2023 Solar Incentives Guide for University Center, VA - Tax Credits & Rebates

What Solar Tax Credits, Incentives, and Rebates are Available in University Center?

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

The phrase "solar incentives" refers to a range of financial incentives implemented to make installing and using solar panels more affordable. This is done to encourage people to switch to renewable energy. Various kinds of incentives, like discounts, cash back or monthly utility bill credits, may be available to you. Certain incentives may be handled by the state of Virginia, by your utility company or by county or municipality, while other incentives are federal. Types of solar incentives might include:

• Rebates: Solar companies may help you claim a rebate, or partial refund of your purchase, for your solar system. States or counties will also sometimes offer limited-time rebates. Any rebates you receive will usually be deducted from your total price before any 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. Generally, there is a small threshold of energy production to meet before your solar system qualifies for SRECs or other performance-based incentives. SRECs and similar incentives are typically handled at the state level.
• Tax Credits: Tax credits are dollar-for-dollar reductions that lower the amount of income tax you owe the government. (A tax credit is different from a tax deduction.)
• Net Metering: You may be able to sign a net metering contract with your University Center utility company, that may apply to all or a percentage of the excess electricity your solar panels generate. Your utility company will then deduct this value from your utility bill each month.
• Tax Exemptions: Tax exemptions may come in two forms. First, there is sales tax exemption, which is applied at the time you purchase your solar panels. The second is property tax exemption, which allows you to ignore the added value of your solar system when calculating property tax for your home.

Federal Solar Incentives

Federal incentives are the kind of incentives that you are most likely to have some knowledge of. You've likely heard of the Federal Solar Investment Tax Credit, or ITC. This incentive is a tax credit equal to a certain percentage of the money you spend on your solar system.

The ITC can be applied to the total cost of installing a solar system, including the panels themselves as well as accessories, labor and equipment. This credit can be claimed for panels installed after January 1, 2006 on a primary or secondary residence that you own, as long as it is located in the United States. The tax credit ranges from 26-30% of total costs depending on when your project was completed. There is no maximum claim amount.

To best understand how the ITC may apply to your situation, call your local University Center solar panel installer and request more information.

In August 2022, the Inflation Reduction Act made revisions to the ITC, now titled the Clean Energy Credit. Under the new program, solar installation projects begun after January 1, 2022 and finished by December 31, 2032 can qualify for a 30% tax credit. The amount of the credit will then decrease slightly each year until the current Clean Energy Credit expires in 2035. Starting in 2023, the expansion to the program will also make it easier to get credit for energy storage systems.

Click here to learn more about the new Inflation Reduction Act. To best understand how the new Clean Energy Credit applies to you, speak with your local University Center solar installation company.

State & Local Solar Incentives

Federal solar incentives are not your only option; tax credits, rebates and more are often offered at the local or state level. These incentives may be distributed by the Virginia government, or by your county or municipality. Some incentives may be ongoing, while others are available for a limited time.

Next Steps for Installing Solar in University Center

You can apply for solar incentives from the federal government and the Virginia government, as well as from your local utility company. The growing availability of solar initiatives in the past 15 years has helped increase solar adoption nationwide. Your local University Center solar panel installation expert can help you learn more about which incentives you should apply for, and get you feeling good about making the change to renewable energy today.