2023 Solar Incentives Guide for South Riding, VA - Tax Credits & Rebates

What Solar Tax Credits, Incentives, and Rebates are Available in South Riding?

Source: https://www.dsireusa.org/

Solar incentives are designed to encourage homeowners to make the switch to renewable energy by offering incentives that lower the financial burden of solar panel installation and use. You may qualify for several kinds of incentives, such as discounts, cash back or monthly utility bill credits, depending on your situation. Some incentives come from your specific utility company, county or municipality, some from the Virginia government and others from the federal government. Some broad categories of solar incentives include:

• Rebates: Your solar installer might help you claim a rebate, or partial refund after purchase, for your solar system. Counties or states will also offer limited-time rebates at various times. The value of a rebate will usually come off your total price before tax credits are calculated.
• Solar Renewable Energy Certificate (SREC): SRECs are credits that can be sold to your utility company (or other buyers) for money that is generally considered part of your taxable income. In most cases, you must meet a certain (small) threshold of energy production before your solar system is eligible for SRECs or other performance-based incentives. Incentives like these are generally handled at the state level.
• Tax Credits: Tax credits are dollar-for-dollar reductions (not deductions) in how much income tax you owe the federal government.
• Tax Exemptions: Tax exemptions may come in two forms. First, there is sales tax exemption, which is applied when you purchase solar panels. The second is property tax exemption, which allows you to exclude the value added by your solar system when paying property tax on your home.
• Net Metering: Net metering is an incentive you can get after your solar system is up and running. If you've signed a net metering agreement with your South Riding utility company, they will subtract the value of the excess energy your solar system produces from your monthly utility bill. In some areas, this credit is dollar-for-dollar, while in other places you may receive a refund equivalent to a percentage of the value.

Federal Solar Incentives

When you hear the term "solar incentives," federal incentives might be the first thing that comes to mind. An incentive many people are probably familiar with is the Federal Solar Investment Tax Credit (ITC). The ITC is a tax credit for a certain percentage of the cost of your solar system.

The ITC can be credited towards the value of solar panels installed on your primary or secondary residence in the United States. The solar system has to have been installed after January 1, 2006 on a property owned by you for you to be eligible for the credit. The ITC initially covered 30% of all installation costs (panels, accessories, labor and equipment), although this amount has fluctuated slightly over the last few years between 26-30%. The amount you qualify for will depend on when your solar system was installed. There is no cap on the claim amount.

To better understand exactly how much money the ITC could save you, talk to your local South Riding solar panel installer.

The Inflation Reduction Act, passed in August 2022, added more provisions to the ITC (as well as retitling it the Clean Energy Credit). The new Clean Energy Credit is valid 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 total credit will then decrease annually until the date of expiration. Starting in 2023, the program expansion will also make claiming credit for energy storage systems easier than ever before.

Click here to learn more about the new Inflation Reduction Act. Your local South Riding solar panel company can answer your questions and explain how the new Clean Energy Credit will apply to you.

State & Local Solar Incentives

There are more than just federal solar incentives; rebates, tax credits and more are often offered at the state and local level. Incentives might be handled by your county or municipality, or by the state of Virginia. Certain incentives may be available for only a limited time, while others are ongoing.

Next Steps for Installing Solar in South Riding

The large number of available solar incentives has helped tremendously increase the use of solar power nationwide over the last 15 years. You can get solar incentives from your local utility company, the federal government or the Virginia government. If you're ready to switch over to solar energy, talking to your local South Riding solar panel installation expert is a great first step.