Virginia Tax Exemptions and Credits for Going Solar
In Virginia, homeowners and businesses going solar can benefit from several tax advantages. Here are three key ones:
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Federal Investment Tax Credit (ITC)
This is available to both residential and commercial solar system installations. As of now, the ITC offers a 30% credit on the total cost of your solar system. This means you can deduct 30% of the cost of installing a solar system from your federal taxes. This incentive is currently set to phase down starting in 2033 unless extended by further legislation.
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Property Tax Exemption
Virginia offers a property tax exemption for solar installations. This means that the added value to a property from the installation of a solar energy system is exempt from local property taxes. This can lead to significant savings, particularly as solar installations can considerably increase property value.
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Sales Tax Exemption
Virginia also provides a 100% exemption from state sales tax for eligible solar equipment. This includes not only solar panels but also related equipment necessary for the solar system’s functioning. The exemption can provide substantial upfront savings on the purchase of solar equipment.
No Upfront Costs for Virginia Homeowners
In Virginia, solar installations can be set up with no upfront costs through various financing options, making solar energy accessible without initial investment:
Solar Leases: Homeowners lease the solar equipment, paying a fixed monthly rate that's typically lower than their usual utility bill, with the solar company owning and maintaining the system.
Power Purchase Agreements (PPAs): Homeowners agree to pay for the power generated at a rate lower than local utility prices. The solar company retains ownership and handles maintenance.
Solar Loans: These loans are specifically designed to finance the total cost of a solar installation, offering favorable terms such as low-interest rates. Homeowners own the system outright and can benefit from federal tax credits and other incentives.
Incentives and Rebates: Virginia offers specific tax incentives, such as property tax exemptions and sales tax exemptions on solar equipment, which can significantly reduce the overall cost. Coupled with federal tax credits, these incentives can often cover a large portion of the installation costs, effectively eliminating upfront expenses.
These financing methods enable Virginia homeowners to start saving on their electricity bills immediately, without a large initial investment, while also enjoying the benefits of system ownership and maintenance covered by the solar provider.
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