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

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

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

The term "solar incentives" broadly refers to financial incentives put in place by solar companies and the government to encourage the adoption and use renewable energy by making the installation and use of solar panels more affordable. Incentives might include things like discounts, cash back or credit towards your monthly utility bill. Some incentives are offered by the federal government, while others are offered by the state of Virginia or by your utility company, county or municipality. Some solar incentives you might qualify for are:

• Tax Exemptions: Tax exemptions may come in one of two forms. First, there is sales tax exemption, which is applied when you purchase solar panels. The second is property tax exemption, which allows you to ignore the value added by your solar system when calculating property tax for your house.
• Tax Credits: These credits are dollar-for-dollar reductions (not deductions) in how much income tax you owe the federal government.
• Net Metering: Net metering becomes relevant once your solar panels are up and running. If you have a net metering agreement with your Potomac Mills utility company, the company will subtract the value of the excess energy your solar system produces from your utility bill each month. In some locations, this is a dollar-for-dollar credit, while in other areas you may make back a percentage of the value.
• Rebates: A solar rebate is a partial refund given after you've purchased your solar system. These might be offered by your local utility company, your state or your county. The rebates are usually applied before tax credits are calculated.
• Solar Renewable Energy Certificate (SREC): SRECs are credits that can be sold to your utility company (or other buyers) for money that is generally considered part of your taxable income. Generally, you must meet a certain (small) threshold of energy production before your solar system is eligible for SRECs or other performance-based incentives. These kinds of incentives are normally handled by your state government.

Federal Solar Incentives

Federal incentives are the kind of incentives that you are most likely to have some knowledge of. A federal incentive that most people are probably familiar with is the Federal Solar Investment Tax Credit (ITC). This incentive is a tax credit for a given percentage of your solar system's cost.

The ITC can be applied to solar panels installed after January 1, 2006 on a primary or secondary residence that you own in the United States. The credit initially covered 30% of the total cost — for panels, accessories, equipment and labor — although it may range from 26-30%, depending on the installation date of your solar system. There is no cap on the amount you can claim.

To best understand how the ITC might apply to your situation, contact your local Potomac Mills solar panel installer and request more information.

The Inflation Reduction Act, passed in August 2022, added more provisions to the ITC (as well as retitling it the Clean Energy Credit). The Clean Energy Credit is valid until 2035. Your solar installation project undertaken between 2022 and 2032 may qualify for a 30% tax credit; this amount will decrease slightly each year until the end of the current program. Starting in 2023, the expansion to the program will also make it easier to get credit for energy storage systems.

Click here to learn more about the new Inflation Reduction Act. Your local Potomac Mills solar panel installers are the best people to answer your questions about the new Clean Energy Credit and how it will apply to you.

State & Local Solar Incentives

There are more than just federal solar incentives; rebates, tax credits and more might also be offered at the local or state level. Some incentives are offered for only a limited time, while others are ongoing. Your local solar incentives may come from your county or municipality, or from the Virginia government.

Next Steps for Installing Solar in Potomac Mills

The nationwide use of solar energy has increased enormously in the past 15 years, in part thanks to the growth in the number of solar incentives. You can obtain these incentives from the federal government, the Virginia government or your local utility company. If you're prepared to make the switch to solar energy, getting in touch with your local Potomac Mills solar panel installation expert is a great first step.