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

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

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

The term "solar incentives" refers broadly to financial incentives designed to encourage people to use renewable energy by making the installation and use of solar panels more affordable. Various kinds of incentives, like cash back, discounts or monthly utility bill credits, might be available to you. Some incentives may be handled by the state of Virginia, by your utility company or by county or municipality, while other incentives are federal. Some broad categories of solar incentives include:

• Rebates: Your solar installer might help you claim a rebate, or partial refund of your purchase, for your solar system. States or counties will also offer limited-time rebates at various times. The value of a rebate will usually be deducted from the total price before any tax credits are calculated.
• Tax Exemptions: Tax exemptions may come in two forms. First, there is sales tax exemption, which is applied when you purchase solar panels. The second is property tax exemption. This allows you to exclude the value added by your solar system when paying property tax on your house.
• Net Metering: Net metering is an incentive you can get after your solar panels are up and running. If you have in place a net metering agreement with your Reston utility company, it will subtract the value of the excess energy produced by your solar system from your monthly utility bill. In some locations, this credit is dollar-for-dollar, while in others you may get refunded a percentage of the value.
• Solar Renewable Energy Certificate (SREC): SRECs and other similar performance-based incentives are usually handled by your state government. Once your solar panel system meets the qualification threshold (usually a small amount of energy production), you can receive SRECs that can then be sold to your utility company or other buyers. The money you make is generally considered part of your taxable income.
• Tax Credits: Tax credits are dollar-for-dollar reductions that lower the amount of income tax you owe the federal government. (A tax credit is different from a tax deduction.)

Federal Solar Incentives

When you think about solar incentives, you likely think of federal incentives first. The Federal Solar Investment Tax Credit, or ITC, is probably the most well-known federal solar incentive. The ITC provides a tax credit for a predetermined percentage of your solar system's cost.

The ITC applies 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, labor, equipment and accessories — although that amount may range from 26-30%, depending on when your solar system was installed. There is no cap on the amount you can claim.

To better understand exactly how much money the ITC could save you, talk to your local Reston solar panel installation expert.

The ITC has been renewed and expanded following the passage of the Inflation Reduction Act in August 2022. It's also now called the Clean Energy Credit. Homeowners can now receive a credit of 30% of the total solar system installation costs for projects started after January 1, 2022 and completed before the end of 2032. The credit percentage will then begin to decrease annually until the Clean Energy Credit ends in 2035. 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. The easiest way to learn more about how the new Clean Energy Credit applies to you is to talk with your local Reston solar panel company.

State & Local Solar Incentives

Rebates, tax credits and more might be provided at multiple levels. Along with federal solar incentives, there are often state and local ones, too. These solar incentives — which might be handled by your county or municipality, or by the state of Virginia — may be offered for only a limited time, or on an ongoing basis.

Next Steps for Installing Solar in Reston

Nationwide solar energy use has increased enormously in the last 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. Reach out to your local solar panel installation expert today to find out more information and to save as much money as possible on solar panels for your Reston home.