A BILL to amend the Code of Virginia by adding in Article 3 of Chapter 3 of Title 58.1 a section numbered 58.1-339.15, relating to solar energy equipment tax credit.
HB1422 would create a new Virginia individual income tax credit for taxpayers who purchase solar energy equipment for personal use. For taxable years beginning on and after January 1, 2026, and before January 1, 2031, eligible taxpayers could claim a nonrefundable credit equal to 15% of the cost of qualifying solar equipment and related allowable expenses, including permitting fees, inspection fees, and installation costs, up to a maximum credit of $1,000 per taxpayer.
The bill defines solar energy equipment broadly to include equipment used to collect, convert, store, or control solar energy for heat production, electricity production, or combined heat and electricity production. Taxpayers would need to submit receipts to the Department of Taxation to claim the credit. If the credit exceeds a taxpayer’s liability in a given year, the unused amount could be carried forward for up to five additional taxable years. The total statewide amount of credits would be capped at $5 million per year and allocated pro rata by the Department if claims exceed that cap.
HB1422 would add a new section to Title 58.1 of the Code of Virginia establishing a solar energy equipment tax credit and would affect the administration of the individual income tax under § 58.1-320. It would require the Department of Taxation to process claims, verify receipts, allocate credits within the annual cap, and issue guidelines for claiming the credit, with those guidelines exempt from the Administrative Process Act. The bill would primarily benefit individual taxpayers making personal-use solar purchases, while limiting the fiscal exposure of the Commonwealth through the per-taxpayer cap and the $5 million annual statewide cap.
Based on the bill text and its procedural posture, the measure appears to be a pro-solar, tax-incentive proposal intended to encourage residential adoption of solar energy equipment. There are no recorded committee transcripts or votes in the provided materials, so there is no direct evidence of debate or opposition in the available record. The bill was referred to the House Committee on Finance and was left in Finance, indicating it did not advance from committee at this stage.
The main policy questions likely concern the cost of the credit to state revenues, the fairness of subsidizing solar purchases through the tax code, and whether the credit should be limited to personal-use equipment rather than broader commercial installations. Administrative issues may also arise around documentation requirements, pro rata allocation when demand exceeds the cap, and the Department of Taxation’s authority to issue APA-exempt guidelines. Because no committee discussion or votes are provided, specific supporters or opponents are not identified in the record.