Along with declining cost of solar panels, incentives are one of the main things that have made solar more affordable for homes and businesses around the U.S.
Residents of all states who get solar can tap into the federal tax credit, which can reduce the cost of a solar installation by 30%. In addition, farms and other businesses located in rural areas can take advantage of another incentive from the federal government, grants from the Department of Agriculture.
Other solar incentives vary by state. In Virginia, the main incentive that’s different from other states is net energy metering.
Net metering allows owners of solar energy systems that are connected to the electrical grid to sell their excess power back to their local utility company. Unlike some states, which have low payments for net metering or don’t even require all utilities to buy back excess solar power, Virginia has net metering at good rates across the state. That’s helped to make solar much more affordable in the Old Dominion.
Virginia offers a couple of other incentives also that bring down the cost of solar.
Since incentives can change over time, here we’ll update the main Virginia solar incentives available in 2017.
List of Solar Incentives Available in Virginia in 2017
- Net Energy Metering: Once they’re installed, all solar systems connected to the electrical grid can sell their excess power back to their utility up to a certain maximum at the retail rate they pay for electricity. Under Virginia’s net-metering rule, residents can net meter solar energy systems up to 10 kilowatts in size or commercial systems up to 500 kilowatts.
- Property Tax Exemption: Adding solar will increase the value of your home or business, as recent studies have proven. Commercial businesses that get a certain amount of solar qualify for a property tax exemption across the state. And homeowners who live in cities or counties that have passed a local solar property tax exemption can also benefit.
- Federal Investment Tax Credit (ITC): Originally slated to expire in 2016, the 30% federal tax credit on solar has been extended through 2019. The ITC then steps down to 26 percent in 2020 and 22 percent in 2021. After 2021, the credit for homeowners will drop to zero, though businesses will still be able to qualify for the credit at 10% indefinitely.
- Accelerated Depreciation: Businesses can deduct 85% of the value of the solar asset from their federal taxes over a five-year period. Please note that taking the accelerated depreciation may reduce the amount of you solar system eligible for the 30% federal tax credit.
- USDA Renewable Energy for America Program Loans and Grants: Here’s another one for businesses. The program’s title is a mouthful but the REAP loans and grants are a good opportunity for farms and other businesses located in rural areas — even businesses that are not in agriculture — to qualify for a cash grant or low-interest loan to purchase a solar energy system. We’re talking about real money here. Grants range from $2,500 up to $500,000. Loans range from $5,000 up to $25 million. Read more about the program in Virginia.
Other programs, like low-interest loans through the property assessed clean energy program (PACE) are available in certain areas. In addition, some local utilities may offer their own incentives. For example, TVA offers a $1,000 cash rebate for their customers who get solar.
And remember that all these programs may be time limited. Some already have sunset dates, like the 30% federal tax credit. Others could be changed or eliminated in the future. Fortunately, if you get solar while any of these incentives is still offered, you can usually lock in that incentive at the rate of benefit that was current when you got solar installed.
An experienced solar installer like Main Street Solar can help both homes and businesses qualify for the maximum number of incentives available for their location.
If you wonder how much a solar system would cost for you after incentives, ask us for a free quote.
— Andrew Brenner, Main Street Solar