondary residence. The residence must be owned by you and in the United States.
Curious how the ITC might apply to your specific situation? Get in touch with your local Colonial Heights solar panel installation expert to get more information.
In August 2022, the ITC (now titled the Clean Energy Credit) was expanded and extended by the passage of the Inflation Reduction Act. The Clean Energy Credit is valid until 2035. Solar installation projects started after January 1, 2022 and completed by the end of 2032 may qualify for a 30% tax credit. This amount will decrease slightly on a yearly basis until the end of the current program. Starting in 2023, it will also be easier to qualify for credits for energy storage systems with the new act.
More information about the new Inflation Reduction Act can be found here. Your local Colonial Heights solar panel installation expert is the best person to answer your questions regarding the new Clean Energy Credit and how it may apply to you.
State & Local Solar Incentives
Some solar incentives are often also provided at the state and local level. Similar to federal incentives, these could include rebates, tax credits and more. These solar incentives — which may be provided by the state of Virginia, or by your county or municipality — could be offered for only a limited time, or on an ongoing basis.
Next Steps for Installing Solar in Colonial Heights
You can receive solar incentives from the Virginia government and the federal government, as well as from your local utility company. The increased availability of solar initiatives over the last 15 years has helped greatly increase nationwide adoption of solar energy. If you're ready to switch over to solar energy, getting in touch with your local Colonial Heights solar panel installation expert is an excellent place to start.
EcoWatch's Colonial Heights, 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.