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

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

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

Solar incentives encourage homeowners to switch to renewable energy by providing financial incentives that lower the burden of solar panel installation and use. Incentives may include things like discounts, cash back or credit towards your monthly utility bill. Some incentives are offered by the federal government, while others are handled by the state of Virginia or your specific utility company, county or municipality. Some broad categories of solar incentives include:

• Tax Exemptions: Tax exemptions may come in 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 exclude the added value of your solar system when calculating property tax for your home.
• Solar Renewable Energy Certificate (SREC): SRECs and similar performance-based incentives might be available to you if your solar system produces over a specified (usually small) amount of electricity. These types of incentives are generally handled at the state level. You can sell your SRECs to your utility company or other buyers, and the money you receive in return is typically considered part of your taxable income.
• Net Metering: Don't forget to talk with your Hopewell utility company about signing a net metering agreement. This allows you to get a credit towards your monthly utility bill for the value of excess energy generated by your solar panels. You might receive either a dollar-for-dollar credit or a percentage of the value.
• 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.)
• Rebates: Solar companies may help you claim a rebate, or partial refund after purchase, for your solar system. Counties or states will also offer limited-time rebates at various times. If you receive a rebate, that amount will usually come off your total price before tax credits are calculated.

Federal Solar Incentives

When someone says "solar incentives," you likely think of federal incentives first. A federal incentive many people are likely to be familiar with is the Federal Solar Investment Tax Credit (ITC). This incentive is a tax credit for a predetermined percentage of your solar system's cost.

The ITC can be applied to solar systems installed after January 1, 2006 and lets you deduct from your taxes a percentage of the total cost of solar panels, equipment, labor and accessories. You can receive this credit for a solar panel system 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 the amount you can claim may range between 26-30%. There is no maximum amount you can claim.

Curious how the ITC might apply to your specific situation? Get in touch with your local Hopewell solar panel installer 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. Under the new program, solar installation projects begun after January 1, 2022 and finished by December 31, 2032 may be eligible for a 30% tax credit. This percentage will then see a slight annual decrease until the current Clean Energy Credit expires in 2035. Beginning 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. To fully understand how the new Clean Energy Credit will apply to you, talk to your local Hopewell 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 can include rebates, tax credits and more. Some incentives are ongoing, while others are offered for only a limited time. Your local incentives might come from the Virginia government, or from your specific county or municipality.

Next Steps for Installing Solar in Hopewell

Solar energy use nationwide has significantly increased in the last 15 years, in part thanks to the proliferation of solar incentives. You may get these incentives from your local utility company, the Virginia government or the federal government. Reach out to your local solar panel installation company today to find out more information and to save the most money possible on solar panels for your Hopewell home.