2023 Solar Incentives Guide for Loudoun Valley Estates, VA - Tax Credits & Rebates

What Solar Tax Credits, Incentives, and Rebates are Available in Loudoun Valley Estates?

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

Solar incentives encourage homeowners to make the switch to renewable energy by offering incentives meant to lower the financial burden of solar panel installation and use. Various types of incentives, including cash back, discounts or credit towards your monthly utility bill, may 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:

• Solar Renewable Energy Certificate (SREC): SRECs and similar performance-based incentives may be available to you if your solar system produces more than a specified (typically small) amount of electricity. This category of incentives is normally handled by the state government. You can sell SRECs to your utility company or other buyers, and the money you receive in return is typically considered part of your taxable income.
• Rebates: A rebate is a partial refund given after you've purchased your solar panels. Rebates may be offered by your local utility company, your county or your state. The cash back that you get from the rebates is normally applied before calculating tax credits.
• Tax Exemptions: Sales tax exemptions are effective at the point of sale for your solar system. Property tax exemptions let you ignore the value that your solar panels add when you calculate how much property tax you need to pay.
• Tax Credits: Tax credits are dollar-for-dollar reductions (not deductions) in how much in taxes you owe the federal government.
• Net Metering: You may be able to sign a net metering contract with your Loudoun Valley Estates utility company that will apply to all or a percentage of the excess electricity that is generated by your solar panels. They will then deduct this value from your utility bill each month.

Federal Solar Incentives

When someone says "solar incentives," you probably think of federal incentives first. 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 certain percentage of the cost of your solar system.

The ITC can be applied to the total cost of solar panel installation, including the panels themselves as well as equipment, labor and accessories. You can claim this credit for panels installed after January 1, 2006 on a primary or secondary residence that you own and that 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 claim amount.

Have questions about how the ITC applies to your specific situation? Reach out to your local Loudoun Valley Estates solar panel installer to get more information.

The ITC was renewed and increased in scope after the passage of the Inflation Reduction Act in August 2022. It's also now called the Clean Energy Credit. The Clean Energy Credit runs until 2035. Any solar installation project that is completed between January 1, 2022 and December 31, 2032 may qualify for a 30% tax credit. This amount will then decrease slightly on a yearly basis until the end of the current program. The expansion to the program also makes it easier to get credit for energy storage systems, beginning in 2023.

More information about the new Inflation Reduction Act can be found here. To better understand how the new Clean Energy Credit applies to you, talk to your local Loudoun Valley Estates solar installation expert.

State & Local Solar Incentives

Some solar incentives may be provided at the state and local level. As with federal incentives, these could include tax credits, rebates and more. 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 Loudoun Valley Estates

Nationwide solar energy use has increased enormously in the past 15 years, in part thanks to the increase in availability of solar incentives. You may get these incentives from the federal government, the Virginia government or your local utility company. If you're ready to make the change to solar energy, calling your local Loudoun Valley Estates solar panel installation expert is an excellent place to start.