2023 Solar Incentives Guide for Dranesville, VA - Tax Credits & Rebates
In this guide, we'll cover the latest solar incentives and rebates available in Dranesville.
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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By EcoWatch Local Advisors
Data Analysis: James Savino
Ranking Methodology: Karsten Neumeister
Updated March 14, 2023
Why you can trust EcoWatch
What Solar Tax Credits, Incentives, and Rebates are Available in Dranesville?
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
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.
Best Solar Financing
Blue Raven Solar
- Industry-leading in-house financing
- Competitive pricing
- Excellent reputation
- Doesn't offer solar batteries (coming 2022)
- Price-match guarantee
- Sleek, efficient, and durable solar panels
- Best solar battery on the market
- Some reported issues with customer service
- Customer service varies by local dealer
EcoWatch's Dranesville, VA Solar Incentives FAQs
What if I am planning to add a solar system to a vacation home, rental property or commercial property? Can I still qualify for incentives?
Many solar incentives apply to a property located within the United States that you own, and most secondary residences will fall into this category. Other solar incentives may be available for commercial properties, depending on the details. We recommend talking to your local solar installer and/or tax professional to fully understand what incentives will apply to your specific situation.
How do I learn if I qualify for specific solar incentives?
It's best to speak with your local Dranesville solar installer to get an understanding of which incentives your project may qualify for. Typically, solar incentives apply to new solar panel systems installed on property you own (in the U.S.) between the dates specified by the incentive. Some incentives, like those provided by the Virginia government, might have other requirements.
My home already has solar panels. Do I qualify for any incentives?
An excellent idea would be to talk to a representative from the company that installed your solar system — or get in touch with a local Dranesville solar installer — to better understand which incentives you might qualify for. If your solar panels were installed after January 1, 2022, you likely qualify for the newly increased 30% tax credit under the Inflation Reduction Act. Solar panels installed between 2006 and 2021 may qualify for a tax credit of 26-30%.
Who installs solar panels near me?
To find the top solar panel installers near you, read our article on Dranesville's top solar panel companies.
How long until the federal solar tax credit ends?
The Clean Energy Credit (formerly called the federal solar tax credit, or ITC), currently ends on January 1, 2035. Currently set at 30%, the credit will drop to 26% in 2033 and to 22% in 2034.
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.