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

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

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

Solar incentives are designed to make renewable energy usage more affordable through financial incentives to help people install solar panels on their homes. Incentives might include things like discounts, cash back or monthly utility bill credits. Some incentives are handled federally, while others are handled by the Virginia government or your specific utility company, county or municipality. Some broad categories of solar incentives include:

• Solar Renewable Energy Certificate (SREC): SRECs can be sold to your utility company (or other buyers) for money that typically becomes part of your taxable income. Generally, you must meet a certain (small) threshold of energy production before your solar system is eligible for SRECs or similar performance-based incentives. Incentives like these are normally handled at the state level.
• Tax Exemptions: These may come in the form of property tax exemptions, which let you exclude the value added by your solar panels when paying property tax on your home. You may also qualify for an exemption on sales tax at the time of purchase.
• Rebates: A rebate is a partial refund given after you've purchased your solar panels. Rebates might be offered by your local utility company, your county or your state. The cash back that you get from the rebates is normally applied before calculating tax credits.
• Net Metering: Net metering becomes relevant after your solar system is up and running. If you have a net metering agreement in place with your Harrisonburg utility company, they will subtract the value of the excess energy produced by your solar system from your monthly utility bill. In some places, this is a dollar-for-dollar credit, while in other places you may make back a percentage of the value.
• Tax Credits: Tax credits lower, dollar-for-dollar, the total amount of tax you owe the federal government. Tax credits differ from tax deductions.

Federal Solar Incentives

Federal solar incentives are likely to be the first thing that comes to mind when you think about solar incentives. The Federal Solar Investment Tax Credit, or ITC, is the most commonly known federal solar incentive. The ITC allows you to claim a tax credit for a specific percentage of the cost of your solar system.

The ITC can be applied to solar systems installed after January 1, 2006 and under this program you can deduct from your taxes a percentage of the total cost of solar panels, labor, equipment and accessories. You can claim this credit for a solar panel system installed on a primary or secondary residence in the United States that you own. The original claim amount was 30% of the total cost, although certain projects may qualify for only 26%, depending on the details. There is no maximum amount you can claim.

Your local Harrisonburg solar panel installer can provide you with more information about the ITC and how it may apply to your situation.

The Inflation Reduction Act, passed in August 2022, expanded and extended the ITC (as well as retitling it the Clean Energy Credit). The Clean Energy Credit has increased the current credit up to 30% for solar installations undertaken between January 1, 2022 and December 31, 2032. After 2032, the credit percentage will see a slight decrease annually until the end of the program in 2035. Beginning in 2023, it will also be easier to get credits for energy storage systems with the new act.

More information about the new Inflation Reduction Act can be found here. Your local Harrisonburg solar panel installer can answer any questions you have and explain how the new Clean Energy Credit may apply to you.

State & Local Solar Incentives

Some solar incentives are often also provided by state and local governments. Similar to federal incentives, these can include rebates, tax credits 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 Harrisonburg

You can qualify for solar incentives from the Virginia government and the federal government, as well as from your local utility company. Growing availability of solar initiatives in the past 15 years has helped greatly increase nationwide adoption of solar energy. Speaking with your local Harrisonburg solar panel installation company is a great first step towards getting the most money possible when you switch to solar energy.