2024 Solar Incentives Guide for Fredericksburg, VA - Tax Credits & Rebates
In this guide, we'll cover the latest solar incentives and rebates available in Fredericksburg.
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 Fredericksburg?
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/
Solar incentives are intended to make renewable energy usage more affordable through financial incentives to help people install solar panels on their homes. Various kinds of incentives, like discounts, cash back or monthly utility bill credits, may 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 solar incentives you might qualify for are:
- Rebates: Solar rebates can be offered by your local utility company, or by your state or county. These rebates are essentially cash back that is applied after you pay for solar panels and before tax credits are calculated.
- Net Metering: Make sure you talk to your Fredericksburg utility company about signing a net metering agreement. This allows you to get a credit towards your monthly utility bill for the value of excess energy your solar panels generate. You might receive either a dollar-for-dollar credit or a percentage of the value.
- Tax Credits: These credits are dollar-for-dollar reductions (not deductions) in the amount of tax that you owe the federal government.
- Solar Renewable Energy Certificate (SREC): SRECs and other performance-based incentives may be available to you if you have a solar system that produces over a specified (generally small) amount of electricity. These types of incentives are generally handled at the state level. You can sell your SRECs to your utility company or other buyers, and the money you receive in return is normally considered part of your taxable income.
- Tax Exemptions: Tax exemptions may come in two forms. The first is sales tax exemption, which is applied when you purchase solar panels. The second is property tax exemption. This allows you to ignore the added value of your solar system when paying property tax on your house.
Best National Provider
SunPower
- Most efficient panels on the market
- National coverage
- Cradle to Cradle sustainability certification
- Great warranty coverage
- Expensive
- Customer service varies by local dealer
Best Solar Financing
Blue Raven Solar
- Industry-leading in-house financing
- Competitive pricing
- Excellent reputation
- Doesn't offer solar batteries
Best Social Impact
Palmetto Solar
- Expansive service area
- Makes charitable contributions
- Certified B Corp
- No leases or PPAs
- Quality of installation may vary by location
Federal Solar Incentives
Federal solar incentives are likely the first thing that you think of 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 specified 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, labor, equipment and accessories – although it may range from 26-30%, depending on the installation date of your solar system. There is no cap on the claim amount.
Your local Fredericksburg solar panel installer can offer more information about the ITC and how it might apply to your situation.
The Inflation Reduction Act, passed in August 2022, added more provisions to the ITC (as well as retitling it the Clean Energy Credit). The Clean Energy Credit bolsters the current credit, increasing it up to 30% for solar installations undertaken between January 1, 2022, and December 31, 2032. After this, the credit percentage will see a slight decrease annually until the program expires in 2035. Beginning in 2023, it will also be easier to qualify for credits for energy storage systems under this new program.
Click here to learn more about the new Inflation Reduction Act. The best way to learn more about how the new Clean Energy Credit applies to you is to talk with your local Fredericksburg solar panel installers.
State & Local Solar Incentives
Some solar incentives are often also offered at the local or state level. Similar to federal incentives, these can include tax credits, rebates and more. Incentives might be offered by the state of Virginia, or by your county or municipality. Certain incentives might only be available for a limited time, while others are ongoing.
Next Steps for Installing Solar in Fredericksburg
Solar incentives can come from your local utility company, the federal government or the Virginia government. The variety of available solar incentives has facilitated the nationwide growth of solar energy use in the last 15 years. We recommend talking to your local Fredericksburg solar installation expert to learn more about these incentives and to ensure that you're getting all the money you can for your solar system.
EcoWatch's Fredericksburg, VA Solar Incentives FAQs
How do I know if I qualify for certain solar incentives?
It's a smart idea to get in touch with your local Fredericksburg solar installer for a better understanding of which incentives your project will qualify for. Typically, solar incentives apply to new solar panel systems installed on property you own (in the U.S.) between the dates specified by the incentive. Some incentives, such as those provided at the level of the Virginia government, might have other requirements.
I already have solar panels. Are there any incentives that I qualify for?
If your solar panels were installed after January 1, 2022, you may qualify for the recently increased 30% tax credit under the Inflation Reduction Act. If you had your system installed between 2006 and 2021, you may qualify for a tax credit between 26% and 30%, depending on the exact installation date. Reaching out to the company that installed your system, or any local Fredericksburg solar installer, can help you understand what incentives you qualify for.
How long until the federal solar tax credit ends?
The Clean Energy Credit (formerly called the federal solar tax credit, or ITC), currently ends on January 1, 2035. Currently set at 30%, the credit will drop to 26% in 2033 and to 22% in 2034.
Can I qualify for incentives both towards the up-front cost of solar panels, and later as reimbursement?
Yes, you can receive both rebates and tax credits towards the cost of solar panels. Depending on which incentives you are claiming, they may apply in a different order. Be sure to 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.
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.