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

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

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

Solar incentives are meant to encourage homeowners to switch their home over to renewable energy by providing incentives meant to lower the financial burden of solar panel installation and use. Various types of incentives, including discounts, cash back or monthly utility bill credits, might be available to you. Certain incentives may be offered by the state of Virginia, by your utility company or by county or municipality, while other incentives are federal. Some broad categories of solar incentives include:

• Tax Credits: Tax credits reduce, dollar-for-dollar, the total amount of tax you owe the federal government. These differ from tax deductions.
• Rebates: A rebate is a partial refund after the purchase of your solar system. These might be offered by your local utility company, your county or your state. The rebates are usually applied before calculating tax credits.
• 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, there is a small threshold of energy production to meet before your solar system can earn SRECs or similar performance-based incentives. Incentives like these are generally handled by your state government.
• Tax Exemptions: Tax exemptions may come in one of two forms. First, there is sales tax exemption, applied when you purchase solar panels. The second is property tax exemption. This allows you to ignore the value added by your solar system when calculating property tax for your home.
• Net Metering: Net metering factors in once your solar panels are up and running. If you've signed a net metering agreement with your Idylwood utility company, the company will subtract the value of the excess energy produced by your solar system from your monthly utility bill. In some areas, this credit is dollar-for-dollar, while in other places you might receive a refund equivalent to a percentage of the value.

Federal Solar Incentives

Federal incentives are the type of incentives that you are most likely to have some familiarity with. The solar incentive that you're most familiar with is probably the Federal Solar Investment Tax Credit (ITC), which provides a credit on your taxes equal to a specified percentage of the cost of your solar system.

The ITC initially applied to 30% of the cost of installing a solar system, 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 cost of installation includes the panels themselves as well as the cost of equipment, labor and accessories. There is no maximum amount you can claim. The ITC applies to solar systems installed after January 1, 2006 on your primary or secondary residence. The residence must be in the United States and owned by you.

Speaking with your local Idylwood solar panel installation expert is the best way to understand how the ITC applies to you.

In August 2022, the ITC (now titled the Clean Energy Credit) was expanded and extended by the passing of the Inflation Reduction Act. The Clean Energy Credit has increased the current credit up to 30% for solar installation projects started after January 1, 2022 and completed by the end of 2032. After 2032, the credit percentage will decrease slightly each year until the program expires in 2035. Starting in 2023, the expansion to the program will also make it easier to get credit for energy storage systems.

More information about the new Inflation Reduction Act can be found here. Your local Idylwood 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

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. These incentives might be handled by the Virginia government, or by your county or municipality. Some are ongoing, while others are available for a limited time.

Next Steps for Installing Solar in Idylwood

The expanding number of available solar incentives has helped tremendously increase the use of solar power nationwide over the last 15 years. You might qualify for solar incentives from the Virginia government, the federal government or your local utility company. Your local Idylwood 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.