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

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

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

Solar incentives help mitigate the cost of installing solar panels on your home. This category of financial incentives is intended to encourage more Americans to switch their home over to renewable energy. You may be eligible for various types of incentives, including cash back, discounts or monthly utility bill credits, depending on your situation. Some incentives come from your specific utility company, county or municipality, some from the state of Virginia and others from the federal government. Categories of solar incentives include:

• Rebates: Solar rebates may be provided by your county or state, or by your local utility company. These rebates work as partial refunds that are applied after you pay for solar panels and before tax credits are calculated.
• Solar Renewable Energy Certificate (SREC): SRECs are credits that can be sold to your utility company (or other buyers) for cash that is generally considered part of your taxable income. Typically, there is a small threshold of energy production to meet before your solar system qualifies for SRECs or similar performance-based incentives. Incentives like these are generally handled at the state level.
• Tax Credits: Unlike tax deductions, tax credits reduce, dollar-for-dollar, the amount of income tax that you owe the government.
• Tax Exemptions: Tax exemptions may come in two forms. The first is sales tax exemption, which is applied when you purchase solar panels. The second is property tax exemption. This allows you to ignore the added value of your solar system when calculating property tax for your home.
• Net Metering: Don't forget to speak to your Dumbarton utility company about signing a net metering contract. This allows you to get a credit towards your monthly utility bill for the value of excess energy generated by your solar panels. You could receive either a dollar-for-dollar credit or a percentage of the value.

Federal Solar Incentives

When thinking about solar incentives, you probably think of federal incentives first. It's likely that you've heard of the Federal Solar Investment Tax Credit, or ITC. This is a tax credit equal to a predetermined percentage of the money you spend on your solar system.

The ITC was originally for 30% of the cost of solar system installation, although that number has fluctuated slightly over time between 26-30%. The installation date of your solar system will determine what percentage you qualify for. The total installation cost includes the panels themselves as well as the cost of equipment, labor and accessories. There is no maximum amount you can claim. The ITC applies to solar panels installed after January 1, 2006 on your primary or secondary residence. The residence must be owned by you and in the United States.

To more fully understand how the ITC might apply to your situation, call your local Dumbarton solar panel installation expert and request more information.

The Inflation Reduction Act, passed in August 2022, expanded and extended the ITC (as well as retitling it the Clean Energy Credit). For solar system installations that begin after January 1, 2022 and are completed by the end of 2032, homeowners can receive a credit for 30% of the total cost. This percentage will decrease annually after 2032 until the Clean Energy Credit ends in 2035. The expansion to the program also makes it easier to get credit for energy storage systems, starting in 2023.

More information about the new Inflation Reduction Act can be found here. Your local Dumbarton solar panel company is the best resource for answering your questions about the new Clean Energy Credit and how it applies 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 can be offered at a more local level. Some incentives are ongoing, while others are available for a limited time. Incentives may be provided by your county or municipality, or by the Virginia government.

Next Steps for Installing Solar in Dumbarton

The nationwide use of solar energy has gone up significantly in the last 15 years, in part thanks to the increase in availability of solar incentives. You might receive these incentives from the Virginia government, the federal government or your local utility company. When you're ready to make the switch to solar energy, reaching out to your local Dumbarton solar panel installation expert is a great first step.