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

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

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

The phrase "solar incentives" refers to financial incentives put in place by solar companies and the government to encourage people to use renewable energy by making solar panels more affordable. Different types of incentives, including discounts, cash back or credit towards your monthly utility bill, might be available to you. Certain incentives may be handled by the state of Virginia, by your utility company or by county or municipality, while other incentives are federal. Types of solar incentives might include:

• Tax Credits: Unlike tax deductions, tax credits are dollar-for-dollar reductions in the amount of income tax that you owe the government.
• Net Metering: Net metering becomes relevant once your solar system is up and running. If you have a net metering agreement with your Gloucester Point utility company, it will subtract the value of the excess energy your solar system produces from your utility bill each month. In some locations, this credit is dollar-for-dollar, while in other areas you might receive a refund equivalent to a percentage of the value.
• Solar Renewable Energy Certificate (SREC): SRECs are credits that can be sold to your utility company (or other buyers) for cash that is generally considered part of your taxable income. In most cases, there is a small threshold of energy production to meet before your solar system is eligible for SRECs or other performance-based incentives. Incentives like these are typically handled at the state level.
• Rebates: Some solar companies will help you claim a rebate, or partial refund of your purchase, for your solar panels. States or counties will also sometimes offer limited-time rebates. If you receive a rebate, that amount will usually come off the total price before tax credits are calculated.
• Tax Exemptions: Tax exemptions may come in one of two forms. First, there is sales tax exemption, applied at the time you purchase your solar panels. The second is property tax exemption. This allows you to ignore the added value of your solar system when calculating property tax for your home.

Federal Solar Incentives

Federal solar incentives are likely to be the first thing that you think of when thinking about solar incentives. The Federal Solar Investment Tax Credit, or ITC, is probably the best-known federal solar incentive. The ITC allows you to claim a tax credit for a predetermined percentage of your solar system's cost.

The ITC applies towards solar systems installed after January 1, 2006 and allows you to deduct from your taxes a percentage of the total cost of solar panels, labor, equipment and accessories. You can claim this credit for solar panels installed on a primary or secondary residence in the United States that you own. The original amount you could claim was 30% of the total cost, although depending on when the project was completed, your credit may range from 26-30%. There is no maximum amount you can claim.

Your local Gloucester Point solar panel installation expert can provide more information about the ITC and how it might apply to your situation.

In August 2022, the ITC (now referred to as the Clean Energy Credit) was bolstered by the passage of the Inflation Reduction Act. The new Clean Energy Credit extends until 2035. Homeowners can now apply for a 30% credit for solar systems that began installation after January 1, 2022 and are completed by the end of 2032. This credit will then see a slight annual decrease until its expiration. Starting in 2023, it will also be easier to get credits for energy storage systems under the new laws.

More information about the new Inflation Reduction Act can be found here. Your local Gloucester Point solar panel company can answer your questions and explain how the new Clean Energy Credit applies to you.

State & Local Solar Incentives

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

Next Steps for Installing Solar in Gloucester Point

There are many types of solar incentives: those offered by local utility companies, those offered by the Virginia government and those offered by the federal government, to name a few. The use of solar energy has grown tremendously in the last 15 years, partially due to these incentives. It is a good idea to talk to your local Gloucester Point solar installer to learn more about these incentives and to be sure that you're getting the largest number possible for your solar system.