HB1422 • 2026

Solar energy equipment; establishes a nonrefundable income tax credit.

<p class=ldtitle>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.</p>

Energy Taxes

Enacted

This bill passed the Legislature and reached final enactment based on the latest official action.

Sponsor: McGuire
Last action: 2026-02-18
Official status: Failed
Effective date: Not listed

Plain English Breakdown

The official source material does not provide details on what happens after the $5 million limit is reached each year.

Solar Energy Equipment Tax Credit

This bill creates a nonrefundable income tax credit for individuals who buy and install solar energy equipment in Virginia from 1 January 2026 to 31 December 2030.

What This Bill Does

Creates a new section in the Code of Virginia that allows an income tax credit for people buying and installing solar energy equipment.
Defines 'allowable expenses' as costs like permits, inspections, and installation fees related to purchasing solar energy equipment.
Sets the amount of the tax credit at 15% of the cost of the equipment and allowable expenses, up to $1,000 per person each year.
Limits the total credits given out each year to $5 million.

Who It Names or Affects

Individuals who buy and install solar energy equipment in Virginia from January 1, 2026, through December 31, 2030.

Terms To Know

Allowable expenses: The costs related to buying and installing solar energy equipment, such as permits, inspections, and installation fees.
Solar energy equipment: Equipment whose primary purpose is to provide for the collection, conversion, storage, or control of solar energy for heat production, electricity production, or both.

Limits and Unknowns

The bill does not specify what happens after the $5 million limit is reached each year.
It only applies to purchases made and expenses incurred from January 1, 2026, through December 31, 2030.

Bill History

2026-02-18 House
Left in Committee Education
2026-02-18 House
Left in Finance
2026-02-02 Subcommittee #1
Subcommittee recommends laying on the table (9-Y 1-N)
2026-02-01 House
Fiscal Impact statement From TAX (2/1/2026 1:25 pm)
2026-01-22 House
Presented and ordered printed 26102238D
2026-01-22 Finance
Referred to Committee on Finance

Official Summary Text

Tax credit; solar energy equipment.
Establishes a nonrefundable income tax credit for taxable years 2026 through 2030 for individuals who incur allowable expenses, as defined in the bill, for the purchase and installation of solar energy equipment, also defined in the bill. An individual who properly claims this credit shall be allowed a credit in the amount of 15 percent of the cost of such equipment and allowable expenses, up to $1,000. The aggregate amount of credits allowable under the provisions of the bill shall not exceed $5 million per taxable year.

Current Bill Text

Read the full stored bill text

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.

Be it enacted by the General Assembly of Virginia:

1. That the Code of Virginia is amended by adding in Article 3 of Chapter 3 of Title 58.1 a section numbered
58.1-339.15
as follows:

§
58.1-339.15
. Solar energy equipment tax credit.

A. For the purposes of this section:

"Allowable expenses" means costs incurred by a taxpayer for permitting fees, inspection fees, and installation costs associated with the purchase of solar energy equipment.

"Solar energy equipment" means equipment whose primary purpose is to provide for the collection, conversion, storage, or control of solar energy for the purpose of heat production, electricity production, or simultaneous heat and electricity production.

B. For taxable years beginning on and after January 1, 202
6
, but before January 1, 20
3
1
, a taxpayer shall be allowed a nonrefundable credit against the tax levied pursuant to §
58.1-320
for amounts paid for the purchase
of solar energy equipment

and associated allowable expenses. The amount of the credit shall be 15 percent of the cost of such equipment and allowable expenses incurred by the taxpayer in the Commonwealth during the taxable year, up to $1,000. No credit shall be allowed for any purchase or allowable expenses that are not intended for a taxpayer's personal use. To claim this credit, an eligible taxpayer shall submit all receipts for
such
purchase and associated allowable expenses to the Department.

C
. The amount of the credit that may be claimed in any single taxable year shall not exceed the taxpayer's liability for taxes imposed by this chapter for that taxable year. If the amount of the credit allowed under this section exceeds the taxpayer's tax liability for the taxable year in which the credit was earned, the amount that exceeds the tax liability may be carried over for credit against the income taxes of the taxpayer in the next five taxable years or until the total amount of the tax credit has been taken, whichever is sooner.
The aggregate amount of credits allowable under this section shall not exceed $5 million per taxable year. Credits shall be allocated by the Department on a
pro rata basis.

D
. The Tax Commissioner shall develop guidelines for claiming the credit provided by this section. Such guidelines shall be exempt from the provisions of the Administrative Process Act (§
2.2-4000
et seq.).