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

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

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

The phrase "solar incentives" refers to financial incentives put in place by solar companies and the government to encourage increased use of renewable energy by making solar panels more affordable. You may be eligible for several types of incentives, including discounts, cash back or credit towards your monthly utility bill, depending on your situation. Some incentives come from your specific utility company, county or municipality, some from the Virginia government and others from the federal government. Types of solar incentives might include:

• Solar Renewable Energy Certificate (SREC): SRECs and similar performance-based incentives are generally handled at the state level. Once your solar system meets the threshold (typically a small amount of energy production), you are eligible to receive SRECs that you can then sell to your utility company or other buyers. The money you make from the sale is generally considered part of your taxable income.
• Tax Credits: Tax credits decrease, dollar-for-dollar, the total amount of tax you owe the government. Tax credits differ from tax deductions.
• Net Metering: Be sure to speak to your Madison Heights utility company about signing a net metering contract. This will allow you to receive credit towards your monthly utility bill 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.
• Tax Exemptions: Tax exemptions may come in two forms. The first is sales tax exemption, applied when you purchase solar panels. The second is property tax exemption. This allows you to exclude the value added by your solar system when paying property tax on your home.
• Rebates: Some solar companies will help you claim a rebate, or partial refund of your purchase, for your solar system. Counties or states will also sometimes offer limited-time rebates. If you receive a rebate, that amount will usually be deducted from your total price before tax credits are calculated.

Federal Solar Incentives

Federal solar incentives are likely to be the first thing that comes to mind when thinking about solar incentives. 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 the cost of your solar system.

The ITC originally covered 30% of the total cost of solar panel installation, although that number has fluctuated slightly over the last few years between 26-30%. The percentage you qualify for will depend on when your solar system was installed. The cost of installation includes the panels themselves as well as the cost of accessories, equipment and labor. There is no maximum claim amount. The ITC can be applied to solar panels installed after January 1, 2006, on your primary or secondary residence. The residence must be owned by you and in the United States.

Reaching out to your local Madison Heights solar panel installation expert is the best way to understand how the ITC could apply to your situation.

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. For solar system installations that begin after January 1, 2022, and are completed by the end of 2032, homeowners may be eligible for a credit for 30% of the total cost. The percentage will then decrease annually until the Clean Energy Credit ends in 2035. The expansion also makes claiming credit for energy storage systems easier than ever before, starting in 2023.

Click here to learn more about the new Inflation Reduction Act. To better understand how the new Clean Energy Credit applies to you, talk to your local Madison Heights solar installation company.

State & Local Solar Incentives

There are more than just federal solar incentives; tax credits, rebates and more are often offered at the state and local level. Incentives may be provided by the state of Virginia, or by your county or municipality. Certain incentives may be available for only a limited time, while others are ongoing.

Next Steps for Installing Solar in Madison Heights

Solar incentives may be offered by the federal government, the Virginia government or your local utility company. The variety of available incentives has contributed to a large increase in solar energy use in the last 15 years. Reaching out to your local Madison Heights solar panel installation expert is an excellent first step towards getting the most money possible when you switch to solar energy.