2025 Solar Incentives Guide for Salem, VA - Tax Credits & Rebates
In this guide, we'll cover the latest solar incentives and rebates available in Salem.
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 Salem?
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 meant to encourage homeowners to make the switch to renewable energy by offering incentives meant to lower the financial burden of solar panel installation and use. You might be eligible for different kinds of incentives, including discounts, cash back or monthly utility bill credits, 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. Types of solar incentives might include:
- Tax Credits: Tax credits decrease, dollar-for-dollar, the amount of income tax you owe the federal government. Tax credits are different from tax deductions.
- Tax Exemptions: Your solar system may qualify for both sales tax and property tax exemptions. Sales tax exemptions are applied at the time of purchase. Property tax exemptions let you ignore the added value of the solar panels when calculating property taxes on your home.
- Solar Renewable Energy Certificate (SREC): Generally, solar systems that produce over a threshold (normally small) amount of electricity qualify for SRECs or other performance-based incentives. SRECs and performance-based incentives in general are typically provided at the state level. When you receive an SREC, you can sell it to your utility company or another buyer, and generally the money you make is normally considered part of your taxable income.
- Rebates: A rebate is a partial refund given after you've purchased your solar panels. Rebates might be offered by your local utility company, your county or your state. The discount that rebates offer is normally applied to the price of solar panels before tax credits are calculated.
- Net Metering: Net metering is an incentive you can get once your solar panels are up and running. If you have a net metering agreement with your Salem utility company, it will subtract the value of the excess energy produced by your solar system from your utility bill each month. In some areas, this credit is dollar-for-dollar, while in others you might get refunded a percentage of the value.
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Federal Solar Incentives
Federal solar incentives are likely the first thing that you think of when thinking about solar incentives. The Federal Solar Investment Tax Credit, or ITC, is the most commonly known federal solar incentive. The ITC provides you with a tax credit for a predetermined percentage of the cost of your solar system.
The ITC initially applied to 30% of the total cost of solar system installation, although that number has fluctuated slightly over the last few years between 26-30%. The percentage you qualify for will depend on when your solar system was installed. The total installation cost includes the panels themselves as well as the cost of equipment, labor and accessories. There is no maximum amount you can claim. The ITC can be applied to solar systems installed after January 1, 2006, on your primary or secondary residence. The residence must be owned by you and in the United States.
To understand exactly how much the ITC could save you, talk to your local Salem solar panel installation expert.
In August 2022, the ITC (now titled the Clean Energy Credit) was expanded and extended by the passage of the Inflation Reduction Act. The new Clean Energy Credit now runs until 2035. Homeowners are now eligible for a 30% credit for solar systems that began installation after January 1, 2022, and are completed by the end of 2032. The credit will then see a slight annual decrease until its expiration. 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. Your local Salem solar panel installers are the best people to answer your questions regarding the new Clean Energy Credit and how it may apply to you.
State & Local Solar Incentives
Some solar incentives are often also provided by state and local governments. Like with federal incentives, these may include tax credits, rebates and more. These incentives — which may be given by your county or municipality, or by the state of Virginia — may be offered on an ongoing basis, or for only a limited time.
Next Steps for Installing Solar in Salem
The variety of solar incentives available has enormously increased the adoption of solar energy nationwide over the last 15 years. You may receive solar incentives from your local utility company, the federal government or the Virginia government. Your local Salem solar panel installation company can help you learn more about which incentives you may qualify for, and get you feeling good about making the change to renewable energy today.
EcoWatch's Salem, VA Solar Incentives FAQs
How can I learn if I qualify for certain solar incentives?
It's best to speak with your local Salem solar installer for a better understanding of which incentives your project will qualify for. Typically, solar incentives apply to new solar panel systems installed on a property you own (in the U.S.) within a specified date range. Some incentives, like those given by the state of Virginia, might have additional requirements.
What are some of the environmental benefits of switching to solar?
You can lower your carbon footprint by 100 pounds of CO2 a year when you install solar panels. This adds up to around 2,000 pounds over 20 years. In addition, solar power is a renewable energy source, which means that making the switch lessens the drain on our planet's resources.
I want to change out my appliances for ones that are more energy-efficient. Are there any benefits I can get?
The recently passed Inflation Reduction Act provides multiple incentives designed to reward homeowners who make eco-friendly upgrades. Some incentives include tax credits and rebates for installing new electric appliances. You can find more details about these incentives 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 located within the United States that you own; most secondary residences will 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 better understand what incentives 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.