2023 Solar Incentives Guide for Herndon, VA - Tax Credits & Rebates
In this guide, we'll cover the latest solar incentives and rebates available in Herndon.
You'll learn about:
- Local & State Solar Incentives
- Federal Tax Credits (Updated for 2023 and beyond)
- Ways to optimize your solar investment
Solar installers are experts in maximizing your solar tax credits and rebates.
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Updated September 15, 2023
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What Solar Tax Credits, Incentives, and Rebates are Available in Herndon?
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 encourage homeowners to switch their home over to renewable energy by offering financial incentives that lower the burden of solar panel installation and use. Incentives can include things like discounts, cash back or credit towards your monthly utility bill. Some incentives are handled federally, while others are provided by the Virginia government or by your utility company, county or municipality. Categories of solar incentives include:
- Tax Credits: Tax 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 are generally handled at the state level. Once your solar panel system meets the threshold (usually 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 make is generally considered part of your taxable income.
- Net Metering: Be sure to talk to your Herndon utility company about signing a net metering agreement. This will allow you to receive credit towards your monthly utility bill for the value of excess energy your solar panels generate. You could receive either a dollar-for-dollar credit or a percentage of the value.
- Tax Exemptions: Your solar panel system may qualify for exemptions on both sales and property tax. Sales tax exemptions come into effect at the time of purchase. Property tax exemptions allow you to ignore the value added by your solar panels when calculating property taxes on your house.
- Rebates: A rebate is a partial refund after the purchase of your solar panels. These might be offered by your local utility company, your state or your county. The discount that rebates offer is normally applied to the price of solar panels before calculating tax credits.
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Federal Solar Incentives
Federal incentives are the type of incentives that you are most likely to have some knowledge of. An incentive that most people are probably familiar with is the Federal Solar Investment Tax Credit (ITC). The ITC is a tax credit for a specific percentage of the cost of your solar system.
The ITC was originally for 30% of the total cost of solar panel installation, although that number has fluctuated slightly over the last few years between 26-30%. The percentage you qualify for will depend on when your solar system was installed. The total installation cost includes the panels themselves as well as the cost of equipment, accessories and labor. There is no maximum claim amount. The ITC applies to solar panels installed after January 1, 2006 on your primary or secondary residence. The residence must be in the United States and owned by you.
To understand exactly how much money the ITC could save you, contact your local Herndon solar panel installation expert.
The Inflation Reduction Act, passed in August 2022, made some changes 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 percentage will see a slight decrease annually until the end of the program in 2035. The expansion to the program also makes credits for energy storage systems even easier to claim, starting in 2023.
More information about the new Inflation Reduction Act can be found here. The best way to fully understand how the new Clean Energy Credit might apply to you is to speak with your local Herndon solar panel company directly.
State & Local Solar Incentives
Tax credits, rebates and more can be provided at multiple levels. Along with federal solar incentives, there are often state and local ones, too. Some incentives are ongoing, while others are offered for only a limited time. Your local solar incentives could come from your county or municipality, or from the Virginia government.
Next Steps for Installing Solar in Herndon
The variety of available solar incentives has helped tremendously increase the adoption of solar energy nationwide over the last 15 years. You might qualify for solar incentives from your local utility company, the federal government or the Virginia government. Reaching out to your local Herndon solar panel installation company is the right first step towards getting the most money possible when you switch to solar energy.
EcoWatch's Herndon, VA Solar Incentives FAQs
I already have solar panels. Does my system qualify for any incentives?
If your solar panels were installed after January 1, 2022, you may qualify for the newly increased 30% tax credit under the Inflation Reduction Act. If you installed your system between 2006 and 2021, you may qualify for a tax credit between 26% and 30%, depending on the exact installation date. Talking to the company that installed your solar system, or any local Herndon solar installer, can help you learn what incentives you qualify for.
How much will solar panels save me annually on my electric bill in Herndon?
On average, Herndon homeowners who install solar panels save approximately $894.56 per year, or approximately $16,996.64 over 20 years after making the switch.
What are the environmental benefits of switching to solar energy?
You can lower your carbon footprint by 300 pounds of CO2 a year when you switch to solar panels. This adds up to approximately 6,000 pounds in 20 years. Solar is also a renewable energy source, meaning that switching your home over lessens the drain on our planet's resources.
Can I apply for incentives both towards the up-front cost of solar panels, and later as reimbursement?
Yes, you can claim both tax credits and rebates towards the cost of solar panels. Depending on which incentives you are claiming, they may apply in a different order. Be sure to speak with your solar installer or a local tax professional to confirm that you are claiming incentives correctly and getting the most money you can.
Can I use both solar and another type of renewable energy to power my home?
Yes, you can use multiple types of renewable energy to power your home, such as a combination of geothermal and solar. You can also combine renewable energy generation with a backup source of non-renewable energy. You should discuss the details of your plan with your local Herndon solar panel installer, to get an understanding of what will be needed and what kinds of incentives you may or may not qualify for.
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.