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.
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. Visit the Virginia Department of Housing and Community Development site for income requirements.
How To Enroll
Residents should call a local weatherization provider in their area and mention they are interested in applying for assistance under the weatherization program. The weatherization provider will schedule an appointment to conduct a home energy assessment so they can identify the best energy-saving measures.
Enrollment Period
Ongoing.
Roanoke City Real Estate Tax Credit
Roanoke offers a 10% real estate tax credit over five years for any homes that achieve a 30% increase in energy efficiency over Virginia’s Uniform Statewide Building Code standards.
Qualifications
Any home in the city of Roanoke is eligible for the tax credit. The 30% increase in efficiency over building standards must be certified by a professional not related to the applicant.
How To Enroll
Residents should fill out an application form and follow the steps outlined on the city’s website.
Enrollment Period
Ongoing.
LEAP Assisted Home Audit Program – City of Charlottesville and Albemarle County
Homeowners are eligible for savings on energy efficiency upgrades.
Qualifications
Homeowners in Charlottesville and Albemarle County must meet the income qualifications. For a family of four, Tier 2 audits are free if the household income is below $83,850 and $45 if the household income is between $83,850 and $111,199.
How To Enroll
Qualified homeowners are eligible on a first come, first served basis. Complete the online form to get scheduled.
Enrollment Period
This rebate is available while funds last. For more information, contact LEAP at info@leap-va.org or 434-227-4666.
Hanover County Cooling Assistance Program
Receive assistance for electrical cooling bill costs and equipment purchases 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. For more information, visit the Virginia Department of Social Services website.
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.
Commercial Building Tax Incentive
Owners or tenants of new or existing commercial buildings can qualify for a tax deduction of up to $1.80 per square foot.
Qualifications
Eligible for deductions are new or existing commercial buildings that are constructed or reconstructed to save at least 50% of the heating, cooling, ventilation, water heating, and interior lighting energy cost of a building that meets ASHRAE Standard 90.1-2007. Partial deductions of 60 cents per square foot can be taken for qualifying measures.
How To Enroll
Taxpayers should include the amount of the deduction in the “other deductions” line of the federal tax return, including a statement listing the types and amounts. No special form is required to claim the deduction.
Enrollment Period
The Inflation Reduction Act extended and expanded these tax deductions. As it becomes available, guidance from the IRS will be added to the ENERGY STAR website.
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.
How To Enroll
Contact the state or local tax office.
Cities currently offering a solar energy equipment and facilities exemption include Alexandria, Charlottesville, Fredericksburg, Hampton, and Roanoke.
Counties currently offering a solar energy equipment and facilities exemption include Fairfax, Fauquier, Loudoun, Prince William, Pulaski.
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.
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.