2023 Solar Incentives Guide for Hopewell, VA - Tax Credits & Rebates
In this guide, we'll cover the latest solar incentives and rebates available in Hopewell.
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 Hopewell?
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/
The term "solar incentives" broadly refers to financial incentives that are in place to encourage people to use renewable energy by making the installation and use of solar panels more affordable. Incentives may include things like discounts, cash back or credit towards your monthly utility bill. Some incentives are offered federally, while others are handled by the state of Virginia or by your utility company, county or municipality. Some broad categories of solar incentives include:
- Tax Exemptions: Tax exemptions can come in two forms. The first is sales tax exemption, applied at the time you purchase your solar panels. The second is property tax exemption, which allows you to ignore the value added by your solar system when paying property tax on your house.
- Net Metering: Net metering is an incentive you can get after your solar panels are up and running. If you have a net metering agreement with your Hopewell 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 locations, this credit is dollar-for-dollar, while in other areas you may be refunded a percentage of the value.
- Tax Credits: Tax credits are dollar-for-dollar reductions that lower the amount of income tax you owe the federal government. (A tax credit is different from a tax deduction.)
- Rebates: A solar rebate is a partial refund after the purchase of your solar system. These may be offered by your local utility company, your state or your county. The cash back that you get from the rebates is normally applied before tax credits are calculated.
- Solar Renewable Energy Certificate (SREC): SRECs can be sold to your utility company (or other buyers) for money that normally counts as part of your taxable income. Generally, a certain (small) threshold of energy production must be met before your solar system is eligible for SRECs or similar performance-based incentives. SRECs and similar incentives are typically handled at the state level.
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Federal Solar Incentives
When you think about solar incentives, you likely think of federal incentives first. One of the incentives many people are likely to be familiar with is the Federal Solar Investment Tax Credit (ITC). The ITC is a tax credit for a predetermined percentage of the cost of your solar system.
The ITC applies to solar panels installed after January 1, 2006 on a primary or secondary residence that you own in the United States. Initially, the credit applied to 30% of the total cost — for panels, labor, equipment and accessories — although that amount may range from 26-30%, depending on when your solar system was installed. There is no cap on the claim amount.
Wondering how the ITC applies to your specific situation? Get in touch with your local Hopewell solar panel installer to get more information.
In August 2022, the Inflation Reduction Act expanded and extended the ITC, now referred to as the Clean Energy Credit. The new Clean Energy Credit now runs until 2035. American homeowners can now apply for a 30% credit for solar systems installed between 2022 and 2032. The credit will then decrease annually until the date of expiration. 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. Your local Hopewell solar panel installers are the best people to answer your questions about the new Clean Energy Credit and how it may apply to you.
State & Local Solar Incentives
In addition to federal solar incentives, there are often also state ones. Tax credits, rebates and more can be offered at a more local level. Incentives might be offered by the state of Virginia, or by your county or municipality. Some incentives are available for only a limited time, while others are ongoing.
Next Steps for Installing Solar in Hopewell
The nationwide use of solar energy has increased enormously in the last 15 years, in part thanks to the growth in the number of solar incentives. You can obtain these incentives from the federal government, the Virginia government or your local utility company. Reaching out to your local Hopewell solar panel installer is the right first step towards getting the most money possible when you switch to solar energy.
EcoWatch's Hopewell, VA Solar Incentives FAQs
If I already have solar panels, can I still claim incentives?
If your solar system was installed after January 1, 2022, you may qualify for the newly increased 30% tax credit under the Inflation Reduction Act. If you had your system installed between 2006 and 2021, you might qualify for a tax credit between 26% and 30%, depending on the year it was installed. Speaking with a representative from the company that installed your solar system, or any local Hopewell solar installer, can help you understand what incentives you can apply for.
How much will a solar system save me on my electric bill in Hopewell annually?
When you add solar panels to your Hopewell home, you can expect to save approximately $928.65 per year, or approximately $17,644.36 over the next 20 years.
What are the environmental benefits of switching to solar?
You can lower your carbon footprint by 300 pounds of CO2 a year when you install solar panels. This adds up to around 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.
When does the federal solar tax credit end?
The federal solar tax credit, previously called the ITC and now named the Clean Energy Credit, is scheduled to end on January 1, 2035. The current 30% credit will end in 2032, replaced by a 26% credit in 2033 and a 22% credit in 2034.
Can I apply for incentives both towards the up-front cost of solar panels, and later as reimbursement?
Yes, you can claim both rebates and tax credits towards the cost of solar panels. Depending on precisely which incentives you are eligible for, they may apply in a different order. Make sure that you talk to your solar installer or a local tax professional to confirm that you are claiming incentives correctly and getting the most money you can.
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.