Incentives and Rebates
Federal, state, and energy provider incentives can help Virginia residents and businesses offset the costs of purchasing and installing energy-efficiency upgrades and equipment. In addition, federal incentives may allow you to lower your federal income tax payment. Please note that federal tax incentives paid through credits on your annual federal tax filings will require using the Internal Revenue Service’s most up-to-date forms. An overview of federal energy tax credits for consumers for the 2022 and 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.
Renewable Electricity Production Tax Credit (PTC)
The tax credit amount is 1.3 or 2.6 cents per kilowatt-hour for electricity generated by qualifying energy resources and sold by the taxpayer to an unrelated person during the tax year. The rules governing the PTC vary by resource and facility type.
Qualifications
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.
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
Learn more about the renewable energy tax credits from ENERGY STAR.
Enrollment Period
Tax credits for residential renewable energy expenditures will be available through December 31, 2032. Some credits won’t be available until the 2023 tax season.
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.
The Inflation Reduction Act of 2022 made several significant changes to this tax credit, including by expanding the list of eligible technologies, establishing new criteria, and extending the deadline.
How To Enroll
For corporate taxpayers, use “Form 3468 – Investment Credit” for commercial solar incentives.
Enrollment Period
Deadlines vary based on the project type.