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

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

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

Solar incentives are meant to encourage people to switch their home over to renewable energy by providing incentives that lower the financial burden of solar panel installation and use. Solar incentives may include upfront discounts, cash back or credit towards your monthly utility bill. Some incentives are offered by the federal government, some by the Virginia government and some by your utility company, county or municipality. Some broad categories of solar incentives include:

• Tax Credits: These credits are dollar-for-dollar reductions (not deductions) in how much in taxes you owe the government.
• Tax Exemptions: Sales tax exemptions are applied at the point of sale for your solar system. Property tax exemptions let you ignore the added value of your solar system when you're calculating the amount of property tax you need to pay on your home.
• Solar Renewable Energy Certificate (SREC): SRECs and similar other performance-based incentives may be available to you if you have a solar system that produces more than a specified (usually small) amount of electricity. Performance-based incentives are normally handled by the state government. You can sell SRECs to your utility company or other buyers, and the money you make is usually considered part of your taxable income.
• Net Metering: Net metering factors in once your solar system is up and running. If you have a net metering agreement with your Dranesville utility company, the company will subtract the value of the excess energy produced by your solar system from your utility bill each month. In some locations, this credit is dollar-for-dollar, while in other areas you may make back a percentage of the value.
• Rebates: Rebates, or cash back after a purchase, are usually given prior to any solar tax credits being calculated. Rebates may be given by your local utility company, by your state or by your county.

Federal Solar Incentives

Federal solar incentives are probably the first thing that you think of when thinking about solar incentives. The Federal Solar Investment Tax Credit, or ITC, is the best-known federal solar incentive. The ITC provides a tax credit for a predetermined percentage of the cost of your solar system.

The ITC can be applied to 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, accessories, equipment 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 amount you could claim was 30% of the total cost, although certain projects may qualify for only 26%, depending on the details. There is no maximum claim amount.

To best understand how the ITC may apply to your situation, get in touch with your local Dranesville solar panel installation expert and request more information.

In August 2022, the Inflation Reduction Act expanded and extended the ITC, now referred to as the Clean Energy Credit. The new Clean Energy Credit extends until 2035. Homeowners can now apply for a 30% credit for solar systems that began installation after January 1, 2022, and are completed by the end of 2032. This credit will then decrease annually until the date of expiration. The expansion to the program also makes credits for energy storage systems even easier to claim, beginning in 2023.

More information about the new Inflation Reduction Act can be found here. To fully understand how the new Clean Energy Credit will apply to you, speak with your local Dranesville solar installation expert.

State & Local Solar Incentives

Federal solar incentives are not your only option; tax credits, rebates and more might also be offered at the state and local level. Some incentives are ongoing, while others may only be available for a limited time. These incentives may be given by your county or municipality, or by the Virginia government.

Next Steps for Installing Solar in Dranesville

The variety of solar incentives available has enormously increased the use of solar power nationwide over the past 15 years. You can get solar incentives from the federal government, the Virginia government or from your local utility company. Getting in touch with your local Dranesville solar panel installer is a great first step towards getting the most money possible when you switch to solar energy.