2025 Solar Incentives Guide for Highland Springs, VA - Tax Credits & Rebates

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

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

The term "solar incentives" refers broadly to financial incentives that are in place to encourage people to use renewable energy by making solar panels more affordable. Incentives may include things like discounts, cash back or monthly utility bill credits. Some incentives are offered federally, while others are handled by the state of Virginia or your utility company, county or municipality. Some broad categories of solar incentives include:

• Tax Credits: Tax credits are dollar-for-dollar reductions that lower the amount of income tax you owe the government. (This is different from a tax deduction.)
• Rebates: A rebate is a partial refund given after you've purchased your solar panels. These could be offered by your local utility company, your county or your state. The discount that rebates offer is normally applied to the price of solar panels before calculating tax credits.
• Net Metering: Net metering factors in after your solar system is up and running. If you've signed a net metering agreement with your Highland Springs utility company, they will subtract the value of the excess energy produced by your solar system from your utility bill each month. In some areas, this credit is dollar-for-dollar, while in other places you may receive a refund equivalent to a percentage of the value.
• Tax Exemptions: These may come in the form of property tax exemptions, which can let you ignore the value of your solar system when paying property tax on your house. You may also qualify for an exemption on sales tax at the time of purchase.
• Solar Renewable Energy Certificate (SREC): SRECs and other performance-based incentives may be available to you if you have a solar system that produces more than a specified (usually small) amount of electricity. Performance-based incentives are generally handled by the state government. You can sell any SRECs you have to your utility company or other buyers, and the money you receive in return is generally considered part of your taxable income.

Federal Solar Incentives

When thinking about solar incentives, federal incentives may be the first thing that comes to mind. You might have heard of the Federal Solar Investment Tax Credit, or ITC. This is a tax credit that reduces your taxes by a certain percentage of the money you spend on your solar system.

The ITC applies towards 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, accessories, labor and equipment. You can claim this credit for solar panels installed on a primary or secondary residence that you own in the United States. The original claim amount was 30% of the total cost, although the amount you can claim may range between 26-30%. There is no maximum claim amount.

Curious how the ITC might apply to your specific situation? Get in touch with your local Highland Springs solar panel installation expert to get more information.

The ITC has been renewed and expanded following the passage of the Inflation Reduction Act in August 2022. It's also now called the Clean Energy Credit. The Clean Energy Credit runs until 2035. Solar installation projects started after January 1, 2022, and completed by the end of 2032 may qualify for a 30% tax credit; this amount will then decrease slightly on a yearly basis until the current program ends. The expansion also makes claiming credit for energy storage systems easier than ever before, starting in 2023.

More information about the new Inflation Reduction Act can be found here. The easiest way to learn more about how the new Clean Energy Credit will apply to you is to reach out to your local Highland Springs solar panel company with your questions.

State & Local Solar Incentives

Rebates, tax credits and more might be provided at multiple levels. In addition to federal solar incentives, there are often state and local ones, too. Some incentives are ongoing, while others might only be available for a limited time. Incentives may be given by the Virginia government, or by your county or municipality.

Next Steps for Installing Solar in Highland Springs

Solar incentives might come from the Virginia government, the federal government or your local utility company. The growing number of incentives available has helped nationwide use of solar energy increase greatly in the last 15 years. Your local Highland Springs solar panel installation company can give you more information about which incentives you can apply for, and get you on track to switch to renewable energy today.