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What Solar Tax Credits, Incentives, and Rebates are Available in Charleston?
Federal Residential Renewable Energy Tax Credit
The phrase "solar incentives" includes 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. You might qualify for several types of incentives, such as cash back, discounts or credit towards your monthly utility bill, depending on your situation. Some incentives come from your specific utility company, county or municipality, some from the state of West Virginia and others from the federal government. Types of solar incentives might include:
- Tax Credits: Tax credits are dollar-for-dollar reductions that lower the amount of income tax you owe the federal government. (This is different from a tax deduction.)
- Tax Exemptions: Sales tax exemptions are effective at the point of sale for your solar system. Property tax exemptions allow you to ignore the value that your solar panels add when you're calculating the amount of property tax you need to pay on your home.
- Rebates: Your solar installer might 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 come off your total price before tax credits are calculated.
- Net Metering: Be sure to speak to your Charleston utility company about signing a net metering contract. This will allow you to receive credit towards your utility bill every month for the value of excess energy your solar panels generate. You may receive either a dollar-for-dollar credit or a percentage of the value.
Federal Solar Incentives
When someone says "solar incentives," you likely think of federal incentives first. An incentive that most people are probably familiar with is the Federal Solar Investment Tax Credit (ITC). This is a tax credit for a given percentage of your solar system's cost.
The ITC can be applied to a solar system installed on your primary or secondary residence in the United States. The solar panels have to have been installed on a property you own after January 1, 2006 for you to be eligible for the credit. Originally, the ITC covered 30% of all system costs (panels, labor, accessories and equipment), although the covered amount has fluctuated slightly over time 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.
Your local Charleston solar panel installation expert can provide you with more information about the ITC and how it may apply to your situation.
In August 2022, the ITC (now referred to as the Clean Energy Credit) was bolstered by the passing of the Inflation Reduction Act. The new Clean Energy Credit is valid until 2035. American homeowners can now apply for a 30% credit for solar systems that began installation after January 1, 2022 and are completed by the end of 2032. This credit will then decrease annually until the date of expiration. Starting in 2023, it will also be easier to get credits for energy storage systems with the new act.
Click here to learn more about the new Inflation Reduction Act. The best way to understand how the new Clean Energy Credit applies to you is to reach out to your local Charleston solar panel installers with your questions.
State & Local Solar Incentives
In addition to those provided at the federal level, there are often also state solar incentives. Tax credits, rebates and more might be available at a more local level. These incentives may be distributed by the West Virginia government, or by your county or municipality. Some are available for a limited time, while others are ongoing.
Next Steps for Installing Solar in Charleston
The variety of available solar incentives has contributed greatly to the increase in the adoption of solar energy nationwide over the last 15 years. You may receive solar incentives from the West Virginia government, the federal government or your local utility company. If you're ready to make the switch to solar energy, talking to your local Charleston solar panel installation expert is a great first step.
EcoWatch's Charleston, WV Solar Incentives FAQs
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