2023 Solar Incentives Guide for Wolf Trap, VA - Tax Credits & Rebates

What Solar Tax Credits, Incentives, and Rebates are Available in Wolf Trap?

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

Solar incentives mitigate the cost of installing a solar panel system on your home. Financial incentives like these are in place to encourage more people to switch their home over to renewable energy. Solar incentives might include cash back, upfront discounts or credit towards your monthly utility bill. Some incentives are handled by the federal government, some by the Virginia government and some by your specific utility company, county or municipality. You might qualify for any of the following types of solar incentives:

• Net Metering: Net metering factors in after your solar panels are up and running. If you've signed a net metering agreement with your Wolf Trap utility company, it 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 others you may receive a refund equivalent to a percentage of the value.
• Solar Renewable Energy Certificate (SREC): SRECs and similar other performance-based incentives may be available to you if you have a solar system that produces over a specified (typically small) amount of electricity. Performance-based incentives are generally handled by the state government. You can sell any SRECs you have to your utility company or other buyers, and the money you make is typically considered part of your taxable income.
• Tax Credits: Unlike tax deductions, tax credits reduce, dollar-for-dollar, the amount of income tax that you owe the federal government.
• Tax Exemptions: Your solar system might qualify for exemptions on both sales and property tax. Sales tax exemptions are effective at the time of purchase. Property tax exemptions allow you to exclude the value that solar panels add when you are calculating property taxes on your home.
• Rebates: Solar companies may 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. The value of a rebate will usually be deducted from the total price before tax credits are calculated.

Federal Solar Incentives

Federal incentives are the kind of incentives that you are most likely to have heard of. The Federal Solar Investment Tax Credit, or ITC, is the most well-known federal solar incentive. The ITC provides you with a tax credit for a specific percentage of your solar system's cost.

The ITC is applied to the total cost of solar panel installation, including the panels themselves as well as accessories, labor and equipment. You can claim this credit for panels installed after January 1, 2006 on a primary or secondary residence located in the United States that you own. From its original value of 30% of the total cost, the credit has fluctuated slightly between 26-30%, and you may qualify for varying percentages depending on when your project was completed. There is no maximum amount you can claim.

Have questions about how the ITC applies to your specific situation? Contact your local Wolf Trap solar panel installer to get more information.

In August 2022, the Inflation Reduction Act expanded and extended the ITC, now called the Clean Energy Credit. For solar systems installed between January 1, 2022 and December 31, 2032, homeowners may be eligible for a credit for 30% of the total cost. After 2033, the percentage will decrease annually until the Clean Energy Credit ends in 2035. The expansion to the program also makes it easier to get credit for energy storage systems, starting in 2023.

More information about the new Inflation Reduction Act can be found here. The easiest way to fully understand how the new Clean Energy Credit applies to you is to get in touch with your local Wolf Trap solar panel installation expert.

State & Local Solar Incentives

Some solar incentives may be provided by state and local governments. Like with federal incentives, these could include rebates, tax credits and more. These incentives might be given out by the Virginia government, or by your county or municipality. Certain incentives are ongoing, while others are available for a limited time.

Next Steps for Installing Solar in Wolf Trap

There are many kinds of solar incentives: those offered by local utility companies, those offered by the federal government and those offered by the Virginia government, to name a few. The use of solar energy has grown tremendously in the last 15 years, partially due to these incentives. We recommend talking to your local Wolf Trap solar installer for more information about these incentives and to be sure that you're getting the most money possible for your solar panels.