Virginia Solar Incentives, Tax Credits & Rebates (2024 Guide)
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Virginia offers a range of solar incentive programs designed to make the transition to clean energy more affordable. We’ve analyzed more than 50 solar incentive programs across the country and found Virginia’s to be robust.
Our guide highlights Virginia’s solar incentives at the federal, state, and local level. Top solar companies can also help you determine which incentives are available for your solar project.
What Are Virginia’s Solar Tax Credits and Rebates?
Virginia has an excellent net metering program and a unique VirginiaSAVES Green Community Program financing option for business owners. Learn more about these incentives and others you can apply for below.
Virginia Property Tax Exemption for Solar Equipment
Solar panels increase home value by roughly $15,000, which can significantly raise your property taxes. However, Virginia allows any county, city, or town to waive (or partially waive) local property taxes for residential solar energy equipment. This means that if you own a $350,000 home and install a solar power system, you’ll still be taxed for a home value of $350,000 rather than $365,000. Living in a location with a property tax rate of 0.75% saves you $112 per year because the rate applies to the original property value of $350,000.
The amount of your property tax exemption will vary based on local Virginia legislation for your ZIP code. We recommend working with a professional solar installation company to help you obtain this incentive.
More resources: Database of State Incentives for Renewables and Efficiency (DSIRE) page
VirginiaSAVES Green Community Program
If you’re a business owner or operate a nonprofit, you can use the VirginiaSAVES Green Community Program. This program offers low-interest financing for energy efficiency, renewable energy, and electric vehicle (EV) charging projects. The exact incentives vary by project. The program helps reduce energy consumption and emissions, stimulates economic development, and enhances business competitiveness.
More resources: VirginiaSAVES website
How Much Is the Federal Solar Tax Credit?
All Virginia homeowners can qualify for the federal solar investment tax credit (ITC). This federal incentive program provides a deduction on your federal taxes equal to 30% of your solar panel installation costs.
You apply for this credit during tax time to reduce or eliminate your owed federal taxes. Any remaining credits can roll over to the next tax period. The ITC is limited to customers who own solar systems, which requires a cash purchase or solar loan. You won’t qualify if you have a solar lease or power purchase agreement. This credit decreases to 26% in 2033 and 22% in 2034.
Is Net Metering Available in Virginia?
Net metering is a billing policy that helps Virginia homeowners reduce or eliminate their monthly electric bills. This arrangement lets you send excess energy back to the grid when your solar panels produce more power than you need. Virginia offers net metering for home solar systems with up to 25 kilowatts (kW) of capacity. Dominion Energy has one of the most popular net metering programs.
Virginia also has a solar renewable energy credit (SREC) program, where solar owners receive an SREC for every 1,000 kilowatt hours that their solar system produces. On average, a 6 kW system will produce 6–8 SRECs per year in Virginia. As of 2023, each SREC can sell for around $45–$70. SRECs are market commodities, and their prices rise and fall depending on supply and demand. You must register with an SREC broker after your solar system is up and running.
What Are the Average Solar Costs in Virginia?
The national average cost for a 6 kW solar panel system is $17,640* before applying solar incentives. Most solar installers price systems based on their wattage, with the average installation price being $3–$4 per watt. The average price of a 6 kW system in Virginia is $18,240. Applying the federal solar tax credit reduces this price by $5,472 for a total of $12,768.
Your solar panels’ overall cost and return on investment (ROI) depend on which solar financing option you use. We’ve explained these options in detail below.
- Cash purchase: This option provides the best ROI and long-term savings. Paying for the system up-front eliminates interest rates, credit checks, and loan fees. You also own your system and qualify for all solar incentives and rebates.
- Solar loan: A solar loan is the second-best payment option. It’s best for homeowners who don’t want to or can’t afford a large up-front investment. Instead, you pay monthly installments over a fixed period. Keep in mind that you’ll pay more for your system in total due to interest rates.
- Solar lease: A solar lease lets you rent your system rather than buy it. We recommend this option for homeowners who don’t qualify for loans or can’t afford a large cash purchase. A solar lease disqualifies you from incentives because the solar company owns the system.
- Power purchase agreement (PPA): A PPA is an arrangement where you pay only for your monthly energy use. Think of it as if you’re still paying your regular electric bill, but for solar energy. Some PPAs even include system maintenance and repairs. Unfortunately, PPAs don’t grant you system ownership and disqualify you from using any tax incentives.
*All cost figures are based on a 2023 report from EcoWatch.
Is Going Solar in Virginia Worth It?
Going solar is worth it for Virginia residents. Installing a solar panel system is a large investment that can return big savings. Virginia offers solid incentives, ample sunlight, and a payback period of six to 10 years, which is the national average. The state’s net metering program allows you to generate additional savings and income after passing the payback period.
Our Conclusion
Virginia is a great state to go solar. It has quality net metering programs and tax exemptions to make the initial investment more affordable. Working with one of the best solar companies in Virginia will ensure you can take advantage of all available incentives and maximize your savings.
Your local municipality and utility company may offer additional incentives not mentioned in this guide. We recommend checking DSIRE for more information.
Use our tool below to connect with solar installers that service your address and get free quotes.
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FAQ About Solar Tax Incentives in Virginia
What is the payback period for solar panels in Virginia?
The expected payback period for solar panels in Virginia is within the average time frame of six to 10 years. Your exact payback period depends on your system’s efficiency, selected financing option, and other factors.
Do solar panels work when the power goes out?
If the grid goes down, you’ll need a battery for backup power. When you lose power, the panels must also shut off to protect electric utility lineworkers.
How many batteries do you need to live off the grid?
The number of batteries needed to live off-grid depends on the solar production on the shortest day of the year and the amount of power you consume.
Our Rating Methodology
We are committed to providing comprehensive and unbiased reviews to our readers. After over a thousand hours of research on solar companies, interviews with experts, and common customer needs, we’ve created a detailed rating system for solar providers based on six factors:
- Solar equipment, installation, and services (25%)
- Warranty and performance guarantees (25%)
- Brand reputation and certifications (15%)
- Financing options (15%)
- Experience (10%)
- Availability (10%)
Total scores are divided by 20 for a final 5-point rating scale.
To share feedback or ask a question about this article, send a note to our Reviews team at reviews@thisoldhousereviews.com.
