2023 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/

The phrase "solar incentives" refers to a wide range of financial incentives put in place to make installing and using solar panels more affordable. This is done to encourage people to switch to renewable energy. Various kinds of incentives, like discounts, cash back or credit towards your monthly utility bill, might be available to you. Certain incentives may be offered by the Virginia government, by your utility company or by county or municipality, while others are federal. Some solar incentives you might qualify for are:

• Solar Renewable Energy Certificate (SREC): Typically, solar systems that produce over a threshold (generally small) amount of electricity qualify for SRECs or similar performance-based incentives. SRECs and similar incentives are typically given at the state level. SRECs can be sold to your utility company or another buyer, and the money you receive is normally considered part of your taxable income.
• Net Metering: Don't forget to talk to your Dranesville 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 may receive either a dollar-for-dollar credit or a percentage of the value.
• Tax Exemptions: Sales tax exemptions are effective at the point of sale for your solar panels. Property tax exemptions let you exclude the added value of your solar system when calculating how much property tax you need to pay.
• Tax Credits: Tax credits decrease, dollar-for-dollar, the amount of income tax you owe the federal government. These are different from tax deductions.
• Rebates: Solar rebates might be provided by your local utility company, or by your state or county. These rebates are essentially cash back that is applied after you pay for solar panels and before tax credits are calculated.

Federal Solar Incentives

When you think about solar incentives, you probably think of federal incentives first. An incentive that most people are likely to be familiar with is the Federal Solar Investment Tax Credit (ITC). This incentive is a tax credit for a certain 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 system has to have been installed on a property you own after January 1, 2006 for you to be eligible for the credit. Initially, the ITC applied to 30% of all installation costs (panels, accessories, equipment and labor), although the amount has fluctuated slightly over the last few years between 26-30%. The amount you qualify for will depend on when your solar system was installed. There is no cap on the claim amount.

Have questions about how the ITC applies to your specific situation? Get in touch with your local Dranesville solar panel installation expert to get more information.

In August 2022, the Inflation Reduction Act expanded and extended the ITC, now titled the Clean Energy Credit. The new Clean Energy Credit is valid until 2035. You can now apply for a 30% credit for solar systems installed between January 1, 2022 and December 31, 2032. The credit will then be decreased by a few percentage points every year until it expires. Starting in 2023, the expansion to the program will also make claiming credit for energy storage systems easier than ever before.

Click here to learn more about the new Inflation Reduction Act. Your local Dranesville 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

In addition to those provided at the federal level, there are often also state solar incentives. Rebates, tax credits and more may be available at a more local level. Incentives might be offered by your county or municipality, or by the state of Virginia. Some incentives are available for only a limited time, while others are ongoing.

Next Steps for Installing Solar in Dranesville

You can apply for solar incentives from the Virginia government and the federal government, as well as from your local utility company. The increased availability of solar initiatives in the past 15 years has helped greatly increase nationwide adoption of solar energy. We recommend talking to your local Dranesville solar installer to learn more about these incentives and to make sure that you're getting all of the money you can for your solar panels.