2023 Solar Incentives Guide for Danville, VA - Tax Credits & Rebates
In this guide, we'll cover the latest solar incentives and rebates available in Danville.
You'll learn about:
- Local & State Solar Incentives
- Federal Tax Credits (Updated for 2023 and beyond)
- Ways to optimize your solar investment
Solar installers are experts in maximizing your solar tax credits and rebates.
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Updated September 15, 2023
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What Solar Tax Credits, Incentives, and Rebates are Available in Danville?
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/
The term "solar incentives" refers to financial incentives implemented by the government and by solar companies to encourage the adoption and use renewable energy by making solar panels more affordable. You may be eligible for various kinds of incentives, including cash back, discounts or credit towards your monthly utility bill, depending on your situation. Some incentives come from your specific utility company, county or municipality, some from the Virginia government and others from the federal government. You might qualify for any of the following types of solar incentives:
- Tax Credits: Different from tax deductions, tax credits are dollar-for-dollar reductions in the amount of income tax that you owe the government.
- Net Metering: Net metering becomes relevant after your solar panels are up and running. If you've signed a net metering agreement with your Danville utility company, the company will subtract the value of the excess energy your solar system produces from your utility bill each month. In some locations, this is a dollar-for-dollar credit, while in others you might get refunded a percentage of the value.
- Tax Exemptions: Your solar system might qualify for exemptions on both sales and property tax. Sales tax exemptions are applied at the time of purchase. Property tax exemptions allow you to ignore the value added by your solar panels when you are calculating property taxes on your house.
- Rebates: A solar rebate is a partial refund given after you've purchased your solar panels. These could 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 other similar performance-based incentives are generally handled at the state level. Once your solar panel system meets the threshold (generally a small amount of energy production), you are eligible to receive SRECs that can then be sold to your utility company or other buyers. The money you receive is generally considered part of your taxable income.
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Federal Solar Incentives
Federal incentives are the kind of incentives that you are most likely to have some knowledge of. An incentive many people are likely familiar with is the Federal Solar Investment Tax Credit (ITC). This is a tax credit for a given percentage of your solar system's cost.
The ITC applies to solar panels installed after January 1, 2006 on a primary or secondary residence that you own in the United States. Initially, the credit applied to 30% of the total cost — for panels, labor, accessories and equipment — although the percentage may range from 26-30%, depending on the installation date of your solar system. There is no cap on the amount you can claim.
Reaching out to your local Danville solar panel installation expert is the best way to understand how the ITC may apply to your situation.
In August 2022, the Inflation Reduction Act laid out new provisions for the ITC, now dubbed the Clean Energy Credit. Under the new program, solar installation projects that are completed between 2022 and 2032 might qualify for a 30% tax credit. This credit amount will then see a slight annual decrease until the current Clean Energy Credit expires in 2035. Starting in 2023, the expansion to the program will also make it easier to get credit for energy storage systems.
Click here to learn more about the new Inflation Reduction Act. Your local Danville solar panel installation expert is the best person to answer your questions about the new Clean Energy Credit and how it applies to you.
State & Local Solar Incentives
There are often state solar incentives available in addition to federal ones. Tax credits, rebates and more can be offered at a more local level. The incentives — which might be handled by your county or municipality, or by the state of Virginia — might be offered for only a limited time, or on an ongoing basis.
Next Steps for Installing Solar in Danville
There are many types of solar incentives: those offered by local utility companies, those offered by the Virginia government and those offered by the federal government, to name a few. The use of solar energy has grown tremendously in the last 15 years, partially due to these incentives. If you're prepared to make the switch to solar energy, reaching out to your local Danville solar panel installation expert is a great first step.
EcoWatch's Danville, VA Solar Incentives FAQs
How do I learn if I qualify for solar incentives?
It's a smart idea to get in touch with your local Danville solar installer for a better understanding of which incentives your project may qualify for. Generally, solar incentives apply to new solar panel systems installed on a property you own (in the U.S.) within a specified date range. Some incentives, like those given by the state of Virginia, might have other requirements.
How much will a solar system save me annually on my electric bill in Danville?
Generally, Danville homeowners who install solar panels save approximately $1,015.88 per year, or approximately $19,301.80 over 20 years after they make the switch.
What are the environmental benefits of switching to solar energy?
Solar energy is a renewable energy source — by switching where you get your energy, you help reduce the strain on our planet's resources. You can also reduce the CO2 emissions from your home by 500 pounds yearly, or around 10,000 pounds over 20 years.
If I change out my appliances for ones that can utilize solar energy, are there any incentives that I can claim?
With the passage of the new Inflation Reduction Act, there are several new financial incentives that are available when you make eco-friendly improvements to your home. More details on these incentives, including information about incentives for purchasing new appliances, can be found here.
Can I use a combination of solar and another type of renewable energy to power my home?
You can use multiple types of renewable energy, or a combination of renewable and non-renewable energy, to power your home. Be sure to go over your ideas with your local Danville solar installation expert. They can help you as you plan for your project and also help you understand the various incentives that you might or might not qualify for.
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.