Installing Solar in Virginia: Is Going Solar Worth it in Virginia
Virginia ranks 9th in the U.S. for solar installation. Still, many homeowners question if it is worth installing solar PV modules in Virginia or not. It is due to the fact of VA’s electricity pricing which is below the national average rates. Moreover, the cost of solar equipment is also quite high in Virginia than in any other state. To say the least, solar panels are always worth a financing option because they provide a good return on investment.
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Important Points To Remember:
- Average Virginian homeowners utilize 1,095 kWh of electricity monthly
- The cost of solar panels in Virginia is around $2.75 per watt, which is higher than the national average of $2.88 per watt.
- Virginian homeowners require an average system size of 11 kW. The total price of a solar system is approximately $21,175 after the federal tax credit is considered in Virginia.
- The average solar panel system’s payback period in Virginia is around 13 years which is above the national average of 12 years.
- It is recommended to consult with a reputable solar installer and research the available incentives in your area before going solar.
- Virginia ranks 19th in the nation for installed solar capacity with over 2,600 megawatts (MW) of solar installation. This capacity is enough to power over 300,000 homes in the state.
- Average VA homeowners spend about $131.72 per month on utility bills. This makes this state the most expensive in the country in terms of energy cost.
What is in this article:
- Factors to Consider Before Installing Solar in Virginia?
- What are the Benefits of Installing Solar in Virginia?
- What to Look for When Considering Solar in Virginia?
Factors to Consider Before Installing Solar in Virginia?
- Your home energy requirement
- Cost of installing solar in Virginia
- Average payback period
- Average buy-back period
- Sun score number of your house
- Solar Outlook in Virginia
1.Home Energy Requirement
Solar panels can offset your entire monthly electricity bill. Thus, the more power you utilize, the more you will save with the solar PV modules. Usually, homes that utilize more than 500kWh are ideal for solar panel installation. The energy consumption in Virginia is also higher in comparison to the national average. Virginian homeowners utilize 1,095 kWh monthly. Moreover, solar conversion is also better in Virginia than in any other state, at least from an energy consumption perspective. You can check your monthly energy consumption from your previous electrical bills.
2. Cost of installing solar in Virginia:
The cost of solar panels in Virginia is around $2.75 per watt, which is higher than the national average of $2.88 per watt. However, Virginian homeowners require an average system size of 11 kW. The total price of a solar system is approximately $21,175 after the federal tax credit is considered.
Solar panels are more valuable in places where they can offset the homeowner’s electricity bill completely. This means that the higher the electricity rates and energy consumption, the best this is for solar conversion. In Virginia, solar panels are a bit more valuable than they are in many other states
3. Average Solar Payback Period in Virginia:
Solar power is an increasingly popular option for homeowners in Virginia looking to reduce their carbon footprint and save on their energy bills. However, the initial cost of installing a solar panel system can be significant, and many homeowners are concerned about the payback period. The payback period is the time it takes for the savings on electricity bills to offset the initial investment of the solar installation. The average solar panel system’s payback period in Virginia is around 13 years, which is above the national average of 12 years. The standard payback period in Virginia is between 10 to 16 years.
You can calculate your payback period using a solar calculator or more accurately with the help of a professional solar installer like Solar SME. If your system takes longer than 16 years to pay back, then your ROI will start dropping. The closer your payback period is to your solar array’s lifespan; your return period will be less. To find out whether installing solar in Virginia is worth it for you or not, you will have to compare your payback period with the initial installation cost.
Factors Impacting the Payback Period:
According to a report, the average payback period for a 6-kilowatt (kW) solar panel system in Virginia is between 6 and 8 years. This figure takes into account the initial cost of the system, available incentives, tax credits, and the amount of energy the system can generate. It is worth considering that the payback period for a solar installation can vary based on several factors. These factors may include the cost of electricity in your area, the size of the system, and the available incentives.
One of the most significant factors impacting the payback period is the cost of electricity in Virginia. The state’s average electricity rate is slightly higher than the national average. This can shorten the payback period for a solar installation. Additionally, Virginia offers several incentives that can offset the cost of a solar panel system. The federal solar tax credit, for instance, can offset up to 30% of the cost of a solar installation. The state also offers a property tax exemption for solar panel installations. This means that homeowners won’t have to pay additional property taxes on the added value of their solar system.
While the payback period for a solar installation may seem daunting, the long-term financial benefits make it a wise investment for homeowners in Virginia. After the payback period, the savings on electricity bills will continue for decades. This can provide a significant return on investment. It is recommended to consult with a reputable solar installer and research the available incentives in your area before deciding on solar panel installation.
4. Solar Buy-Back Rates in Virginia:
Solar buy-back rates are also known as net metering rates. It refers to the rate at which homeowners with solar panels can sell excess energy back to their utility company. In Virginia, net metering is available for homeowners with solar panels through the net metering program offered by their local utility. The net metering rates in Virginia vary, depending on the utility company and the rate structure. Here are some average net metering rates for the major utility companies in Virginia:
Dominion Energy Virginia:
For residential customers, the net metering rate is the same as the retail rate for electricity, which is around $0.12 per kilowatt-hour (kWh). For non-residential customers, the net metering rate varies depending on the rate schedule.
Appalachian Power Company:
The net metering rate for residential customers is around $0.08 per kWh, while the rate for non-residential customers varies depending on the rate schedule.
Northern Virginia Electric Cooperative (NOVEC):
For residential and non-residential customers, the net metering rate is the same as the retail rate for electricity, which is around $0.12 per kWh.
It is important to note that these rates are subject to change and may vary depending on the specific utility company and its net metering program. Homeowners interested in installing solar in Virginia should contact their local utility company to learn more about their specific net metering rates and program requirements.
5. Solar Outlook:
Virginia is experiencing rapid growth in the solar industry. This industry is driven by a combination of declining costs, increasing environmental awareness, and supportive state policies. According to the Solar Energy Industries Association, Virginia ranks 19th in the nation for installed solar capacity, with over 2,600 megawatts (MW) of solar power installation. This capacity is enough to power over 300,000 homes in the state.
Factors Improving the solar installation outlook in Virginia:
The solar industry in Virginia is expected to continue growing, driven by several factors. First, declining costs of solar panels and related equipment have made solar power more affordable for homeowners and businesses. This trend is expected to continue, making solar power increasingly competitive with traditional energy sources.
Additionally, Virginia has enacted several policies and initiatives that support the growth of solar energy. For example, the Virginia Clean Economy Act (VCEA) was signed into law in 2020, which requires the state transition to 100% clean energy by 2045, including a goal of 16,100 MW of solar and onshore wind energy by 2035. The VCEA also includes provisions to promote energy efficiency, electrification, and grid modernization.
Furthermore, Virginia’s net metering policy allows homeowners and businesses with solar installations to sell excess energy back to the grid at retail rates, which helps to offset the cost of the installation and provides an incentive for solar adoption.
As the solar industry in Virginia continues to grow, it is expected to provide significant economic benefits to the state. These benefits may include job creation and increased tax revenue. In 2020, the solar industry supported over 5,000 jobs in Virginia, and this number is expected to grow as more installations are completed.
What are the Benefits of Installing Solar in Virginia?
Solar PV modules are capable to lower your electricity bill while reducing your carbon footprint as well. Installing solar in Virginia will provide homeowners with quite a few benefits. Some of these benefits are as follows:
1. Reducing electricity bills:
The best advantage homeowners can get by installing solar in Virginia is that it lowers their electric bill. Solar panels utilize solar energy to produce electricity which eventually powers up their home. This means that you have to buy less electricity from the grid stations. Moreover, average VA homeowners spend about $131.72 per month on utility bills. This makes this state the most expensive state in the country in terms of energy cost.
An average homeowner in Virginia can yearly save up to $1,581 by shifting to solar energy. The Virginia resident can pay off their solar systems using solar savings in about 13 years. The average lifespan of solar panels is 25 years, leaving the rest of the 12 years for additional savings, which total up to $21,692.
Solar PV modules will help you lock in your current electricity rates for 25+ years. Hence, your utility bill will remain the same even if the electricity rates in your area start to increase.
2. Access to incentives and lower taxes:
Due to the solar rebates and incentives offered by the state and federal governments, Virginia is known as a solar state. The best incentive offered by the federal state is the solar Investment Tax Credit (ITC). However, ITC is 30% of your solar system, which is $9,075 in Virginia. This amount gets credited to your federal income tax liability for the year your system is installed.
Some other incentives that are available in VA are as follows:
Net Metering:
Net metering is a billing policy that lets solar customers sell the extra energy produced by their solar PV modules back to the utility stations. This policy can offset or even eliminate the homeowners’ energy bills by overproducing power with their solar PV modules. Net metering is mandated in Virginia, although the buy-back rate varies among utility companies.
Solar Renewable Energy Credits (SRECs):
SRECs are credits you earn for every 1,000 kilowatt-hours you produce with your solar PV modules. SRECs are sellable on the SREC market which can provide you with profit.
Residential Property Tax Exemption for Solar:
This is a property tax exemption that prevents your property taxes from getting higher after installing solar. However, things like home improvements can also increase your home value which eventually drives up your property taxes. Residential solar panels can make your home more valuable, but this exemption prevents your taxes from going up.
3. Increase in Home Value:
According to Zillow’s estimation, the home value takes a bump of 4.1% after solar panels installation. The average property value in Virginia is around $328,640. After solar installation, Virginian homeowners can expect an increase of about $13,474 in their property worth. This benefit is only available to those homeowners who utilize cash or solar loans to purchase solar arrays. While with solar lease and power purchase agreements, you are unable to attain this advantage. This is one of several downsides to opting for a solar lease or PPA.
4. Reduce carbon footprint:
VA is an eco-friendly state. However, installing solar in Virginia means that can reduce your carbon footprint, and fight against global warming. Solar arrays will also make you less reliant on your utility companies. This means you can avoid any future price hikes in electricity rates.
What to Look for When Considering Solar in Virginia?
1. Upfront Cost
Despite the long-term cost savings associated with solar panels, the initial investment required to install them can be a barrier for some homeowners. This is particularly true in Virginia, where the per-watt price for solar panels is higher than the national average. As a result, the upfront cost for solar installations can be high, making it difficult for some homeowners to bear the expense. While solar panels typically pay for themselves over time, many homeowners may need to seek financing options or explore alternative methods of funding to cover the initial investment.
2. Payback Period
To determine the viability of a solar panel installation for your home, calculating the estimated payback period is crucial. This calculation takes into account multiple factors such as the system size, upfront expense, and any shading on your roof, to provide an estimate of how long it will take for the savings from your solar panels to offset their initial cost. Knowing your payback period can also help you estimate your return on investment for the solar panel system. Therefore, understanding your estimated solar panel payback period is a vital step in evaluating the economic feasibility of a solar panel installation for your home.
Conclusion:
In conclusion, solar panels are a cost-effective and sustainable investment for homeowners and businesses in Virginia. With its numerous benefits including cost savings, environmental benefits, increased property value, and energy independence, solar energy is becoming an increasingly popular option for those seeking to reduce their carbon footprint and lower their electricity bills. While the upfront cost for solar installations may be high, the long-term payback period and return on investment make it a wise financial decision for many homeowners. With Virginia’s abundant sunlight and a growing number of incentives and financing options, making the switch to solar is very easy. By investing in solar panels, homeowners and businesses will not only reduce their reliance on the grid but also contribute to a more sustainable and cleaner future for generations to come.
