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

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

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

Solar incentives mitigate the cost of installing solar panels on your home. These financial incentives are designed to encourage more homeowners to make the switch to renewable energy. Incentives could include things like discounts, cash back or credit towards your monthly utility bill. Some incentives are offered federally, while others are offered by the Virginia government or your specific utility company, county or municipality. Some solar incentives you might qualify for are:

• Solar Renewable Energy Certificate (SREC): SRECs are credits that can be sold to your utility company (or other buyers) for cash that is generally considered part of your taxable income. Generally, there is a small threshold of energy production to meet before your solar system can earn SRECs or similar performance-based incentives. These kinds of incentives are typically handled by your state government.
• Tax Exemptions: Tax exemptions can come in two forms. First, there is sales tax exemption, which is applied at the time you purchase your solar panels. The second is property tax exemption, which allows you to ignore the added value of your solar system when paying property tax on your house.
• 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: Solar companies may help you claim a rebate, or partial refund of your purchase, for your solar system. States or counties will also sometimes offer limited-time rebates. If you receive a rebate, that amount will usually come off your total price 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 Portsmouth utility company, they will subtract the value of the excess energy produced by your solar system from your monthly utility bill. In some locations, this is a dollar-for-dollar credit, while in other places you might receive a refund equivalent to a percentage of the value.

Federal Solar Incentives

Federal solar incentives are likely the first thing that you think of when you think about solar incentives. The Federal Solar Investment Tax Credit, or ITC, is the most commonly known federal solar incentive. The ITC provides a tax credit for a specific percentage of your solar system's cost.

The ITC originally covered 30% of the cost of installing a solar system, although it 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 total installation cost includes the panels themselves as well as the cost of labor, accessories and equipment. There is no maximum amount you can claim. The ITC applies to solar systems installed after January 1, 2006 on your primary or secondary residence. The residence must be owned by you and in the United States.

To more fully understand how the ITC might apply to you, speak to your local Portsmouth solar panel installer and ask for more information.

In August 2022, the ITC (now referred to as the Clean Energy Credit) was bolstered by the passage of the Inflation Reduction Act. Homeowners can now qualify for a credit equal to 30% of the total solar system installation costs for projects started after January 1, 2022 and completed before the end of 2032. The percentage will then decrease on a yearly basis until the Clean Energy Credit ends in 2035. The expansion to the program also makes it easier to get credit for energy storage systems, starting in 2023.

Click here to learn more about the new Inflation Reduction Act. To understand how the new Clean Energy Credit might apply to you, get in touch with your local Portsmouth solar installation expert.

State & Local Solar Incentives

Some solar incentives are often also offered at the local or state level. Like with federal incentives, these can include tax credits, rebates and more. The incentives — which might be provided by the state of Virginia, or by your county or municipality — might be offered for only a limited time, or on an ongoing basis.

Next Steps for Installing Solar in Portsmouth

Nationwide solar energy use has gone up tremendously in the past 15 years, in part due to the proliferation of solar incentives. You may get these incentives from the federal government, the Virginia government or your local utility company. When you're prepared to make the change to solar energy, talking to your local Portsmouth solar panel installation expert is a great first step.