2024 Solar Incentives Guide for Franklin Farm, VA - Tax Credits & Rebates

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

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

Solar incentives help mitigate the cost of installing a solar panel system on your home. This category of financial incentives is intended to encourage more homeowners to make the switch to renewable energy. Various kinds of incentives, such as discounts, cash back or credit towards your monthly utility bill, might be available to you. Some incentives may be offered by the Virginia government, by your utility company or by county or municipality, while others are federal. Some broad categories of solar incentives include:

• Rebates: Rebates, or cash back after a purchase, are usually applied before any solar tax credits are calculated. These rebates might be provided by your local utility company, by your county or by your state.
• Tax Credits: Different from tax deductions, tax credits reduce, dollar-for-dollar, the amount of income tax that you owe the federal government.
• Tax Exemptions: Tax exemptions can come in one of two forms. First, there is sales tax exemption, applied when you purchase solar panels. The second is property tax exemption, which allows you to exclude the added value of your solar system when paying property tax on your home.
• Net Metering: Net metering factors in after your solar system is up and running. If you have a net metering agreement in place with your Franklin Farm utility company, they will subtract the value of the excess energy your solar system produces from your utility bill each month. In some locations, this is a dollar-for-dollar credit, while in other areas you might be refunded a percentage of the value.
• Solar Renewable Energy Certificate (SREC): Generally, solar systems that produce over a specific (normally small) amount of electricity will qualify for SRECs or other performance-based incentives. SRECs and similar incentives are typically provided at the state level. You can sell SRECs to your utility company or another buyer, and this is usually considered part of your taxable income.

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Federal Solar Incentives

Federal solar incentives are probably the first thing that comes to mind when thinking about solar incentives. You've likely heard of the Federal Solar Investment Tax Credit, or ITC. The ITC is a tax credit that reduces your taxes by a predetermined percentage of the money you spend on your solar system.

The ITC is applied to the total cost of solar system installation, including the panels themselves as well as accessories, labor and equipment. This credit can be claimed for panels installed after January 1, 2006, on a primary or secondary residence that you own, as long as it is located in the United States. From its original value of 30% of the total cost, the credit has fluctuated slightly between 26-30%, and you may qualify for varying percentages depending on when your project was completed. There is no maximum amount you can claim.

To better understand how the ITC will apply to your situation, call your local Franklin Farm solar panel installation expert and request more information.

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. Under the new program, solar installation projects started after January 1, 2022, and completed by the end of 2032, may be eligible for a 30% tax credit. This credit amount will then see a slight annual decrease until the end of the current Clean Energy Credit in 2035. Starting in 2023, the expansion to the program will also make it easier to get credit for energy storage systems.

Click here to learn more about the new Inflation Reduction Act. To fully understand how the new Clean Energy Credit might apply to you, speak with your local Franklin Farm solar installation company.

State & Local Solar Incentives

In addition to those provided at the federal level, there are often also state solar incentives. Tax credits, rebates and more might be available at a more local level. Some incentives are ongoing, while others may only be available for a limited time. Incentives might be offered by the Virginia government, or by your county or municipality.

Next Steps for Installing Solar in Franklin Farm

There are a variety of solar incentives: those given by local utility companies, those provided by the Virginia government and those given by the federal government, to name a few. The use of solar energy has grown tremendously in the last 15 years, partially thanks to these incentives. Call your local solar panel installation expert today to learn more and to save the most money possible on a solar system for your Franklin Farm home.