2025 Solar Incentives Guide for Fairfax, VA - Tax Credits & Rebates
In this guide, we'll cover the latest solar incentives and rebates available in Fairfax.
You'll learn about:
- Local & State Solar Incentives
- Federal Tax Credits (Updated for 2024 and beyond)
- Ways to optimize your solar investment
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What Solar Tax Credits, Incentives, and Rebates are Available in Fairfax?
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
Source: https://www.dsireusa.org/
The term "solar incentives" covers a wide range of financial incentives implemented to make installing and using solar panels more affordable. This is done to encourage people to switch to renewable energy. Solar incentives may include upfront discounts, cash back or monthly credits towards your utility bill. Some incentives are given by the federal government, some by the Virginia government and some by your specific utility company, county or municipality. You might qualify for any of the following types of solar incentives:
- Tax Exemptions: Tax exemptions may come in two forms. First, there is sales tax exemption, applied when you purchase solar panels. The second is property tax exemption. This allows you to ignore the value added by your solar system when paying property tax on your home.
- Solar Renewable Energy Certificate (SREC): SRECs and other performance-based incentives may be available to you if your solar system produces over a specified (generally small) amount of electricity. These types of incentives are normally handled at the state level. You can sell the SRECs you receive to your utility company or other buyers, and the money you make is generally considered part of your taxable income.
- Tax Credits: Tax credits are dollar-for-dollar reductions (not deductions) in the amount of tax that you owe the federal government.
- Rebates: A rebate is a partial refund after the purchase of your solar panels. These may be offered by your local utility company, your state or your county. The rebates are usually applied before calculating tax credits.
- Net Metering: Net metering factors in after your solar panels are up and running. If you have in place a net metering agreement with your Fairfax utility company, it will subtract the value of the excess energy produced by your solar system from your monthly utility bill. In some locations, this credit is dollar-for-dollar, while in other places you might make back a percentage of the value.
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Federal Solar Incentives
Federal solar incentives are likely the first thing that comes to mind when you think about solar incentives. The solar incentive that you're most likely to have heard of is the Federal Solar Investment Tax Credit (ITC), which provides a credit on your taxes equal to a certain percentage of your solar system's cost.
The ITC can be applied to solar systems installed after January 1, 2006, on a primary or secondary residence in the United States that you own. Initially, the credit applied to 30% of the total cost – for panels, equipment, labor and accessories – although it may range from 26-30%, depending on the installation date of your solar system. There is no cap on the amount you can claim.
Your local Fairfax solar panel installation expert can offer more information about the ITC and how it applies to your situation.
The Inflation Reduction Act, passed in August 2022, added more provisions to the ITC (as well as renaming it to the Clean Energy Credit). The new Clean Energy Credit extends until 2035. You can now receive a 30% credit for solar systems that began installation after January 1, 2022, and are completed by the end of 2032. This new credit will then see a slight annual decrease until the date of expiration. The expansion also makes claiming credit for energy storage systems easier than ever before, starting in 2023.
Click here to learn more about the new Inflation Reduction Act. To understand how the new Clean Energy Credit will apply to you, get in touch with your local Fairfax solar installers.
State & Local Solar Incentives
Tax credits, rebates and more might be provided at multiple levels. On top of federal solar incentives, there are often state and local ones as well. These incentives might be provided by the Virginia government, or by your county or municipality. Some incentives may be ongoing, while others are available for a limited time.
Next Steps for Installing Solar in Fairfax
There are many types of solar incentives: those given by local utility companies, those provided by the federal government and those offered by the Virginia government, to name a few. Solar energy utilization has grown enormously in the last 15 years, thanks to these incentives. When you're ready to switch over to solar energy, getting in touch with your local Fairfax solar panel installation expert is a great first step.
EcoWatch's Fairfax, VA Solar Incentives FAQs
How much will a solar system save me on my electric bill in Fairfax annually?
Generally, homeowners in Fairfax who install solar panels save around $490.49 per year, or around $9,809.78 over 20 years after they make the switch.
I want to trade in my old appliances for ones that are more energy-efficient. Are there any incentives I can claim?
The new Inflation Reduction Act provides several incentives designed to reward homeowners who make eco-friendly upgrades. Some incentives include rebates and tax credits for installing new electric appliances. You can find more details about these incentives here.
Can I claim incentives both towards the initial cost of solar panels, and later as reimbursement?
Yes, you can claim both rebates and tax credits towards the cost of solar panels. Depending on which incentives you are eligible for, they may apply in a different order. Be sure to speak with your solar installer or a local tax professional to ensure that you are claiming the correct incentives and that you're getting the most money possible.
Can I use multiple types of renewable energy to power my home?
Yes, you can employ multiple types of renewable energy to power your home — for example, a combination of solar and wind power. You can also combine renewable energy generation with a backup source of non-renewable energy. Be sure to discuss the details of your plan with your local Fairfax solar panel installer, to make sure you know what you'll need and what types of incentives you might or might not qualify for.
What if I want to add solar panels to a vacation home, rental property or commercial property? Will I still qualify for incentives?
Many solar incentives are intended to apply to a property you own that is located within the United States; most secondary residences fall into this category. Other solar incentives may be available for commercial properties, depending on the details. We recommend speaking with your local solar installer and/or tax professional to fully understand what incentives apply to your specific situation.
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.