2025 Solar Incentives Guide for Lorton, VA - Tax Credits & Rebates

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

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

The phrase "solar incentives" broadly refers to financial incentives designed to encourage increased use of renewable energy by making installing and using solar panels more affordable. Various types of incentives, including discounts, cash back or credit towards your monthly utility bill, may be available to you. Some incentives may be provided via the Virginia government, by your utility company or by county or municipality, while others are federal. Some solar incentives you might qualify for are:

• Tax Exemptions: Tax exemptions may come in two forms. First, there is sales tax exemption, applied when you purchase solar panels. The second is property tax exemption, which allows you to exclude the added value of your solar system when calculating property tax for your home.
• Net Metering: Don't forget to speak with your Lorton utility company about signing a net metering contract. This allows you to receive credit towards your utility bill every month for the value of excess energy generated by your solar panels. You may receive either a dollar-for-dollar credit or a percentage of the value.
• Rebates: Some solar companies will help you claim a rebate, or partial refund after purchase, for your solar system. States or counties will also offer limited-time rebates at various times. If you receive a rebate, that amount will usually be deducted from the total price before any tax credits are calculated.
• Solar Renewable Energy Certificate (SREC): SRECs are credits that can be sold to your utility company (or other buyers) for money that typically becomes part of your taxable income. Typically, a certain (small) threshold of energy production must be met before your solar system can earn SRECs or other performance-based incentives. These kinds of incentives are normally handled by your state government.
• Tax Credits: Unlike tax deductions, tax credits are dollar-for-dollar reductions in the amount of income tax that you owe the federal government.

Federal Solar Incentives

Federal incentives are the kind of incentives that you are most likely to have some knowledge of. The solar incentive that you may be most familiar with is the Federal Solar Investment Tax Credit (ITC), which provides a credit on your taxes equal to a predetermined percentage of your solar system's cost.

The ITC can be applied to solar systems installed after January 1, 2006, and allows you to deduct from your taxes a percentage of the total cost of solar panels, labor, equipment and accessories. This credit can be claimed on a solar panel system installed on a primary or secondary residence that you own in the United States. The original claim amount was 30% of the total cost, although certain projects may qualify for only 26%, depending on the details. There is no maximum amount you can claim.

Wondering how the ITC applies to your specific situation? Reach out to your local Lorton solar panel installer 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). The Clean Energy Credit re-raises the credit up to 30% for solar installations undertaken between January 1, 2022, and December 31, 2032. At this point, the credit percentage will be reduced slightly each year until the end of the program in 2035. Beginning in 2023, it will also be easier to obtain credits for energy storage systems under this new program.

More information about the new Inflation Reduction Act can be found here. The best way to learn more about how the new Clean Energy Credit might apply to you is to get in touch with your local Lorton solar panel installers.

State & Local Solar Incentives

Tax credits, rebates and more might be claimed at multiple levels. In addition to federal solar incentives, there are often state and local ones, too. Certain incentives are ongoing, while others are offered for only a limited time. Local solar incentives may come from the Virginia government, or from your specific county or municipality.

Next Steps for Installing Solar in Lorton

There are many types of solar incentives: those offered by local utility companies, those provided by the Virginia government and those offered by the federal government, to name a few. Solar energy use has increased enormously in the last 15 years, thanks to these incentives. We suggest talking to your local Lorton solar installer for more information about these incentives and to ensure that you're getting all the money you can for your solar system.