2025 Solar Incentives Guide for Richmond, VA - Tax Credits & Rebates
In this guide, we'll cover the latest solar incentives and rebates available in Richmond.
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 Richmond?
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/
Solar incentives are intended to make renewable energy usage more affordable through financial incentives for individuals who install solar panels on their homes. You might be eligible for different types of incentives, such as discounts, cash back or credit towards your monthly utility bill, depending on your situation. Certain incentives come from your specific utility company, county or municipality, some from the Virginia government and others from the federal government. You might qualify for any of the following types of solar incentives:
- Net Metering: You may be able to sign a net metering contract with your Richmond utility company. This agreement may apply to all or a percentage of the excess electricity your solar panels generate. They will then deduct this value from your monthly utility bill.
- Tax Credits: Tax credits lower, dollar-for-dollar, the amount of income tax you owe the government. These differ from tax deductions.
- Solar Renewable Energy Certificate (SREC): In most cases, solar systems that produce more than a specified (normally small) amount of electricity qualify for SRECs or other similar performance-based incentives. SRECs and the like are typically offered at the state level. You can sell SRECs to your utility company or another buyer, and this is usually considered part of your taxable income.
- Rebates: A rebate is a partial refund given after you've purchased your solar system. Rebates may be offered by your local utility company, your state or your county. The rebates are usually applied before calculating tax credits.
- Tax Exemptions: Your solar panel system could qualify for exemptions on both sales and property tax. Sales tax exemptions are applied at the time of purchase. Property tax exemptions let you exclude the value that solar panels add when calculating property taxes on your house.
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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. One of the incentives many people are likely familiar with is the Federal Solar Investment Tax Credit (ITC). The ITC is a tax credit for a predetermined percentage of the cost of your solar system.
The ITC can be applied to the total cost of solar system installation, including the panels themselves as well as equipment, accessories and labor. You can claim this credit for panels installed after January 1, 2006, on a primary or secondary residence located in the United States that you own. From its original value of 30% of the total cost, the credit has fluctuated slightly between 26-30%, and you may qualify for varying percentages depending on when your project was completed. There is no maximum claim amount.
Contacting your local Richmond solar panel installer is the best way to learn more about how the ITC may apply to your situation.
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. 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; this amount will decrease slightly each year until the current program ends. Starting in 2023, it will also be easier to claim credits for energy storage systems with the new act.
Click here to learn more about the new Inflation Reduction Act. Your local Richmond solar panel installers are the best people to answer your questions regarding the new Clean Energy Credit and how it will apply to you.
State & Local Solar Incentives
Tax credits, rebates and more might be claimed at multiple levels. In addition to federal solar incentives, there are often state and local ones as well. Some incentives are offered for only a limited time, while others are ongoing. Your local solar incentives could come from the Virginia government, or from your specific county or municipality.
Next Steps for Installing Solar in Richmond
There are many kinds of solar incentives: those provided by the federal government, those provided by the Virginia government and those offered by local utility companies, to name a few. The use of solar energy has grown enormously in the last 15 years, partially thanks to these incentives. We suggest talking to your local Richmond solar installation expert to learn more about these incentives and to make sure that you're getting the largest number possible for your solar panels.
EcoWatch's Richmond, VA Solar Incentives FAQs
I already have 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 you installed your system between 2006 and 2021, you may qualify for a tax credit between 26% and 30%, depending on the exact installation date. Reaching out to the company that installed your system, or any local Richmond solar installer, can help you learn what incentives you might want to apply for.
How much will solar panels save me annually on my electric bill in Richmond?
Generally, homeowners in Richmond who install solar panels save about $490.58 per year, or around $9,811.54 over 20 years after making the switch.
How long until the federal solar tax credit ends?
The Clean Energy Credit (previously referred to as the federal solar tax credit, or the ITC), is scheduled to end on January 1, 2035. Currently set at 30%, the credit will drop to 26% in 2033 and to 22% in 2034.
Can I receive incentives both towards the initial cost of solar panels, and later as reimbursement?
Yes, you can receive both tax credits and rebates towards the cost of your solar panels. Depending on precisely which incentives you are applying for, they may apply in a different order. Make sure that you speak with your solar installer or a local tax professional to ensure that you are claiming incentives correctly and that you're getting the most money possible.
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.