2023 Solar Incentives Guide for Springfield, VA - Tax Credits & Rebates
In this guide, we'll cover the latest solar incentives and rebates available in Springfield.
You'll learn about:
- Local & State Solar Incentives
- Federal Tax Credits (Updated for 2023 and beyond)
- Ways to optimize your solar investment
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What Solar Tax Credits, Incentives, and Rebates are Available in Springfield?
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
The term "solar incentives" refers to financial incentives put in place by solar companies and the government to encourage the use of renewable energy by making installing and using solar panels more affordable. Solar incentives might include cash back, upfront discounts or monthly credits towards your utility bill. Some incentives are given by the federal government, some by the state of Virginia and some by your specific utility company, county or municipality. Types of solar incentives might include:
- Solar Renewable Energy Certificate (SREC): SRECs can be sold to your utility company (or other buyers) for cash that typically becomes part of your taxable income. Generally, there is a small threshold of energy production to meet before your solar system is eligible for SRECs or other performance-based incentives. These kinds of incentives are typically handled by your state government.
- Tax Exemptions: Tax exemptions may come in two forms. The first is sales tax exemption, which is applied when you purchase solar panels. The second is property tax exemption. This allows you to exclude the value added by your solar system when calculating property tax for your home.
- Rebates: Rebates, or partial refunds after a purchase, are typically given prior to any solar tax credits being calculated. These rebates may be given by your local utility company, by your state or by your county.
- Tax Credits: Different from tax deductions, tax credits reduce, dollar-for-dollar, the amount of income tax that you owe the government.
- Net Metering: Net metering is an incentive you can get after your solar panels are up and running. If you have a net metering agreement with your Springfield utility company, the company 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 other areas you might be refunded a percentage of the value.
Federal Solar Incentives
When people think of solar incentives, federal incentives might be the first thing that comes to mind. A federal incentive that most people are likely familiar with is the Federal Solar Investment Tax Credit (ITC). The ITC is a tax credit for a specific percentage of your solar system's cost.
The ITC was originally for 30% of the total cost of installing a solar system, although that number has fluctuated slightly over the years between 26-30%. The installation date of your solar system will determine what percentage you qualify for. The total cost of installation includes the panels themselves as well as the cost of labor, accessories and equipment. 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 better understand how the ITC could apply to you, reach out to your local Springfield solar panel installer and ask for more information.
The ITC was both renewed and expanded by the passage of the Inflation Reduction Act in August 2022. It's also now called the Clean Energy Credit. The new Clean Energy Credit is valid until 2035. American 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 it expires. Starting in 2023, the expansion to the program 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 Springfield solar panel company is the best resource for answering your questions regarding the new Clean Energy Credit and how it will apply to you.
State & Local Solar Incentives
Some solar incentives may be offered at the local or state level. Like with federal incentives, these could include rebates, tax credits and more. Some incentives are offered for only a limited time, while others are ongoing. Your local solar incentives might come from the Virginia government, or from your specific county or municipality.
Next Steps for Installing Solar in Springfield
Solar incentives can come from the federal government, the Virginia government or your local utility company. The growing number of available incentives has helped nationwide use of solar energy increase greatly in the last 15 years. When you're ready to make the change to solar energy, calling your local Springfield solar panel installation expert is an excellent place to start.
EcoWatch's Springfield, VA Solar Incentives FAQs
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.