Virginia

Virginia’s Solar Property Tax Exemption allows homeowners with qualifying solar energy systems to receive a reduction or complete exemption from property taxes on their solar equipment. Under this state program, solar installations with a capacity of 25 kilowatts DC or less are automatically 100% exempt from state and local taxation. For larger systems, local governments can choose to offer partial or full exemptions through local ordinances.

To qualify, homeowners must have their solar equipment certified by their local building department. Once approved, the exemption applies to the value of the solar equipment, reducing either your real property tax or machinery and tools tax (your choice). The exemption must be granted for at least five years. If you install solar and obtain certification within one year, some localities may make the exemption retroactive to your installation date. The value of your solar equipment for tax purposes is typically based on the purchase and installation costs.

Solar Renewable Energy Certificates (SRECs) in Virginia represent the environmental benefits of solar energy production. When your solar system generates electricity, you earn one SREC for every megawatt-hour (1,000 kWh) produced. These certificates can be sold through the PJM Generation Attribute Tracking System (GATS) marketplace, providing additional income beyond your electricity savings.

While Virginia doesn’t have a separate SREC-specific market like some states, solar system owners can still register their SRECs through PJM-EIS GATS. You can manage these certificates yourself, work with a broker/aggregator, or include them in a Power Purchase Agreement. The value of SRECs varies based on market conditions, and Virginia has specific requirements for eligible renewable energy sources that change between two periods: 2021-2024 and 2025 onwards.

To participate, solar system owners must register through the GATS process and receive a State Certification Number. Smaller installations (under one megawatt) and low-income qualifying projects receive special identification in the system. Homeowners should note that while this program provides an opportunity for additional revenue, the process typically requires working with a broker for residential-scale systems.

Virginia’s Net Metering program allows homeowners with solar panels to receive full credit for the excess electricity they generate and send back to the grid. Under this 1:1 net metering policy, for every kilowatt-hour (kWh) of electricity your solar system sends to the grid, you receive a credit for one kWh on your utility bill. This essentially allows your electric meter to run backward when your system produces more power than you’re using, helping maximize your solar investment.

The program is available through all major Virginia utilities including Dominion Energy, Appalachian Power Company, NOVEC, Rappahannock Electric Co, Shenandoah Valley Electric Cooperative, and Danville Utilities. Each utility handles excess credits slightly differently at the end of the annual billing cycle. For example, Dominion Energy offers payment for unused credits at their avoided cost rate (approximately 3-5 cents/kWh), while Appalachian Power allows credits to roll over indefinitely but doesn’t offer cash payments.

To participate, you must be a residential customer with a properly installed and inspected solar system that meets your utility’s interconnection requirements. There’s no specific deadline to enroll, but it’s best to apply for net metering when installing your solar system. The program has no set expiration date, though specific terms may change as state energy policies evolve.

Important considerations: Some utilities have different policies for handling year-end excess credits. For instance, NOVEC allows credits to carry over for two years before they expire without compensation, while Rappahannock Electric pays for excess credits annually at their avoided cost rate (approximately 2.6 cents/kWh as of 2019). Understanding your specific utility’s policy is essential for maximizing your solar investment’s value.