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

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

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

Solar incentives are designed to make renewable energy usage more affordable via financial incentives for individuals who install solar panels on their homes. Solar incentives can include cash back, upfront discounts or monthly credits towards your utility bill. Some incentives are offered by the federal government, some by the Virginia government and some by your utility company, county or municipality. Categories of solar incentives include:

• Rebates: A solar rebate is a partial refund after the purchase of your solar system. These could be offered by your local utility company, your state or your county. The discount that rebates offer is normally applied to the price of solar panels before tax credits are calculated.
• Tax Credits: Tax credits lower, dollar-for-dollar, how much income tax you owe the government. These are different from tax deductions.
• Solar Renewable Energy Certificate (SREC): SRECs and similar other performance-based incentives might be available to you if your solar system produces more than a specified (usually small) amount of electricity. Performance-based incentives are typically handled by the state government. You can sell SRECs to your utility company or other buyers, and the money you make is normally considered part of your taxable income.
• Tax Exemptions: Your solar system could qualify for exemptions on both sales and property tax. Sales tax exemptions come into effect at the time of purchase. Property tax exemptions allow you to exclude the added value of the solar panels when calculating property taxes on your home.
• Net Metering: You may be able to sign a net metering contract with your Danville utility company. This agreement may apply to all or a percentage of the excess electricity that is generated by your solar panels. They will then deduct this value from your utility bill each month.

Federal Solar Incentives

Federal incentives are the type of incentives that you are most likely to have some familiarity with. The solar incentive that you're most familiar with is probably the Federal Solar Investment Tax Credit (ITC), which gives you a credit on your taxes equal to a predetermined percentage of the cost of your solar system.

The ITC can be credited towards the value of solar panels installed on your primary or secondary residence in the United States. The solar panels must have been installed on a property you own after January 1, 2006 for you to claim the credit. Originally, the ITC covered 30% of all installation costs (panels, labor, accessories and equipment), although this amount has fluctuated over the last few years 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.

Your local Danville solar panel installer can provide you with more information about the ITC and how it may 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. Now, solar installation projects begun after January 1, 2022 and finished by December 31, 2032 may be eligible for a 30% tax credit. This percentage will then decrease slightly each year until the end of the current Clean Energy Credit 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 experts can answer your questions and explain how the new Clean Energy Credit applies to you.

State & Local Solar Incentives

There are often also state solar incentives in addition to those provided by the federal government. Tax credits, rebates and more can be offered at a more local level. These incentives — which may be given by the state of Virginia, or by your county or municipality — might be offered on an ongoing basis, or for only a limited time.

Next Steps for Installing Solar in Danville

The variety of solar incentives available has enormously increased the use of solar power nationwide over the past 15 years. You may receive solar incentives from the federal government, the Virginia government or from your local utility company. When you're ready to make the switch to solar energy, talking to your local Danville solar panel installation expert is a great first step.