How to Save Money on Solar Panels In Virginia

Solar panels on the background of the image of the flag of State of Virginia

How to Save Money on Solar Panels In Virginia

As of 2023, Virginia produces nearly 4.4GW of solar energy, making it the 10th largest producer in the country. This number comes from a major shift in perspective toward renewable infrastructure. In the next few years, homeowners could have access to several incentives for solar panels in Virginia.

So if you’re looking to save money on an array, the Old Dominion is a great place to live. In this article, we walk you through the available incentives and what you can expect in the coming years. Don’t hesitate; let’s get started.

How to Save Money on Solar Panels in Virginia: Overview

Homeowners have plenty of reasons to switch to solar panels in Virginia. From decent equipment rates to high utility offsets, some may be able to save over $25,000 on their power bill over 25 years.

Despite relatively poor sunlight, state officials recognize the potential for solar energy in the Old Dominion. While Southern counterparts have yet to pursue renewable infrastructure, Virginia recently introduced an incredible set of renewable standards. These pave the way for solar incentives that will help residents invest in a home array. 

Here’s what Virginians have to look forward to.

Solar Panels in Virginia: Federal Incentive

Even before state-sponsored programs, homeowners in the Old Dominion need to take advantage of the federal solar tax credit. This incentive offers a 30% return on all purchases made toward a solar panel system. This includes equipment, labor, and even sales tax. Those purchasing a 6kW system could drop the initial investment cost by nearly $5,000.

However, it’s important to understand the prerequisites of the program before going forward with your installation. Primarily, you must own your system outright, either through purchasing or with a loan. You’ll also need to live at the house where it’s installed, and it must feature completely new equipment.

Virginians have a great opportunity to save money on solar panels with this return, but it won’t last forever. The offer in its current form only lasts until 2032. At that point, it begins to drop in value until it expires in 2035.

Virginia’s State Credits and Rebates

In general, the most direct support for home solar comes in the form of credits and rebates. If this is what you’re looking for in Virginia, you’re currently out of luck. However, don’t count them out just yet; these financial incentives may turn up in the next few years.

In the meantime, homeowners can take advantage of a pretty good net metering mandate. This regulation requires utility companies to reimburse connected homeowners for their excess solar energy.

Net metering for solar panels in Virginia has utility companies pay for your leftover power in the form of a credit toward your next month’s electricity bill. It comes at a rate of two cents per kW (the avoided cost) and rolls over indefinitely.

What makes this net metering program better than most is that you can opt to receive a check instead of a credit. By signing up for your utility’s performance program, you can choose to sell your credits for the same rate. So if you’re overproducing consistently, you may even earn a little bit every year.

Photo collage of solar panels, photovoltaics on the red roof of a house and a beautiful sky with the setting sun. Alternative electricity source. Concept of sustainable resources
Net metering for solar panels in Virginia allows homeowners to sell their credits back to utility companies for a check.

©Diyana Dimitrova/Shutterstock.com

Solar Panels in Virginia: Government Regulations

For many years, Virginia’s support for solar energy came voluntarily. However, in 2020, the Old Dominion flipped its stance completely, enacting one of the strongest renewable portfolio standards (RPS) in the country. We use a state’s RPS to determine its intention to invest in renewable infrastructure.

Virginia intends to increase its renewable power production by 3-4% each year, starting at 6% by 2021. This objective sets the state up to reach 100% by 2050. Only a handful of states have an RPS with a 100% objective. An impressive goal, especially for a Southern state, where renewable standards practically don’t exist.

What does this mean for homeowners? In the next few years, as utilities have increased pressure to provide clean energy, more financial incentives will appear. For example, in 2025, Dominion Power must source 75% of its RECs from RPS-eligible sources in Virginia. This means the company may offer solar programs to encourage residential solar arrays.

To get things started, the state offers a property tax exemption for homeowners making the switch. This can save Virginians around 4% on the increased value of their home for 20-25 years, resulting in thousands saved.

Should Virginians Lease Solar?

In many states, residents have the option to lease solar panels in cases where purchasing isn’t an option. This disqualifies the system from any incentives, such as the federal solar tax incentive, but provides an avenue for more affordable power. 

Virginia does allow solar leasing, and it presents an excellent opportunity to cut the cost of utilities. With some of the largest bills in the country, homeowners can save big even after lease payments.

If you prefer not to lease, however, the Old Dominion recently enacted its community solar program. This allows you to sign up for a solar garden in your area (with enough participants). After a monthly membership fee, you’ll receive clean energy at a discounted rate. And if the community system produces more power than needed, you’ll also get a credit toward your next month’s payment.

Solar Panels in Virginia: Incentive Summary

Federal Tax Incentive30% credit
Virginia Tax Credits / RebatesNone / none
Net MeteringNet metering at avoided cost rate; rolls over indefinitely
Renewable Portfolio Standard100% by 2050
Property Tax Exemption100%
Sales Tax ExemptionNone
Performance Payment ProgramSRECs at avoided cost rate

How to Save Money on Solar Panels In Virginia FAQs (Frequently Asked Questions) 

Do you actually save money by going solar in Virginia?

With decent equipment rates and high utility bills to offset, solar panels are valuable in Virginia. Those installing a 6kW system could save over 25,000 in electricity over 25 years.

How long does it take for solar panels to pay for themselves in Virginia?

With an average annual electricity bill of $1,649.04, Virginians could cover the cost of a 6kW system in about 9.7 years. However, many homeowners in the Old Dominion may need a larger array than normal, increasing that time.

How much do solar panels cost in Virginia?

In Virginia, homeowners can expect to pay about $2.66 per watt for solar energy. This equals around $15,960 for a 6kW system. The overall price can fluctuate with a variety of factors, including wattage, sunlight, location, equipment type, installation quality, and solar incentives.

Can I use the federal tax incentive in Virginia?

Those purchasing solar panels in Virginia can utilize the federal solar tax credit to lower their installation costs by 30%. Homeowners investing in a 6kW system could lower the initial price by nearly $5,000.

How does net metering work in Virginia?

In Virginia, net metering allows residential and commercial customers with solar or other renewable energy systems to receive credits on their utility bills for excess electricity they generate and feed back into the grid. These credits can be used to offset future electricity consumption, effectively allowing customers to “bank” excess energy and reduce their overall electricity costs.

Does Virginia have renewable portfolio standards (RPS)?

Virginia’s Renewable Portfolio Standard (RPS), requires that by 2050, a minimum of 100% of the electricity sold by Virginia’s electric utilities comes from clean and renewable sources. The law includes interim targets, such as achieving 10% renewable energy by 2022 and 30% by 2030.

Does Virginia have a community solar program?

Virginia authorized community solar programs through legislation passed in 2020. These programs allow multiple customers to subscribe to a shared solar installation and receive credits on their electricity bills for the power generated, providing access to solar energy for those who may not have suitable rooftops for solar panels.

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