2022 Virginia Solar Tax Credits, Rebates & Other Incentives

Here’s a quick look at the solar incentives in Virginia:

  • Federal Solar Tax Credit (ITC)
  • Net Metering
  • Solar Renewable Energy Credits (SRECs)
  • Additional City & Utility Rebates
Ecowatch Author Karsten Neumeister

By Karsten Neumeister, Solar Expert

Updated 9/18/2022

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Our solar experts have sifted through hundreds of local governments and utility companies’ websites to find accurate information about current solar incentives in each state. We’ve also unbiasedly ranked and reviewed hundreds of solar installers to empower you to make the right choice for your home.

How Much Can You Save With Solar Incentives in Virginia?

In this article, we’ll discuss the solar incentives and rebates available to Virginia homeowners. When you’re ready to speak with a qualified professional, follow the links below. Each of these companies can help you identify and apply for incentives available in Virginia.

Jump to Section:

  1. Solar Rebates, Tax Credits and Incentive Programs in Virginia
  2. Net Metering in Virginia
  3. Federal Solar Tax Credit
  4. FAQ: Virginia Solar Incentives
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Solar energy is becoming more and more affordable throughout the U.S., but homeowners in Virginia still pay an average of $30,250 for their solar energy systems. This total is assuming the average per-watt price of solar equipment in the area — $2.75, currently — and the typical system size required in Virginia to offset electricity costs. While solar panels typically pay for themselves over time, this upfront cost is still prohibitively expensive for many homeowners.

Thankfully, the total effective cost of going solar in Virginia can often be brought down by taking advantage of the solar incentives provided by the state and federal governments. Below, we’ll be discussing all of the solar incentives that can ease the financial burden of going solar in VA and those that make solar a more worthwhile long-term investment.

Disclaimer: This article is for informational purposes only. It should not be relied on for and is not intended to provide accounting, legal or tax advice.

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Current Solar Rebates, Tax Credits and Incentive Programs in Virginia

The following table provides a quick view of the top solar incentives and rebates Virginia homeowners can take advantage of. We include some basic information here and explain these benefits and incentives in further detail below.

Virginia Solar Incentive Description
Federal Solar Tax Credit (ITC) The federal solar tax credit is available to all Virginians. It provides a tax credit in the amount of 30% of your total cost of going solar.1 In Virginia, where the typical system totals $30,250, that’s a massive average credit of $9,075, making this one of the most substantial solar incentives in the state.
Net Metering Net metering is a billing policy offered by local utility companies and incentivized on a state-by-state basis by local governments. It allows you to reduce your electric bills or even eliminate them by overproducing energy with your panels and selling the energy back to your power provider.2 We’ll explain Virginia’s net metering policy in detail below.
Solar Renewable Energy Credits (SRECs) Virginia has an SREC program that allows homeowners to earn energy credits for every 1,000 kilowatt-hours (1 megawatt-hour) they produce with their PV systems.3 Those energy credits can then be sold for cash, effectively allowing you to get paid to go solar. We’ll explain how this process works in greater detail below.
Residential Property Tax Exemption for Solar Most home improvements that increase your property value also bump up your property taxes, as you’re taxed on your home’s assessed value. While solar panels boost property value, Virginia’s property tax exemption could prevent your property taxes from increasing as a result of going solar, depending on the city you live in.4

Virginia Solar Rebate

Some states provide a state tax credit in addition to the federal tax credit to incentivize homeowners to convert to solar energy. Virginia does not have a state tax credit — it instead uses Solar Renewable Energy Credits (SRECs) to entice residents to adopt solar. Virginia has a Renewable Portfolio Standard (RPS) that aims to generate 100% of the state’s electricity from renewable energy sources by 2050, and SRECs will help the state reach that lofty goal.5

houses with solar panels on the roof

SRECs are energy credits that any solar customer in VA can earn simply by producing solar energy. For every 1,000 kWh (or 1 mWh) your system produces, you earn one SREC. You can then sell your SRECs on the SREC market, and the kickback you get for selling your credits can help you pay off your solar loan or recuperate your investment more rapidly if you paid cash for your solar panels.

There is a cap on the price of SRECs in Virginia, so you’ll never get more than $75 per credit. A more modest price between $20 and $50 is more realistic. With the typical 11-kilowatt system required to offset energy needs in Virginia, the average system will produce around 13.2 SRECs annually, which comes out to an average of around $462 or a maximum value of $990.6

Other Virginia Solar Incentives

Virginia is considered among the top 10 most solar-friendly states — according to the Solar Energy Industries Association — and that’s partially because of the variety of solar incentives afforded to residents.7 In addition to the incentives mentioned above, the State of Virginia also provides a program to help commercial, industrial and non-profit organizations adopt solar power for less: The VirginiaSAVES Green Community Loan Program.

The Green Community Loan Program makes solar financing more accessible to businesses looking to switch to clean energy. Business owners can find financing through a third-party lender of their choice, then could qualify for a rate reduction through the Green Community program.

Virginia Solar Property Exemptions

Some states provide a state tax credit in addition to the federal tax credit. Unfortunately, Virginia does not have a statewide solar tax credit, but it does offer property tax exemptions to make going solar more appealing to homeowners throughout the state.

Under normal circumstances, any increase in value to your home — which will follow most home improvements — causes your property taxes to increase as well. Installing solar panels does cause your property value to increase in Virginia, but the Residential Solar Property Tax Exemption could prevent your taxes from getting bumped as a result. Over the lifetime of a system, this could save some homeowners thousands of dollars.

A property tax exemption is a common way for states to reduce the financial burden of going solar for homeowners. Virginia doesn’t have a statewide property tax exemption, but it does allow individual municipalities to offer this incentive. You can check with your city to see if you’re eligible for an exemption. If you aren’t, we encourage you to contact your local representatives and urge them to introduce this exemption in your area.

Net Metering in Virginia

Net metering is a billing policy designed to help property owners reduce or eliminate their electric bills. Normally, it can be quite difficult to provide constant power for your home with solar panels, as their efficiency decreases on cloudy days and they can’t produce power at night. You can pull power from the grid as required when your panels are underperforming, and through net metering, when your panels are producing more power than you need, you can send the excess back to the grid. When this happens, your utility company will give you credits for the power, which you can use toward your utility bills.

Virginia has a decent net metering policy to help customers eliminate their energy bills. Most homeowners in VA will be serviced by Dominion Energy, which has a great net metering policy. Dominion will purchase excess energy production at the full retail rate, which means anything you produce will offset any excess you pull from the grid on a one-to-one ratio in terms of kilowatt-hours.

Dominion is in the middle of changing its net metering policy, which could make it less appealing. However, installing solar sooner rather than later could get you grandfathered into the current policy.

Local Incentives

two people installing solar panels on a house

Some states’ municipalities and utility companies offer local rebate programs, which are often backed by the state. These programs typically either cover solar, specifically, or energy-efficiency upgrades that can be coupled with solar panel installation. Despite Virginia being a solar-friendly state, there are no local incentives available to homeowners beyond property tax exemptions. The only other incentive accessible in VA is the federal solar tax credit, which we’ll discuss below.

See also: Find out how much solar power your roof can produce with our solar calculator

Federal Solar Tax Credit

The federal solar investment tax credit, commonly abbreviated as the ITC, is a solar incentive offered to all Virginia residents by the federal government. The credit is applied to your federal income taxes owed for the year you install and commission your solar project. The amount of the credit varies between systems, as it will equal a massive 30% of your entire solar system cost. In Virginia, where the average system totals around $30,250, the ITC is hugely beneficial, with the average credit being $9,075.

The 30% federal solar tax credit applies to all residential solar installations in the U.S. through 2032. It is set to reduce to 26% for photovoltaic systems installed in 2033 and 22% in 2034. The credit is set to expire in 2035 unless Congress renews it.

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FAQ: Virginia Solar Incentives

The EcoWatch team gets questions about solar incentives available in Virginia regularly. Since you might have similar questions about how incentives and rebates in the state work, we’ll include some of the most commonly asked questions below. If you have specific questions that aren’t answered here, reach out to our team of solar experts at solar@ecowatch.com.

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Karsten Neumeister

Solar Expert

Karsten is a researcher, editor, writer and energy specialist focused on environmental, social and cultural development. Before joining EcoWatch, Karsten worked in the solar energy sector, studying energy policy, climate tech and environmental education. A lover of music and the outdoors, Karsten might be found rock climbing, canoeing or writing songs when away from the workplace.