2023 Solar Incentives Guide for Hampton, VA - Tax Credits & Rebates
In this guide, we'll cover the latest solar incentives and rebates available in Hampton.
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 Hampton?
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
Solar incentives are meant to encourage homeowners to switch their home over to renewable energy by offering incentives meant to lower the financial burden of solar panel installation and use. Incentives may include things like discounts, cash back or credit on your utility bill each month. Some incentives are handled federally, while others are provided by the state of Virginia or by your utility company, county or municipality. Some solar incentives you might qualify for are:
- Rebates: Solar rebates might be provided by your state or county, or by your local utility company. These rebates work as cash back that is applied after you purchase a solar system and before tax credits are calculated.
- 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 Hampton utility company, the company will subtract the value of the excess energy produced by your solar system from your utility bill each month. In some areas, this is a dollar-for-dollar credit, while in other areas you may receive a refund equivalent to a percentage of the value.
- Solar Renewable Energy Certificate (SREC): SRECs and other performance-based incentives are normally handled at the state level. Once your solar panel system meets the threshold (typically a small amount of energy production), you are eligible to receive SRECs that can then be sold to your utility company or other buyers. The money you receive from the sale is generally considered part of your taxable income.
- Tax Exemptions: Your solar panels might qualify for both sales tax and property tax exemptions. Sales tax exemptions come into effect at the time of purchase. Property tax exemptions allow you to ignore the value that solar panels add when you are calculating property taxes on your home.
- Tax Credits: Tax credits are dollar-for-dollar reductions in the amount of income tax that you owe the federal government. (This is different from a tax deduction.)
Federal Solar Incentives
When someone says "solar incentives," you probably think of federal incentives first. A federal incentive many people are likely to be familiar with is the Federal Solar Investment Tax Credit (ITC). The ITC is a tax credit for a given percentage of your solar system's cost.
The ITC can be applied to solar panels installed on your primary or secondary residence in the United States. The solar panels must have been installed on a property you own after January 1, 2006 for you to be eligible for the credit. Initially, the ITC applied to 30% of all system costs (panels, labor, accessories and equipment), although the covered amount has fluctuated over the last few years 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 Hampton solar panel installation expert can give you more information about the ITC and how it might apply to your situation.
In August 2022, the Inflation Reduction Act expanded and extended the ITC, now referred to as the Clean Energy Credit. The Clean Energy Credit is valid until 2035. Your solar installation project undertaken between 2022 and 2032 may qualify for a 30% tax credit. This amount will be decreased slightly on a yearly basis until the current program ends. The expansion to the program also makes it easier to get credit for energy storage systems, beginning in 2023.
Click here to learn more about the new Inflation Reduction Act. To better understand how the new Clean Energy Credit might apply to you, talk to your local Hampton solar installation company.
State & Local Solar Incentives
Some solar incentives are often also offered at the local or state level. Similar to federal incentives, these could include tax credits, rebates and more. These incentives — which might be handled by the state of Virginia, or by your county or municipality — may be offered for only a limited time, or on an ongoing basis.
Next Steps for Installing Solar in Hampton
There are a number of different solar incentives: those provided by local utility companies, those provided by the Virginia government and those provided by the federal government, to name a few. The use of solar energy has grown enormously in the last 15 years, thanks to these incentives. We suggest talking to your local Hampton solar installation expert to learn more about these incentives and to be sure that you're getting the largest number possible for your solar panels.
EcoWatch's Hampton, 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.