2023 Solar Incentives Guide for Lake Of The Woods, VA - Tax Credits & Rebates

What Solar Tax Credits, Incentives, and Rebates are Available in Lake Of The Woods?

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

The term "solar incentives" refers broadly to financial incentives put in place by solar companies and the government to encourage increased use of renewable energy by making installing and using solar panels more affordable. Different kinds of incentives, like discounts, cash back or monthly utility bill credits, might be available to you. Some incentives may be offered by the state of Virginia, by your utility company or by county or municipality, while others are federal. Categories of solar incentives include:

• Tax Credits: Tax credits lower, dollar-for-dollar, the amount of income tax you owe the federal government. These are different from tax deductions.
• Solar Renewable Energy Certificate (SREC): In general, solar systems that produce more than a specified (generally small) amount of electricity can qualify for SRECs or other similar performance-based incentives. SRECs and the like are typically given at the state level. When you receive an SREC, you can sell it to your utility company or another buyer, and the money you receive is normally considered part of your taxable income.
• Rebates: A solar rebate is a partial refund after the purchase of your solar panels. 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.
• Net Metering: Net metering is an incentive you can get after your solar system is up and running. If you have a net metering agreement with your Lake Of The Woods utility company, the company will subtract the value of the excess energy produced by your solar system from your monthly utility bill. In some locations, this credit is dollar-for-dollar, while in others you might be refunded a percentage of the value.
• Tax Exemptions: Sales tax exemptions are applied at the time of purchase for your solar system. Property tax exemptions let you exclude the added value of your solar system when calculating how much property tax you need to pay.

Federal Solar Incentives

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

The ITC is applied to the total cost of installing a solar system, including the panels themselves as well as accessories, equipment and labor. You can claim this credit for panels installed after January 1, 2006 on a primary or secondary residence that you own, as long as it is located in the United States. Originally set at 30% of total costs, the credit has fluctuated over time, and you may qualify for different amounts depending on when your project was completed. There is no maximum amount you can claim.

To more fully understand how the ITC might apply to your situation, call your local Lake Of The Woods solar panel installer and request more information.

In August 2022, the ITC (now referred to as the Clean Energy Credit) was expanded and extended by the passage of the Inflation Reduction Act. The Clean Energy Credit has increased the current credit 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 also makes credits for energy storage systems even easier to claim, beginning in 2023.

More information about the new Inflation Reduction Act can be found here. Your local Lake Of The Woods solar panel company can answer any questions you have and explain how the new Clean Energy Credit may apply to you.

State & Local Solar Incentives

Some solar incentives are often also offered at the local or state level. Like with federal incentives, these might include rebates, tax credits and more. Certain 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 Lake Of The Woods

Solar incentives may be provided by the federal government, the Virginia government or your local utility company. The large number of incentives available has facilitated the nationwide growth of solar energy use in the last 15 years. Your local Lake Of The Woods solar panel installer can provide you with more details about which incentives you should apply for, and get you feeling good about making the change to renewable energy today.