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

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

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

Solar incentives are intended to make renewable energy usage more affordable through financial incentives for those who install solar panels on their homes. Different types of incentives, such as cash back, discounts or monthly utility bill credits, may be available to you. Some incentives may be handled by the state of Virginia, by your utility company or by county or municipality, while others are federal. Types of solar incentives might include:

• Tax Exemptions: These may come in the form of property tax exemptions, which allow you to exclude the value added by your solar panels when paying property tax on your home. You may also qualify for an exemption on sales tax at the time of purchase.
• Solar Renewable Energy Certificate (SREC): Typically, solar systems that produce more than a specified (usually small) amount of electricity can qualify for SRECs or other similar performance-based incentives. SRECs and similar incentives are typically provided at the state level. You can sell SRECs to your utility company or another buyer, and this is usually considered part of your taxable income.
• Tax Credits: Tax credits are dollar-for-dollar reductions in the amount of income tax that you owe the federal government. (This is different from a tax deduction.)
• Rebates: A rebate is a partial refund credited to your account after you've paid for your solar system. Rebates could be offered by your local utility company, your state or your county. The rebates are usually applied before tax credits are calculated.
• Net Metering: Net metering is an incentive you can get after your solar system is up and running. If you have a net metering agreement with your Montclair 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 places, this is a dollar-for-dollar credit, while in others you might make back a percentage of the value.

Federal Solar Incentives

When thinking about solar incentives, federal incentives may be the first thing that comes to mind. You've likely heard of the Federal Solar Investment Tax Credit, or ITC. This is a tax credit equal to a certain percentage of the money you spend on your solar system.

The ITC applies to the value of solar panels installed on your primary or secondary residence in the United States. The solar system must have been installed on a property you own after January 1, 2006 for you to claim the credit. Originally, the ITC covered 30% of all system installation costs (panels, labor, accessories and equipment), although the total amount has fluctuated slightly over the last few years between 26-30%. The installation date of your solar system will determine what percentage you are eligible for. There is no cap on the claim amount.

Your local Montclair solar panel installation expert can offer more information about the ITC and how it might apply to your situation.

The ITC was both renewed and expanded by the passage of the Inflation Reduction Act in August 2022. It's also now called the Clean Energy Credit. The Clean Energy Credit re-raises the credit up to 30% for solar installation projects started after January 1, 2022 and completed by the end of 2032. After this, the credit percentage will decrease slightly each year until the program expires in 2035. The expansion also makes credits for energy storage systems even easier to claim, beginning in 2023.

Click here to learn more about the new Inflation Reduction Act. Your local Montclair 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

Tax credits, rebates and more can be provided at multiple levels. On top of federal solar incentives, there are often state and local ones as well. Some incentives are ongoing, while others might only be available for a limited time. Solar incentives may be given by your county or municipality, or by the Virginia government.

Next Steps for Installing Solar in Montclair

The large number of solar incentives available has enormously increased the adoption of solar energy nationwide over the last 15 years. You may receive solar incentives from your local utility company, the Virginia government or the federal government. If you're prepared to make the change to solar energy, getting in touch with your local Montclair solar panel installation expert is an excellent place to start.