2023 Solar Incentives Guide for Lynchburg, VA - Tax Credits & Rebates
In this guide, we'll cover the latest solar incentives and rebates available in Lynchburg.
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 Lynchburg?
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
Solar incentives are designed to encourage homeowners to switch their home over to renewable energy by offering incentives that lower the financial burden of solar panel installation and use. You might be eligible for various types of incentives, including discounts, cash back or monthly utility bill credits, depending on your situation. Certain incentives come from your specific utility company, county or municipality, some from the state of Virginia and others from the federal government. Some solar incentives you might qualify for are:
- Net Metering: Net metering factors in after your solar panels are up and running. If you have a net metering agreement with your Lynchburg utility company, it will subtract the value of the excess energy produced by your solar system from your utility bill each month. In some areas, this credit is dollar-for-dollar, while in other places you might make back a percentage of the value.
- Solar Renewable Energy Certificate (SREC): SRECs are credits that can be sold to your utility company (or other buyers) for cash that normally counts as part of your taxable income. In most cases, you must meet a certain (small) threshold of energy production before your solar system can earn SRECs or similar performance-based incentives. These kinds of incentives are normally handled by your state government.
- Rebates: Rebates, or cash back after a purchase, are normally given prior to any solar tax credits being calculated. Solar rebates may be given by your local utility company, by your county or by your state.
- Tax Exemptions: Sales tax exemptions are effective at the point of sale for your solar system. Property tax exemptions let you exclude the value that your solar panels add when calculating the amount of property tax you need to pay.
- Tax Credits: Different from 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 solar incentives are likely the first thing that you think of when you think about solar incentives. The solar incentive that you may be most familiar with is the Federal Solar Investment Tax Credit (ITC), which gives you a credit on your taxes equal to a certain percentage of the cost of your solar system.
The ITC covers solar systems installed after January 1, 2006 and under this program you can deduct from your taxes a percentage of the total cost of solar panels, accessories, labor and equipment. You can receive this credit for solar panels installed on a primary or secondary residence in the United States that you own. Originally, you could claim 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.
Your local Lynchburg solar panel installer can give you more information about the ITC and how it might apply to your situation.
In August 2022, the Inflation Reduction Act made revisions to the ITC, now titled the Clean Energy Credit. The new Clean Energy Credit now runs until 2035. American homeowners can now receive a 30% credit for solar systems that began installation after January 1, 2022 and are completed by the end of 2032. The total credit will then see a slight annual decrease until its expiration. Starting in 2023, the expansion to the program will also make claiming credit for energy storage systems easier than ever before.
Click here to learn more about the new Inflation Reduction Act. Your local Lynchburg solar panel installation expert is the best person to answer your questions about the new Clean Energy Credit and how it will apply to you.
State & Local Solar Incentives
Some solar incentives are often also provided by state and local governments. Like with federal incentives, these could include tax credits, rebates and more. The incentives — which might be handled by your county or municipality, or by the state of Virginia — might be offered for only a limited time, or on an ongoing basis.
Next Steps for Installing Solar in Lynchburg
The variety of available solar incentives has enormously increased the use of solar power nationwide over the last 15 years. You can get solar incentives from your local utility company, the Virginia government or the federal government. Talking to your local Lynchburg solar panel installation company is the right first step towards making sure you get all the incentives you qualify for when you switch to solar energy.
EcoWatch's Lynchburg, 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.