Incentives and Rebates
Virginia residents and businesses can offset energy-efficiency upgrade costs with federal, state, and provider incentives. Federal incentives may allow you to reduce federal income tax payments. Be sure to use up-to-date IRS forms for tax credits. An overview of federal energy tax credits for consumers for the 2023–2032 tax years is available from the U.S. Department of Energy.
The following information is drawn from third-party websites and has not been independently verified.
Business Energy Investment Tax Credit
The federal Business Energy Investment Tax Credit offers incentives in varying amounts for a variety of qualifying technologies and energy upgrades.
Qualifications:
Businesses are eligible for tax credits for qualified solar water heating and photovoltaic systems and for certain solar lighting systems. Qualifying equipment will either use solar energy to generate electricity; to heat, cool, or provide hot water to a structure; or to illuminate the inside of a building by means of fiber-optic distributed sunlight. Note: The One Big Beautiful Bill (OBBB) made significant changes to this tax credit, for more details, view the program overview.
How To Enroll:
For corporate taxpayers, use “Form 3468 – Investment Credit” for commercial solar incentives.
Enrollment Period:
Deadlines vary based on the project type.
Renewable Energy Tax Credit – Residential
As part of the Inflation Reduction Act of 2022, the federal government has extended residential energy efficiency tax credits through 2032. In addition, the coverage and value of credits and rebates will be expanded starting in 2023.
Qualifications:
Expenditures that will qualify for credits or rebates include heat pumps, rooftop solar panels, electric HVAC systems, and water heaters in existing homes or new constructions.
How To Enroll:
Contact the program coordinator through the program page. Then, search for and contact a local participating contractor. The contractor will work with you to submit the rebate application for work completed on your behalf.
Enrollment Period:
Learn more about the renewable energy tax credits from ENERGY STAR.
Renewable Electricity Production Tax Credit (PTC)
The federal renewable electricity production tax credit (PTC) is an inflation-adjusted per-kilowatt-hour (kWh) tax credit for electricity generated by qualified energy resources and sold by the taxpayer to an unrelated person during the taxable year. The duration of the credit is 10 years after the date the facility is placed in service. The tax credit amount is between 0.5 and 2.75 cents per kilowatt-hour for electricity generated by qualifying energy resources. The rules governing the PTC vary by resource and facility type.
Qualifications:
Note: The One Big Beautiful Bill (OBBB) made significant changes to this tax credit. Review an outline of the eligibility window and credit amounts. Eligible renewable energy sources include landfill gas, wind, biomass, hydroelectric, geothermal electric, municipal solid waste, hydrokinetic power (i.e., flowing water), anaerobic digestion, small hydroelectric, tidal energy, wave energy, and ocean thermal.
How To Enroll:
The credit is claimed by completing Form 8835, “Renewable Electricity Production Credit,” and Form 3800, “General Business Credit.”
Enrollment Period:
The duration of the credit is generally 10 years after the date the facility is placed in service, but exceptions may apply.
Residential Property Tax Exemption for Solar
As of January 1, 2023, residential and agricultural properties with solar installations of up to 25 kilowatts are exempt from state and local taxes. As of December 2022, some localities continue to offer full or partial exemption for solar energy equipment and facilities.
Qualifications:
This is a Virginia property tax incentive. Certified solar energy items are defined as any “property, including real and personal property, equipment, facilities, and devices which use solar energy that would otherwise require a conventional source of energy.” Eligible technologies include passive solar space heat, active solar water heat, active solar space heat, solar thermal electricity, and photovoltaics. The solar equipment and installation has to be inspected and certified by the local building department or the Department of Environmental Quality to provide the value of the system for the purpose of determining tax credit.
How To Enroll:
Contact your state or local tax office. Contact the DEQ(Department of Environmental Quality) for more information.
Enrollment Period:
The state exemption started on January 1, 2023, and is ongoing. Please contact your local city or county tax office to see if they offer additional incentives.
179D Energy Efficient Commercial Buildings Tax Deduction
Building owners who install new equipment aimed at improving the energy efficiency of their properties may be able to claim a tax deduction to offset some of the costs of the equipment. The deduction is allowed under Internal Revenue Code (IRC) Section 179D.
Qualifications:
The deduction is available to: Owners of qualified commercial buildings and designers of EECBP/EEBRP installed in buildings owned by specified tax-exempt entities, including certain government entities, Indian tribal governments, Alaska Native Corporations, and other tax-exempt organizations. EECBP must be installed on or in a building that is located in the U.S. and within the scope of a specified Reference Standard 90.1 of the American Society of Heating, Refrigerating, and Air Conditioning Engineers (ASHRAE) and the Illuminating Engineering Society of North America.
How To Enroll:
Plan your project to improve energy efficiency in lighting, HVAC, water heating, or the building envelope. Certify energy savings through modeling or measurement, calculate the deduction, and claim it on your tax return (or allocate if tax-exempt). Keep all documentation for IRS review.
Enrollment Period:
Per the One Big Beautiful Bill Act (Public Law 119-21), the 179D commercial building tax deduction shall not apply to property the construction of which begins after June 30, 2026.
Hanover County Heating & Cooling Assistance Program
Heating assistance programs can help eligible households with the cost of purchasing oil, kerosene, propane, natural gas, coal, wood and electricity, as well as make repairs to heating units. Cooling assistance programs can help with electricity, fans, window unit air conditioners and repairs.
Qualifications:
Households must need cooling equipment purchases or repairs to be eligible. Households must also include someone who is disabled, age 60 or older, or age 5 or younger
How To Enroll:
To enroll in this program, residents should apply online. For more information, call Hanover DSS at 804-365-4100.
Enrollment Period:
Ongoing.
LEAP Assisted Home Audit Program – City of Charlottesville and Albemarle County
Households between 80-120% AMI can receive a $45 Home Energy Assessment. During the assessment with a LEAP Certified Residential Building Analyst, you’ll get an evaluation of your home’s energy efficiency, a blower door test, an infrared camera scan, and a checklist of additional energy-saving improvements for your home.
Qualifications:
To qualify for this incentive you must be a homeowner or homerenter in Charlottesville or Ambemarle County
How To Enroll:
Fill out the LEAP sign up form to begin the process, for more information, go to the Energy Resource Hub, or you may contact them at info@leap-va.org.
Enrollment Period:
Ongoing.
Roanoke City Real Estate Tax Credit
This program is available for energy-efficient buildings that exceed the energy efficient standards as prescribed by the Virginia Uniform Statewide Building Code by thirty (30) percent.
Qualifications:
To qualify for this special tax rate on the building only, City Code indicates that certification as an energy-efficient building must be made by a qualified licensed registered design professional or contractor who is not related to the applicant.
How To Enroll:
The application form must first be filed with the Department of Planning, Building, & Development and the certification document from a design professional or contractor should be attached to the application. Upon receipt of an approved application from the Department of Planning, Building, and Development, the local assessing officer in the Department of Real Estate Valuation shall proceed to assess the property.
Enrollment Period:
Ongoing.
Weatherization Assistance Program
The Weatherization Assistance Program enables low-income families to permanently reduce their energy bills by making their homes more energy-efficient. Funds are used to improve the energy performance of dwellings of families in need using the most advanced technologies and testing protocols available in the housing industry.
Qualifications:
Households qualify based on income. View this income limits sheet from the program website for income requirements.
How To Enroll:
DHCD works with a network of nonprofit organizations around the state, who directly implement the program. View this list of local providers and contact one that is in your area for further information and to apply.
Enrollment Period:
Ongoing.