2024 Solar Incentives Guide for Reston, VA - Tax Credits & Rebates
In this guide, we'll cover the latest solar incentives and rebates available in Reston.
You'll learn about:
- Local & State Solar Incentives
- Federal Tax Credits (Updated for 2024 and beyond)
- Ways to optimize your solar investment
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What Solar Tax Credits, Incentives, and Rebates are Available in Reston?
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
Source: https://www.dsireusa.org/
The phrase "solar incentives" generally refers to financial incentives designed to encourage the use of renewable energy by making solar panels more affordable. Incentives can include things like discounts, cash back or credit on your utility bill each month. Some incentives are handled federally, while others are provided by the state of Virginia or by your specific utility company, county or municipality. Types of solar incentives might include:
- Solar Renewable Energy Certificate (SREC): SRECs are credits that can be sold to your utility company (or other buyers) for money that normally counts as part of your taxable income. In most cases, a certain (small) threshold of energy production must be met before your solar system qualifies for SRECs or similar performance-based incentives. These kinds of incentives are generally handled by your state government.
- Tax Credits: Tax credits are dollar-for-dollar reductions that lower the amount of income tax you owe the government. (This is different from a tax deduction.)
- Rebates: Some solar companies will help you claim a rebate, or partial refund of your purchase, for your solar system. Counties or states will also sometimes offer limited-time rebates. Any rebates you receive will usually come off your total price before any tax credits are calculated.
- Tax Exemptions: Your solar system might qualify for both sales tax and property tax exemptions. Sales tax exemptions are effective at the time of purchase. Property tax exemptions allow you to exclude the value that solar panels add when you are calculating property taxes on your home.
- Net Metering: Net metering becomes relevant once your solar system is 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 your solar system produces from your utility bill each month. In some places, this credit is dollar-for-dollar, while in others you may receive a refund equivalent to a percentage of the value.
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Federal Solar Incentives
Federal solar incentives are likely to be the first thing that you think of when you think about solar incentives. The Federal Solar Investment Tax Credit, or ITC, is probably the best-known federal solar incentive. The ITC provides you with a tax credit for a specific percentage of the cost of your solar system.
The ITC covers solar systems installed after January 1, 2006, and allows you to deduct from your taxes a percentage of the total cost of solar panels, accessories, equipment and labor. You can claim this credit for solar panels installed on a primary or secondary residence in the United States that you own. The original amount you could claim was 30% of the total cost, although certain projects may qualify for only 26%, depending on the details. There is no maximum claim amount.
Wondering how the ITC applies to your specific situation? Reach out to your local Reston solar panel installer to get more information.
In August 2022, the Inflation Reduction Act made revisions to the ITC, now referred to as the Clean Energy Credit. The Clean Energy Credit is valid until 2035. Any solar installation project that is completed between January 1, 2022, and December 31, 2032, may qualify for a 30% tax credit. The amount will be decreased slightly each year until the end of the current program. Starting in 2023, it will also be easier to get credits for energy storage systems under the new laws.
More information about the new Inflation Reduction Act can be found here. To understand how the new Clean Energy Credit will apply to you, speak with your local Reston solar installers.
State & Local Solar Incentives
Some solar incentives may be provided at the state and local level. Similar to federal incentives, these can include tax credits, rebates and more. Certain incentives are ongoing, while others might only be available for a limited time. These incentives might be offered by your county or municipality, or by the Virginia government.
Next Steps for Installing Solar in Reston
Solar incentives can be offered by the federal government, the Virginia government or your local utility company. The growing number of incentives available has helped nationwide use of solar energy increase greatly in the last 15 years. Speaking with your local Reston solar panel installer is an excellent first step towards getting all the incentives you qualify for when you switch to solar energy.
EcoWatch's Reston, VA Solar Incentives FAQs
My home already has solar panels. Does my system qualify for any incentives?
If your solar system was installed after January 1, 2022, you may qualify for the recently increased 30% tax credit under the Inflation Reduction Act. If your system was installed between 2006 and 2021, you might qualify for a tax credit between 26% and 30%, depending on the exact installation date. Talking to the company that installed your system, or any local Reston solar installer, can help you learn what incentives you can apply for.
What are the highest-rated solar panel installation companies near me?
To find the top solar panel installation companies near you, take a look at our article on the best solar companies in Reston.
How long until the federal solar tax credit ends?
The Clean Energy Credit (formerly named the federal solar tax credit, or the ITC), is slated to end on January 1, 2035. Currently set at 30%, the credit will drop to 26% in 2033 and to 22% in 2034.
If I trade in my appliances for ones that can use solar energy, are there any incentives I can claim?
Under the new Inflation Reduction Act, there are several new financial incentives for making eco-friendly improvements to your home. More details regarding these incentives, including information about incentives for purchasing new appliances, can be found here.
Can I get any financial incentives when I add solar panels to a vacation home, rental property or commercial property?
Many solar incentives are intended to apply to a property you own that is located within the United States, and most secondary residences fall into this category. There may be other solar incentives available for commercial properties, depending on the specifics. We recommend reaching out to your local solar installer and/or tax professional to best understand what incentives may apply to your specific situation.
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.