2023 Solar Incentives Guide for Leesburg, VA - Tax Credits & Rebates
In this guide, we'll cover the latest solar incentives and rebates available in Leesburg.
You'll learn about:
- Local & State Solar Incentives
- Federal Tax Credits (Updated for 2023 and beyond)
- Ways to optimize your solar investment
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What Solar Tax Credits, Incentives, and Rebates are Available in Leesburg?
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
The phrase "solar incentives" generally refers to financial incentives that are in place to encourage increased use of renewable energy by making solar panels more affordable. Different kinds of incentives, such as cash back, discounts or credit towards your monthly utility bill, might be available to you. Some incentives may be handled by the Virginia government, by your utility company or by county or municipality, while others are federal. Categories of solar incentives include:
- Solar Renewable Energy Certificate (SREC): SRECs are credits that can be sold to your utility company (or other buyers) for cash that is generally considered part of your taxable income. In most cases, a certain (small) threshold of energy production must be met before your solar system can earn SRECs or similar performance-based incentives. SRECs and similar incentives are typically handled by your state government.
- Tax Exemptions: These may come in the form of property tax exemptions, which allow you to exclude the value of your solar system when calculating the taxes you pay on your home. You may also qualify for an exemption on sales tax at the time of purchase.
- Tax Credits: Tax credits lower, dollar-for-dollar, the total amount of tax you owe the government. Tax credits are different from tax deductions.
- Net Metering: Net metering is an incentive you can get once your solar system is up and running. If you have a net metering agreement in place with your Leesburg utility company, they will subtract the value of the excess energy your solar system produces from your utility bill each month. 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.
- Rebates: Some solar companies will help you claim a rebate, or partial refund of your purchase, for your solar panels. Counties or states will also sometimes offer limited-time rebates. If you receive a rebate, that amount will usually be deducted from the total price before tax credits are calculated.
Federal Solar Incentives
When you hear the term "solar incentives," federal incentives may be the first thing that comes to mind. It's likely that you've heard of the Federal Solar Investment Tax Credit, or ITC. This incentive is a tax credit equal to a predetermined percentage of the money you spend installing solar panels.
The ITC applies to solar systems installed after January 1, 2006 on a primary or secondary residence in the United States that you own. Initially, the credit applied to 30% of the total cost — for panels, labor, accessories and equipment — although that amount may range from 26-30%, depending on the installation date of your solar system. There is no cap on the claim amount.
Wondering how the ITC applies to your specific situation? Reach out to your local Leesburg solar panel installation expert to get more information.
The Inflation Reduction Act, passed in August 2022, made some changes to the ITC (as well as renaming it to the Clean Energy Credit). For solar system installations that begin after January 1, 2022 and are completed by the end of 2032, homeowners can apply for a credit equal to 30% of the total cost. After 2033, the percentage will decrease annually until the Clean Energy Credit expires in 2035. Beginning in 2023, it will also be easier to get credits for energy storage systems with the new act.
More information about the new Inflation Reduction Act can be found here. Your local Leesburg solar panel installers are the best people to answer your questions regarding the new Clean Energy Credit and how it may apply to you.
State & Local Solar Incentives
There are often state solar incentives available in addition to federal ones. Tax credits, rebates and more may be available at a more local level. Some incentives are offered for only a limited time, while others are ongoing. These local incentives may come from the Virginia government, or from your specific county or municipality.
Next Steps for Installing Solar in Leesburg
You can receive solar incentives from the federal government and the Virginia government, as well as from your local utility company. This increase in availability of solar initiatives over the last 15 years has helped increase solar adoption nationwide. Reaching out to your local Leesburg solar panel installation company is an excellent first step towards getting all the incentives you qualify for when you switch to solar energy.
EcoWatch's Leesburg, VA Solar Incentives FAQs
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.