2023 Solar Incentives Guide for Portsmouth, VA - Tax Credits & Rebates
In this guide, we'll cover the latest solar incentives and rebates available in Portsmouth.
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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By EcoWatch Local Advisors
Data Analysis: James Savino
Ranking Methodology: Karsten Neumeister
Updated May 04, 2023
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What Solar Tax Credits, Incentives, and Rebates are Available in Portsmouth?
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
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.
Best Solar Financing
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- Industry-leading warranty coverage
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EcoWatch's Portsmouth, VA Solar Incentives FAQs
How do I know if I qualify for solar incentives?
Typically, solar incentives apply to:
- a new solar panel system
- installed on property that you own
- within the U.S.
- between the dates specified by a particular incentive.
Specific incentives, including those given out by the Virginia government or by your county/municipality, might have additional qualifications. Speak with your local Portsmouth solar installer to learn more about what incentives your project may qualify for.
I already have solar panels. Do I qualify for any incentives?
An excellent idea would be to talk to the company that installed your solar panels — or get in touch with a local Portsmouth solar installer — to learn about which incentives you might qualify for. If your solar panels were installed after January 1, 2022, you likely qualify for the newly increased 30% tax credit under the Inflation Reduction Act. Solar panels installed between 2006 and 2021 may qualify for a tax credit of 26-30%.
What are the highest-rated solar panel installation companies near me?
To find a top-rated solar panel installer, check out our guide to the top solar companies in Portsmouth.
Can I claim incentives both towards the up-front cost of solar panels, and later as reimbursement?
The order in which incentives are applied might vary depending on which incentives you are eligible for but typically yes, you can claim multiple types of incentives for your solar project. Get in touch with your solar installer or a local tax professional to verify you are claiming all the incentives you are eligible for and applying them in the correct order.
Can I use a combination of multiple types of renewable energy to power my home?
Yes, you can utilize multiple types of renewable energy to power your home — for example, a combination of solar and geothermal. You can also use both renewable energy sources and a backup source of non-renewable energy. You should discuss the details of your plan with your local Portsmouth solar installation expert, to make sure you know what you'll need and what kinds of incentives you might or might 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.