2024 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 encourage people to make the switch to renewable energy by offering incentives meant to lower the financial burden of solar panel installation and use. Incentives might include things like discounts, cash back or credit towards your monthly utility bill. Some incentives are offered federally, while others are offered by the Virginia government or your specific utility company, county or municipality. Some broad categories of solar incentives include:
- Net Metering: You may be able to sign a net metering agreement with your Richmond utility company that will apply to all or a percentage of the excess electricity that is generated by your solar panels. They will then deduct this value from your monthly utility bill.
- Tax Credits: Tax credits are dollar-for-dollar reductions that lower the amount of income tax you owe the federal government. (This is different from a tax deduction.)
- Solar Renewable Energy Certificate (SREC): SRECs can be sold to your utility company (or other buyers) for cash that is generally considered 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 other performance-based incentives. Incentives like these are generally handled by your state government.
- Rebates: Your solar installer might help you claim a rebate, or partial refund of your purchase, for your solar panels. Counties or states will also offer limited-time rebates at various times. Any rebates you receive will usually be deducted from your total price before tax credits are calculated.
- Tax Exemptions: Sales tax exemptions go into effect at the time of purchase for your solar panels. Property tax exemptions let you ignore the added value of your solar system when you calculate the amount of property tax you need to pay on your home.
Best National Provider
SunPower
- Most efficient panels on the market
- National coverage
- Cradle to Cradle sustainability certification
- Great warranty coverage
- Expensive
- Customer service varies by local dealer
Best Solar Financing
Blue Raven Solar
- Industry-leading in-house financing
- Competitive pricing
- Excellent reputation
- Doesn't offer solar batteries
Best Social Impact
Palmetto Solar
- Expansive service area
- Makes charitable contributions
- Certified B Corp
- No leases or PPAs
- Quality of installation may vary by location
Federal Solar Incentives
When you hear the term "solar incentives," federal incentives are likely the first thing that comes to mind. The Federal Solar Investment Tax Credit, or ITC, is 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 can be credited towards the value of a solar system installed on your primary or secondary residence in the United States. The solar panels must have been installed on a property you own after January 1, 2006, for you to be eligible for the credit. Originally, the ITC covered 30% of all costs (panels, equipment, labor and accessories), although this amount has fluctuated over time between 26-30%. The installation date of your solar system will determine what percentage you are eligible for. There is no cap on the claim amount.
Your local Richmond solar panel installation expert can provide more information about the ITC and how it may apply to your situation.
The ITC was renewed and increased in scope after 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. Your solar installation project undertaken between 2022 and 2032 may qualify for a 30% tax credit. The amount will decrease slightly on a yearly basis until the current program ends. Beginning in 2023, it will also be easier to obtain credits for energy storage systems under this new program.
Click here to learn more about the new Inflation Reduction Act. The best way to learn more about how the new Clean Energy Credit applies to you is to reach out to your local Richmond solar panel company with your questions.
State & Local Solar Incentives
In addition to federal solar incentives, there are often also state ones. Tax credits, rebates and more might be available at a more local level. These incentives might be given out by your county or municipality, or by the Virginia government. Some are available for a limited time, while others are ongoing.
Next Steps for Installing Solar in Richmond
There are a number of different solar incentives: those offered by local utility companies, those provided by the Virginia government and those provided by the federal government, to name a few. The use of solar energy has grown tremendously in the last 15 years, partially thanks to these incentives. We recommend talking to your local Richmond solar installation expert to learn more about these incentives and to ensure that you're getting all the money you can for your solar system.
EcoWatch's Richmond, VA Solar Incentives FAQs
I already have solar panels. Does my system qualify for any incentives?
An excellent idea would be to talk to someone from the company that installed your system – or call a local Richmond solar installer — to clarify which incentives you may qualify for. If your solar panels were installed after January 1, 2022, you likely qualify for the newly increased 30% tax credit under the Inflation Reduction Act. Systems installed between 2006 and 2021 may qualify for a tax credit of 26-30%.
How much can I save annually on my electric bill if I add solar panels to my house in Richmond?
On average, homeowners in Richmond who install solar panels save approximately $490.58 per year, or about $9,811.54 over 20 years after they make the switch.
When does the federal solar tax credit end?
The Clean Energy Credit (formerly named 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 claim incentives both towards the up-front cost of solar panels, and later as reimbursement?
Yes, you can claim both rebates and tax credits towards the cost of solar panels. Depending on which incentives you are receiving, they may apply in a different order. Make sure that you speak with your solar installer or a local tax professional to verify that you are claiming incentives correctly and 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.