Solar Tax Credit

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(User-friendly URL: This webpage can be reached at www.charlottesville.org/SolarTaxCredit)

Picture of a Solar PV and a Solar Thermal system on a rooftopThe City of Charlottesville offers a tax credit for certified solar energy equipment, facilities or devices that are attached to real estate within the City of Charlottesville.* The tax credit applies a portion of the total cost of the solar equipment, facilities, or devices as a credit on the real estate tax bill for 5 years. A successful application must be made to receive this tax credit.

* Certified solar energy equipment, facilities or devices means any property, including real or personal property, equipment, facilities or devices, certified by the division of building and life safety to be designed and used primarily for the purpose of providing for the collection and use of incident solar energy for water heating, space heating or cooling or other application which would otherwise require a conventional source of energy such as petroleum products, natural gas or electricity.

 

How to Apply for the Solar Tax Credit

Owners of the real estate to which the certified solar energy equipment, facilities or devices are attached must complete an application process to receive the solar tax credit.

  • The solar energy equipment, facilities or devices must be fully installed before the solar tax credit application is submitted.

  • A final inspection by the City's Building Inspectors must be complete to close out the solar project's permit. Note that this final inspection typically requires the contractor/installer to meet the City Inspector on site.

    The final inspection should also be complete before the solar tax credit application is submitted. For questions regarding this process and to schedule a final inspection, contact the Department of Neighborhood Development Services at (434) 970-3182.

  • Complete the Solar Energy Tax Exemption/Credit Application. Note: the application includes a 1-page "Contractor/Supplier Statement of Cost" form that must be notarized.

    This form and other building incentives can be found on the Building Permits & Inspections' Incentive Programs webpage.


  • Submit the completed application to:
    Neighborhood Development Services, City of Charlottesville
    610 East Market St
    PO Box 911
    Charlottesville, VA 22902

  • Deadline:  Installation and inspection must be complete by December 31. Completed application forms must be submitted by January 15.   (Note:  The application deadline was relaxed in Dec. 2015. It was formerly Sept. 30.)

 

How/When Will I Receive the Solar Tax Credit?

For the solar tax credit to appear on next year's real estate tax bill, final inspections and installation must be complete by the end of the calendar year (December 31) and complete application forms with all required documentation must be submitted by January 15. The City's Building Inspectors will contact the applicant if the application is incomplete or if there are other issues (such as lack of a final inspection) that would delay approval of the application. Applications completed or submitted after January 15 will be processed and will appear on the following year's real estate tax bill.

For example: If a solar energy system is fully installed and inspected by December 31, 2015, a complete application is submitted on January 5, 2016, and the application is approved, the solar tax credit will first appear as a line item on the April 2016 real estate tax bill. If the same application was completed or submitted in February 2016 (instead of before January 15) and was approved, the solar tax credit would first appear as a line item on the April 2017 real estate tax bill.

 

How Much is the Solar Tax Credit?

The amount credited will be calculated by applying the current tax rate to the amount of the purchase and installation costs of the certified solar energy equipment, facilities or devices. The credit applies for five (5) years and becomes effective beginning the first day of the tax year next succeeding the certification by the division of building and life safety and will remain in effect for that tax year and the following four (4) tax years.

Example: A property is assessed at $300,000. A solar system is then installed with $10,000 of labor and purchased certified solar equipment, facilities or devices. The property’s assessed value remains $300,000.

The property owner submits the solar tax credit application and is approved. The credit amount would be equal to ($10,000 x Tax Rate) and will be applied every year for five (5) years. With a tax rate of 0.95%, the solar tax credit for this property would be: $10,000 x 0.95% = $95.00 annually ($475 in total over 5 years).

 

For More Information:

Visit the City's Green Incentives webpage: www.charlottesville.org/greenincentives

Read the city code that approved the solar tax credit: City Code Article V Division 1 Sec. 30-126 through Sec. 30-138

View information regarding the Federal Solar Income Tax Credit (ITC) for homeowners and commercial properties.