Virginia

Virginia’s Solar Property Tax Exemption allows local governments (counties, cities, and towns) to exempt solar energy equipment from property taxes. This means homeowners can potentially avoid paying property taxes on the added value that solar panels bring to their home. The exemption applies to certified solar energy equipment, facilities, or devices that are designed and used primarily for collecting, generating, transferring, or storing thermal or electric energy.

The financial benefit varies by location since each local government decides whether to offer the exemption and how much to exempt (partial or full). When available, the exemption reduces your property tax bill by the amount you would have paid on the assessed value of your solar equipment. The exemption lasts for at least five years once approved. To qualify, you must apply to your local building department for certification within one year of installation, and your solar equipment must meet state requirements. If you obtain certification within one year and have already paid taxes on the equipment, your locality may reimburse those taxes. This incentive requires your local government to have adopted an ordinance offering the exemption, so availability depends on where you live in Virginia.

Virginia’s Solar Renewable Energy Certificates (SRECs) program allows homeowners with solar panels to earn additional income by selling certificates that represent the environmental benefits of their clean energy production. Under Virginia’s mandatory Renewable Energy Portfolio Standard, each megawatt-hour of solar electricity you generate creates one REC that can be sold in the PJM regional market. While Virginia doesn’t operate a separate SREC market like some other states, homeowners can sell their RECs through brokers or aggregators registered with the PJM Generation Attribute Tracking System (GATS).

The financial value of RECs varies based on market demand and is not set by the state – prices fluctuate according to supply and demand in the regional market. To participate, your solar system must be registered through the GATS system, which requires obtaining a State Certification Number from PJM-EIS. Systems one megawatt and smaller (which includes all residential installations) receive special identifier codes in the tracking system. You can choose to manage your RECs yourself through the GATS platform, work with a broker or aggregator to sell them, or bundle them with your energy sales if you have a power purchase agreement.

Important considerations include that RECs from 2021-2024 must be generated by systems located either in Virginia or within the broader PJM region, with different eligibility rules applying from 2025 onward. The program operates on an ongoing basis with no specific deadlines, but the regulatory framework has evolved over time and may continue to change as Virginia’s clean energy policies develop.

Net metering in Virginia allows homeowners with solar panels to receive credit for excess electricity they generate and send back to the power grid. When your solar system produces more energy than your home uses, the extra power flows to the grid and you receive credits on your electric bill at the same rate you pay for electricity (1:1 credit ratio). This means every kilowatt-hour (kWh) of solar energy you send to the grid reduces your future electric bills by the same amount you would normally pay for that electricity.

The financial benefits vary depending on your utility company. If you’re served by Dominion Energy Virginia, any unused credits can roll over month to month throughout the year. At the end of each year, remaining credits either carry forward or get paid out at Dominion’s avoided cost rate (approximately 3-5 cents per kWh). For Appalachian Power Company (APCo) customers, excess credits roll over indefinitely from month to month, but the utility does not provide cash payments for unused credits. This program is available to residential customers who install qualifying solar energy systems, though specific system size limits and interconnection requirements apply through your local utility company.