2023 Solar Incentives Guide for Franconia, VA - Tax Credits & Rebates
In this guide, we'll cover the latest solar incentives and rebates available in Franconia.
You'll learn about:
- Local & State Solar Incentives
- Federal Tax Credits (Updated for 2023 and beyond)
- Ways to optimize your solar investment
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What Solar Tax Credits, Incentives, and Rebates are Available in Franconia?
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 term "solar incentives" refers to financial incentives designed to encourage the adoption and use renewable energy by making installing and using solar panels more affordable. Different types of incentives, including cash back, discounts or credit towards your monthly utility bill, might be available to you. Some incentives may be provided via the state of Virginia, by your utility company or by county or municipality, while others are federal. Types of solar incentives might include:
- Tax Credits: Tax credits are dollar-for-dollar reductions (not deductions) in the amount of tax that you owe the federal government.
- Rebates: Some solar companies will help you claim a rebate, or partial refund of your purchase, for your solar system. States or counties will also sometimes offer limited-time rebates. If you receive a rebate, that amount will usually come off your total price before any tax credits are calculated.
- Tax Exemptions: These could come in the form of property tax exemptions, which can let you ignore the value of your solar system when calculating the taxes you pay on your house. They may also include exemptions on sales tax at the time of purchase.
- Solar Renewable Energy Certificate (SREC): In general, solar systems that produce over a threshold (normally small) amount of electricity will qualify for SRECs or other similar performance-based incentives. SRECs and the like are typically provided 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: Net metering is an incentive you can get once your solar panels are up and running. If you've signed a net metering agreement with your Franconia utility company, the company 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 receive a refund equivalent to a percentage of the value.
Federal Solar Incentives
Federal incentives are the type of incentives that you are most likely to have heard of. The Federal Solar Investment Tax Credit, or ITC, is probably the most commonly known federal solar incentive. The ITC provides you with a tax credit for a set percentage of the cost of your solar system.
The ITC initially applied to 30% of the cost of installing solar panels, 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 cost of installation 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 systems installed after January 1, 2006 on your primary or secondary residence. The residence must be owned by you and in the United States.
Speaking with your local Franconia solar panel installer is the best way to understand how the ITC applies to your situation.
The ITC has been renewed and expanded following the passage of the Inflation Reduction Act in August 2022. It's also now called the Clean Energy Credit. For solar system installations that begin after January 1, 2022 and are completed by the end of 2032, homeowners may be eligible for a credit equal to 30% of the total cost. After 2033, the percentage will decrease annually until the Clean Energy Credit ends in 2035. The expansion also makes credits for energy storage systems even easier to claim, beginning in 2023.
More information about the new Inflation Reduction Act can be found here. The best way to understand how the new Clean Energy Credit will apply to you is to reach out to your local Franconia solar panel installation expert with your questions.
State & Local Solar Incentives
Some solar incentives are often also provided by state and local governments. As with federal incentives, these can include tax credits, rebates and more. These solar incentives — which might be handled 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 Franconia
Nationwide solar energy use has gone up tremendously in the last 15 years, in part thanks to the increase in availability of solar incentives. You may get these incentives from your local utility company, the Virginia government or the federal government. We suggest talking to your local Franconia solar installation expert to learn more about these incentives and to make sure that you're getting all of the money you can for your solar system.
EcoWatch's Franconia, VA Solar Incentives FAQs
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.