2025 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 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.

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.