2023 Solar Incentives Guide for McLean, VA - Tax Credits & Rebates
In this guide, we'll cover the latest solar incentives and rebates available in McLean.
You'll learn about:
- Local & State Solar Incentives
- Federal Tax Credits (Updated for 2023 and beyond)
- Ways to optimize your solar investment
Solar installers are experts in maximizing your solar tax credits and rebates.
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Updated September 15, 2023
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What Solar Tax Credits, Incentives, and Rebates are Available in McLean?
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
Source: https://www.dsireusa.org/
Solar incentives are intended to make renewable energy usage more affordable through financial incentives to help people install solar panels on their homes. Different types of incentives, like cash back, discounts 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 other incentives are federal. Types of solar incentives might include:
- Tax Credits: Tax credits are dollar-for-dollar reductions that lower the amount of income tax you owe the government. (This is different from a tax deduction.)
- Tax Exemptions: Your solar panels may qualify for both sales tax and property tax exemptions. Sales tax exemptions come into effect at the time of purchase. Property tax exemptions allow you to ignore the value that solar panels add when you are calculating property taxes on your home.
- Solar Renewable Energy Certificate (SREC): In general, solar systems that produce more than a specified (usually small) amount of electricity qualify for SRECs or other performance-based incentives. SRECs and the like are typically offered at the state level. When you receive an SREC, you can sell it to your utility company or another buyer, and this is usually considered part of your taxable income.
- Net Metering: Net metering becomes relevant once your solar panels are up and running. If you have in place a net metering agreement with your McLean utility company, the company will subtract the value of the excess energy produced by your solar system from your utility bill each month. In some locations, this credit is dollar-for-dollar, while in others you may receive a refund equivalent to a percentage of the value.
- Rebates: Solar rebates can be provided by your local utility company, or by your county or state. These rebates work as partial refunds that are applied after you purchase solar panels and before tax credits are calculated.
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Federal Solar Incentives
When people think of solar incentives, federal incentives are likely the first thing that comes to mind. The Federal Solar Investment Tax Credit, or ITC, is the most commonly known federal solar incentive. The ITC offers a tax credit for a specific percentage of the cost of your solar system.
The ITC originally covered 30% of the total cost of solar panel installation, and has fluctuated slightly over time between 26-30%. The percentage you qualify for will depend on when your solar system was installed. The total installation cost includes the panels themselves as well as the cost of accessories, equipment and labor. There is no maximum claim amount. The ITC applies to solar systems installed after January 1, 2006 on your primary or secondary residence. The residence must be in the United States and owned by you.
To best understand how the ITC could apply to your situation, get in touch with your local McLean solar panel installer and ask for more information.
The Inflation Reduction Act, passed in August 2022, added more provisions to the ITC (as well as renaming it to the Clean Energy Credit). Under the new program, solar installation projects started after January 1, 2022 and completed by the end of 2032 may be eligible for a 30% tax credit. The amount of the credit will then see a slight annual decrease until the current Clean Energy Credit expires in 2035. Beginning in 2023, it will also be easier to claim credits for energy storage systems with the new act.
More information about the new Inflation Reduction Act can be found here. Your local McLean solar panel installation expert is the best person to answer your questions regarding the new Clean Energy Credit and how it will apply to you.
State & Local Solar Incentives
Some solar incentives may be provided by state and local governments. As with federal incentives, these could include tax credits, rebates and more. Certain incentives are ongoing, while others may only be available for a limited time. Incentives might be provided by your county or municipality, or by the Virginia government.
Next Steps for Installing Solar in McLean
Solar incentives can be provided by your local utility company, the federal government or the Virginia government. The variety of solar incentives available has contributed to a large increase in solar energy use in the last 15 years. Your local McLean solar panel installation expert can help you learn more about which incentives you can apply for, and get you on track to switch to renewable energy today.
EcoWatch's McLean, VA Solar Incentives FAQs
How much can I save on my electric bill annually if I add solar panels to my house in McLean?
Once you add solar panels to your house in McLean, you can anticipate savings of approximately $898.00 per year, or approximately $17,062.02 over 20 years.
What are some environmental benefits of adding solar panels to my house?
Solar energy is a renewable energy source — by switching where you get your energy, you can help lessen the strain on our planet's resources. A solar system can also reduce your home's CO2 emissions by 300 pounds yearly, or roughly 6,000 pounds in 20 years.
If I trade in my appliances for ones that can utilize solar energy, are there any credits that I can claim?
The recently passed Inflation Reduction Act introduces several incentives meant to reward homeowners for making eco-friendly upgrades. Some incentives include rebates and tax credits for installing new electric appliances. You can find more details about these incentives here.
Can I receive incentives both towards the initial cost of solar panels, and later as reimbursement?
The order that incentives will be applied in might vary depending on which incentives you are eligible for but typically yes, you can receive multiple types of incentives for your solar project. Get in touch with your solar installer or a local tax professional to confirm you are claiming all of the incentives you qualify for and applying them in the correct order.
Can I use solar and another type of renewable energy in combination to power my home?
Yes, you can utilize multiple types of renewable energy to power your home, such as a combination of wind and solar. You can also use both renewable energy sources and a non-renewable backup source of energy. You should discuss your proposed plan with your local McLean solar installation expert, to make sure you know what you'll need and what kinds of incentives you may or may not qualify for.
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.
Solar incentive research was conducted by Melissa Smith and Karsten Neumeister. Local data analysis was conducted by James Savino. See something we missed or could do better? Email the editor.