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

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

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

Solar incentives are meant to help mitigate the cost of installing solar panels on your home. Financial incentives like these are designed to encourage more Americans to switch their home over to renewable energy. Incentives may include things like discounts, cash back or monthly utility bill credits. Some incentives are handled federally, while others are provided by the state of Virginia or your specific utility company, county or municipality. You might qualify for any of the following types of solar incentives:

• Solar Renewable Energy Certificate (SREC): Typically, solar systems that produce over a threshold (normally small) amount of electricity qualify for SRECs or similar performance-based incentives. SRECs and performance-based incentives in general are typically offered by your state government. When you receive an SREC, you can sell it to your utility company or another buyer, and the money you receive is normally considered part of your taxable income.
• Rebates: Rebates, or cash back after a purchase, are usually applied prior to any solar tax credits being calculated. Rebates can be given by your local utility company, by your state or by your county.
• Net Metering: You may be able to sign a net metering contract with your Franconia utility company that will apply to all or a percentage of the excess electricity your solar panels generate. Your utility company will then deduct this value from your monthly utility bill.
• Tax Exemptions: Tax exemptions can come in two forms. The first is sales tax exemption, applied at the time you purchase your solar panels. The second is property tax exemption. This allows you to exclude the value added by your solar system when calculating property tax for your house.
• Tax Credits: Tax credits are dollar-for-dollar reductions that lower the amount of income tax you owe the government. (This is different from a tax deduction.)

Federal Solar Incentives

When you hear the term "solar incentives," federal incentives might be the first thing that comes to mind. The solar incentive that you may be most familiar with is the Federal Solar Investment Tax Credit (ITC), which provides a credit on your taxes equal to a 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 panels must have been installed after January 1, 2006 on a property you own for you to be eligible for the credit. Initially, the ITC applied to 30% of all system costs (panels, equipment, accessories and labor), although the covered amount has fluctuated over time between 26-30%. The installation date of your solar system will determine what percentage you are eligible for. There is no cap on the amount you can claim.

Your local Franconia solar panel installer can offer more information about the ITC and how it may apply to your situation.

In August 2022, the ITC (now titled the Clean Energy Credit) was bolstered by the passing of the Inflation Reduction Act. The Clean Energy Credit is valid until 2035. Any solar installation project that is completed between January 1, 2022 and December 31, 2032 may qualify for a 30% tax credit. The amount will then decrease slightly each year until the end of the current program. Starting in 2023, it will also be easier to obtain credits for energy storage systems under the new laws.

More information about the new Inflation Reduction Act can be found here. The best way to fully understand how the new Clean Energy Credit applies to you is to get in touch with your local Franconia solar panel installation expert.

State & Local Solar Incentives

Some solar incentives are often also provided at the state and local level. Similar to federal incentives, these may include tax credits, rebates and more. These incentives may be handled by the Virginia government, or by your county or municipality. Some incentives may be available for a limited time, while others are ongoing.

Next Steps for Installing Solar in Franconia

You can apply for solar incentives from the federal government and the Virginia government, as well as from your local utility company. Growing availability of solar initiatives in the past 15 years has helped increase nationwide solar energy use enormously. When you're ready to make the switch to solar energy, talking to your local Franconia solar panel installation expert is an excellent place to start.