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.
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 Incentive||30% credit|
|Virginia Tax Credits / Rebates||None / none|
|Net Metering||Net metering at avoided cost rate; rolls over indefinitely|
|Renewable Portfolio Standard||100% by 2050|
|Property Tax Exemption||100%|
|Sales Tax Exemption||None|
|Performance Payment Program||SRECs at avoided cost rate|
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