2025 Solar Incentives Guide for Falls Church, VA - Tax Credits & Rebates
In this guide, we'll cover the latest solar incentives and rebates available in Falls Church.
You'll learn about:
- Local & State Solar Incentives
- Federal Tax Credits (Updated for 2024 and beyond)
- Ways to optimize your solar investment
Solar installers are experts in maximizing your solar tax credits and rebates.
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What Solar Tax Credits, Incentives, and Rebates are Available in Falls Church?
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 phrase "solar incentives" broadly refers to financial incentives that are in place to encourage increased use of renewable energy by making the installation and use of solar panels more affordable. Solar incentives could include upfront discounts, cash back or monthly credits towards your utility bill. Some incentives are handled by the federal government, some by the Virginia government and some by your utility company, county or municipality. Categories of solar incentives include:
- Solar Renewable Energy Certificate (SREC): In general, solar systems that produce more than a predetermined (usually small) amount of electricity qualify for SRECs or other similar performance-based incentives. SRECs and the like are typically offered 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.
- Tax Exemptions: Tax exemptions can come in one of two forms. The first is sales tax exemption, applied at the time you purchase your solar panels. The second is property tax exemption, which allows you to ignore the value added by your solar system when calculating property tax for your home.
- Tax Credits: Unlike tax deductions, tax credits reduce, dollar-for-dollar, the amount of income tax that you owe the government.
- Net Metering: Net metering becomes relevant after your solar system is up and running. If you've signed a net metering agreement with your Falls Church utility company, it 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 others you may get refunded a percentage of the value.
- Rebates: A rebate is a partial refund after the purchase of your solar system. Rebates might be offered by your local utility company, your county or your state. The rebates are usually applied before calculating tax credits.
Federal Solar Incentives
When you think about solar incentives, you probably think of federal incentives first. You've likely heard of the Federal Solar Investment Tax Credit, or ITC. This incentive is a tax credit equal to a predetermined percentage of the money you spend on solar panels for your home.
The ITC can be applied to solar panels 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 the percentage may range from 26-30%, depending on when your solar project was undertaken. There is no cap on the claim amount.
Your local Falls Church solar panel installer can give you more information about the ITC and how it may apply to your situation.
The ITC was both renewed and expanded by the passage of the Inflation Reduction Act in August 2022. It's also now called the Clean Energy Credit. The Clean Energy Credit has increased the current credit up to 30% for solar installations undertaken between January 1, 2022, and December 31, 2032. After this, the percentage will decrease slightly each year until the program expires in 2035. The expansion 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. To best understand how the new Clean Energy Credit will apply to you, talk to your local Falls Church solar installers.
State & Local Solar Incentives
Rebates, tax credits and more can be provided at multiple levels. On top of federal solar incentives, there are often state and local ones, too. These incentives — which might be given by your county or municipality, or by the state of Virginia — might be offered for only a limited time, or on an ongoing basis.
Next Steps for Installing Solar in Falls Church
Solar incentives might come from the federal government, the Virginia government or your local utility company. The large number of solar incentives available has facilitated the nationwide growth of solar energy use in the last 15 years. When you're prepared to make the change to solar energy, getting in touch with your local Falls Church solar panel installation expert is an excellent place to start.
EcoWatch's Falls Church, VA Solar Incentives FAQs
How much can I save annually on my electric bill if I add solar panels to my Falls Church home?
After adding solar panels to your Falls Church home, you can expect to save around $895.71 per year, or around $17,018.43 over 20 years.
What are the best solar panel installation companies near me?
To learn about the best solar panel installation companies near you, take a look at our article on Falls Church's best solar panel companies.
When does the federal solar tax credit end?
The Clean Energy Credit (formerly named the federal solar tax credit, or the ITC), is scheduled to end on January 1, 2035. Currently set at 30%, the credit will drop to 26% in 2033 and to 22% in 2034.
Can I receive incentives both towards the initial cost of solar panels, and later as reimbursement?
Yes, you can claim both tax credits and rebates towards the cost of solar panels. Depending on precisely which incentives you are receiving, they may apply in a different order. Make sure that you talk to your solar installer or a local tax professional to ensure that you are claiming the correct incentives and getting the most money possible.
What if I am planning to add solar panels to a vacation home, rental property or commercial property? Can I still qualify for incentives?
Many solar incentives are intended to apply to a property located within the United States that you own, and most secondary residences will fall under this distinction. Other solar incentives may be available for commercial properties, depending on the specifics. We recommend getting in touch with your local solar installer and/or tax professional to fully understand what incentives may 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.