With an average of 205 sunny days, Virginia is one of the best states for solar installation in the Mid-Atlantic. To help Virginians prepare for a more sustainable future, the Commonwealth of Virginia offers incentives. These incentives encourage homeowners and businesses to embrace renewable energy sources like solar energy. These incentives make it easier to go solar by reducing the costs of going solar and speeding up the return on investment.
Read on to learn about Virginia’s solar policies and the solar incentives and rebates available to businesses and homeowners.
Solar Energy in Virginia Continues to Grow
Many have already taken advantage of solar programs in the state. Virginia already has more than 4.8 gigawatts of solar installed across the state. It also has over a half million homes with solar rooftops. Both those factors make it one of the top states for solar across the nation. The popularity of solar there is thanks to dropping solar panel prices, as well as the state and federal incentive programs available in Virginia. These impact the commercial, industrial, and residential sectors in Virginia.
Virginia Solar Incentives for Homeowners
Virginia homeowners interested in installing solar panels are in luck because the state offers a number of solar incentives and rebates to help. These incentives help offset the upfront costs and lower the cost of switching to solar energy. These are among the most important incentives offered:
Residential Property Tax Exemption for Solar
Solar panels increase the value of your house, just like any other home improvement project. There is a property tax exemption in Virginia to keep this increase in home value from raising your home taxes.
For instance, if you install a $20,000 solar power system on a $350,000 home, your home value is taxed at $350,000. That’s rather than the $370,000 it’s worth after installing solar. If the property tax rate where you live is 0.75%, you’re not charged for the additional $150 on property taxes. Without the tax break, you would.
Until 2023, county and local governments in Virginia could exclude solar panel systems from property taxes. Senate Bill 686 changed this in January 2023. It makes the tax exemption for solar energy equipment mandatory with a capacity of up to 25 kW.
Virginia Solar Renewable Energy Credits (SREC)
Virginia is one of the states where solar is incentivized with Solar Renewable Energy Credits (SRECs). You receive 1 SREC for every 1,000 kilowatt-hours that your solar panels produce. You can sell the SRECs to nearby utility companies and other businesses that must comply with renewable energy regulations regarding their greenhouse gas emissions.
As of 2023, the price range for each SREC in Virginia was between $45 and $70. If your system generates 10,000 kWh in a year, it produces 10 SRECs. That means you could make an extra $450-$700 from your home solar system. That’s in addition to the ongoing savings on electric bills and net metering benefits, helping you recoup your solar installation investment faster.
Virginia Net Metering
For residential solar systems with up to 25 kW of capacity, Virginia provides net metering. Your power bill is credited with any excess solar generation your system sends to the electric grid. If your excess generation exceeds your monthly consumption, it is credited to your electric bill in the next month and deducted from your next payment.
In Virginia, Dominion Energy has the biggest net metering program. On the Dominion Energy website, you can apply to net meter if you’re thinking about installing solar on your house.
Federal Solar Tax Credit
One of the most compelling incentives to install solar panels is the Investment Tax Credit (ITC). This ongoing federal incentive. Home and business owners receive a tax credit for 30% of the total cost of their solar panel installation. It is also known as the Residential Clean Energy Credit. The homeowner can claim these savings in the tax year that follows the solar installation. However, if they can’t take advantage of the full credit the first year, the ITC applies to future tax bills until the full value is credited.
Solar Incentives for Businesses in Virginia
Virginia also provides several incentives and rebates for businesses seeking to install solar energy. These incentives encourage companies to invest in solar power, reduce their carbon footprint, and support the state’s clean energy objectives. The following are some of the more important business incentives:
VirginiaSAVES Green Community Program
For local utilities, the 2020 Virginia Clean Economy Act established a renewable portfolio standard (RPS) with clean energy targets, under which they must purchase SRECs for generating power from polluting sources like fossil fuel. If they purchase SRECs from small-scale solar operators the associated kilowatt-hours for those SRECs count toward their clean energy targets. For instance, purchasing 100 SRECs counts as 100,000 kWh of solar energy (1,000 kWh of solar energy output for each SREC). After 2024 those SRECs must come from Virginia-based generators.
Virginia Clean Economy Act
The Virginia program known as Commercial Property Assessed Clean Energy, or C-PACE, helps business owners invest in energy efficiency, water management systems, and renewable energy installations with low interest rates through a property tax assessment. The C-PACE financing is essentially a lien on the property. The initiative has Virginia Energy as a sponsor.
Virginia is taking major steps toward a more sustainable future with solar energy incentives for its residents and commercial sectors. This allows homeowners and businesses to enjoy the advantages of clean, renewable energy at lower costs. At the same time these programs are helping Virginia create thousands of jobs and build a more sustainable, robust energy system for future generations with the sun’s energy.
Commercial Property Assessed Clean Energy (C-PACE) Financing
The Virginia program known as Commercial Property Assessed Clean Energy, or C-PACE, helps business owners invest in energy efficiency, water management systems, and renewable energy installations with low interest rates through a property tax assessment. C-PACE financing is funded by a lien levy on the property. The initiative has Virginia Energy as a sponsor.
As you can see, Virginia is taking major steps for a more sustainable future by supporting solar energy and providing incentives to both its residents and commercial sectors. Homeowners and businesses in the Old Dominion have many opportunities to invest in solar power and enjoy the advantages of clean, renewable energy at lower costs thanks to a mix of state and federal incentives, rebates, and financing options. These are helping Virginia create thousands of jobs, lower its carbon footprint, and build a more sustainable, robust energy system for future generations with the sun’s energy.
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If you are a homeowner or a business looking for an affordable solar installation in Virginia, SolarSME can help you. Contact us today!
