2023 Solar Incentives Guide for Martinsville, VA - Tax Credits & Rebates

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

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

The term "solar incentives" refers broadly to financial incentives implemented by the government and by solar companies to encourage the adoption and use renewable energy by making solar panels more affordable. You might qualify for different types of incentives, including cash back, discounts or credit towards your monthly utility bill, depending on your situation. Certain incentives come from your specific utility company, county or municipality, some from the Virginia government and others from the federal government. You might qualify for any of the following types of solar incentives:

• Rebates: A solar rebate is a partial refund after the purchase of your solar system. These might be offered by your local utility company, your state or your county. The rebates are usually applied before calculating tax credits.
• Net Metering: Net metering becomes relevant after your solar panels are up and running. If you've signed a net metering agreement with your Martinsville utility company, the company will subtract the value of the excess energy your solar system produces from your monthly utility bill. In some locations, this credit is dollar-for-dollar, while in other places you may make back a percentage of the value.
• Solar Renewable Energy Certificate (SREC): SRECs and other similar performance-based incentives are normally handled at the state level. Once your solar system meets a predetermined threshold (typically a small amount of energy production), you can receive SRECs that can then be sold to your utility company or other buyers. The money you make from the sale is usually considered part of your taxable income.
• Tax Credits: Tax credits decrease, dollar-for-dollar, the total amount of tax you owe the federal government. These differ from tax deductions.
• Tax Exemptions: These might come in the form of property tax exemptions, which can let you ignore the value of your solar system when paying taxes on your home. You could also look for exemptions on sales tax at the time of purchase.

Federal Solar Incentives

Federal incentives are the type of incentives that you are most likely to have some familiarity with. The solar incentive that you're most likely to have heard of is the Federal Solar Investment Tax Credit (ITC), which gives you a credit on your taxes equal to a predetermined percentage of your solar system's cost.

The ITC can be credited towards the value of solar panels installed on your primary or secondary residence in the United States. The solar system has to have been installed after January 1, 2006 on a property owned by you for you to be eligible for the credit. Initially, the ITC applied to 30% of all costs (panels, accessories, labor and equipment), although the amount has fluctuated over time between 26-30%. The amount you qualify for will depend on when your solar system was installed. There is no cap on the amount you can claim.

Your local Martinsville solar panel installation expert can provide more information about the ITC and how it applies to your situation.

In August 2022, the Inflation Reduction Act laid out new provisions for the ITC, now dubbed the Clean Energy Credit. The new Clean Energy Credit now runs until 2035. 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 be decreased by a few percentage points every year until it expires. Starting 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 applies to you is to talk with your local Martinsville solar panel installers.

State & Local Solar Incentives

Some solar incentives may be offered at the local or state level. As with federal incentives, these can include tax credits, rebates and more. Incentives might be handled by your county or municipality, or by the state of Virginia. Certain incentives may be available for only a limited time, while others are ongoing.

Next Steps for Installing Solar in Martinsville

Nationwide solar energy use has gone up tremendously in the past 15 years, in part thanks to the increase in availability of solar incentives. You may get these incentives from your local utility company, the federal government or the Virginia government. When you're prepared to switch over to solar energy, reaching out to your local Martinsville solar panel installation expert is a great first step.