Federal, VA-State, and Local Tax Incentives for Solar Panels

There is a 26% Federal tax credit until the end of December 2022 for new homeowner who generates solar energy in 2022. This is available to all homeowners in all states. Virginia offers additional incentives for homeowners wanting to go solar. Virginia uses Solar Renewable Energy Credits (SREC) to encourage homeowners to generate more solar energy in the state. The SREC is a credit for every 1,000 megawatt hours the home produces in the solar panel system. For every 1,000 kWh (or 1 MegaWh) your system produces, you earn one SREC. You can then sell your SRECs on the SREC market, and the kickback you get for selling your credits can help you pay off your solar loan or recuperate your investment more rapidly if you paid cash for your solar panels. There is a cap of $75 on the price of SRECs in Virginia, so you’ll never get more than $75 per credit. A more realistic price for each unit of SREC is $25 to $50. With the typical 11-kilowatt system required to offset energy needs in Virginia, the average system will produce around 13.2 SRECs annually, which comes out to an average of around $462 or a maximum value of $990. While solar panels increase home and property value (and therefore property taxes), Virginia offers exemption for solar panels, therefore your property taxes do not increase because of addition of solar panels.