Virginia Solar Panels

Virginia’s SREC program was created under the Virginia Clean Economy Act (VCEA) of 2020. For every 1,000 kWh (1 MWh) of electricity your solar panels generate, you earn one Solar Renewable Energy Certificate (SREC). Utilities are required to purchase these certificates to meet their Renewable Portfolio Standard (RPS) obligations, creating a real and ongoing market for your solar generation. A typical 6 kW residential system produces approximately 6–8 SRECs per year in Virginia.

Current SREC prices in Virginia range from approximately $22.50 to $35 per certificate, with a state-mandated price cap of $75 per SREC. Each SREC is valid for 5 years from the year it is generated, giving you flexibility in when to sell. An SREC broker or aggregator (such as SRECTrade or SolSystems) will typically handle the sale automatically on your behalf.

Any Virginia solar owner is eligible regardless of which utility serves their home. To participate, you must complete the utility interconnection process and register your system with an SREC aggregator or broker within the same calendar year as your interconnection date. The solar carve-out requirement under the RPS is set to increase from 1% to 3% in 2026 and to 5% in 2028, which is expected to sustain demand for SRECs going forward.

Virginia’s net metering program allows residential solar customers of Dominion Energy and Appalachian Power Company (APCo) to earn full retail-rate bill credits for any surplus electricity their system sends to the grid — a one-to-one transaction. Credits roll over monthly, and any unused credits remaining after a 12-month period can be carried forward or paid out at the avoided-cost rate. To participate, your system must be under 25 kW in capacity and cannot be sized to exceed 100% of your expected annual energy consumption based on your previous 12-month billing history.

Important 2026 Update: Both Dominion Energy and APCo have proposed changes to net metering compensation for new customers (NEM 2.0). Dominion’s proposal would shift to real-time (half-hourly) netting and base credit rates on distributed solar PPA rates rather than the full retail rate — potentially cutting the credit by nearly half. The State Corporation Commission (SCC) held an evidentiary hearing in January 2026 and is expected to issue a final order by mid-2026. Customers who install solar and connect to the grid before the SCC issues its final order will be grandfathered under the existing full retail-rate rules.

Participation is available on a first-come, first-served basis. The aggregate capacity limit is 6% of the prior year’s peak-load forecast, with 1% reserved for low-income customers and 5% available for all other customers. Income-eligible customers will have the option to install solar under either the current rules or the new ones. The program is governed by Virginia Code § 56-594 and overseen by the Virginia State Corporation Commission.

Effective January 1, 2023, Virginia law (SB 686, codified at Virginia Code § 58.1-3661) mandates a property tax exemption for residential and agricultural solar energy systems with a nameplate capacity of 25 kW or less. This means the added value that solar panels bring to your home is not subject to state or local real property taxes, preventing your property tax bill from increasing simply because you went solar.

The exemption follows a tiered structure tied to the age of your system: 80% of the system’s assessed value is exempt for the first five years of ownership; 70% is exempt for years six through ten; and 60% is exempt for the remainder of the system’s lifespan. This provides meaningful, long-term property tax savings throughout the life of your solar installation.

Several Virginia localities offer additional or enhanced solar property tax exemptions beyond the state mandate, including Fairfax County, Loudoun County, Prince William County, the City of Alexandria, Albemarle County, and others. The City of Charlottesville, for example, offers a property tax credit of up to 0.98% annually for five years on the system’s value. Check with your local county or city tax administration office to understand the specific exemption or credit available in your jurisdiction, as application requirements vary by locality.

While the federal Residential Clean Energy Tax Credit (Section 25D) for solar panels was eliminated effective January 1, 2026, the battery storage portion of this credit remains available for qualifying installations in 2026. Homeowners can claim a 30% federal tax credit on the full cost of a new battery storage system with a capacity of 3 kWh or larger. For a typical home battery system costing $10,000–$15,000, this credit can save homeowners $3,000–$4,500 on their federal income taxes.

To qualify for the 2026 credit, the battery storage system must be installed alongside solar panels as part of the same project. Standalone battery installations without a co-located solar system do not qualify under the residential Section 25D credit. The credit is non-refundable, meaning it can reduce your federal tax liability to zero but will not result in a refund; however, any unused portion may be carried forward to future tax years.

It is important to consult a qualified tax professional to confirm your eligibility and ensure proper documentation. The credit is claimed using IRS Form 5695. Note that battery systems installed through a third-party solar lease or Power Purchase Agreement (PPA) do not qualify for the homeowner credit, as the tax benefit flows to the system owner (the leasing company) rather than the subscriber.

The Virginia Shared Solar Program allows any retail customer of Dominion Energy or Appalachian Power Company (APCo) to subscribe to a portion of a larger, off-site solar facility without installing panels on their own property. Subscribers receive credits on their monthly electricity bills based on their proportional share of the solar energy produced, resulting in guaranteed savings of 10% or more — approximately $175 per year — with no upfront investment or installation required. This makes solar accessible to renters, condo owners, and homeowners whose roofs are not suitable for solar panels.

The program is expanding significantly in 2026. Legislation (SB 254/HB 807) authorizes Dominion Energy to release an additional 525 MW of shared solar capacity by July 1, 2026, with a dedicated portion reserved for low-income subscribers. For APCo, legislation (SB 255/HB 809) directs the release of an additional 50 MW by July 1, 2026, and a further 50 MW by January 1, 2028. At least 40% of each shared solar facility’s capacity must be allocated to customers with subscriptions of 25 kW or less.

Participants should be aware of a minimum monthly bill requirement of approximately $55, which covers utility infrastructure and service costs. Low-income customers are exempt from this minimum bill charge. Dominion Energy also applies a 1% Net Crediting Fee to process shared solar credits. To enroll, contact your utility directly or visit the Virginia State Corporation Commission’s shared solar page for program details and current availability.

Virginia’s Commercial PACE (Property Assessed Clean Energy) program, administered through the VirginiaSAVES Green Community Program by the Virginia Department of Energy, provides property-secured financing for clean energy improvements including solar panels and battery energy storage systems. The financing is repaid as an assessment on the property’s tax bill, making it transferable if the property is sold. This structure allows commercial, industrial, and nonprofit property owners to fund 100% of eligible project costs with no upfront payment required.

Financing terms can extend up to 30 years, and because the loan is tied to the property rather than the borrower’s credit, it can be easier to qualify for than traditional financing. This makes it an attractive option for businesses and nonprofits looking to go solar without impacting their operating budgets or credit lines. Both new construction and retrofits of existing buildings are eligible under the program.

Eligibility is limited to commercial, industrial, and nonprofit property owners located in Virginia localities that have adopted the PACE enabling legislation. Interested property owners should contact the Virginia Department of Energy or the VirginiaSAVES program administrator to confirm their locality’s participation and begin the application process. This program is not available to residential homeowners.

The USDA Rural Energy for America Program (REAP) is a federal program that promotes renewable energy adoption for agricultural producers and rural small businesses through grants and loan guarantees. In Virginia, eligible applicants can use REAP funding to purchase and install solar photovoltaic systems, as well as other renewable energy technologies such as wind, biomass, and geothermal. The program can cover a significant portion of project costs, making solar more financially accessible for farms and rural businesses that might not otherwise be able to afford the upfront investment.

REAP grants can cover up to 50% of eligible project costs, while loan guarantees can cover up to 75% of eligible costs. Applicants may combine both a grant and a loan guarantee for the same project. Eligible applicants include agricultural producers (farmers and ranchers) with at least 50% of their gross income from agricultural operations, and small businesses located in rural areas as defined by USDA guidelines.

Applications are accepted on a rolling basis through USDA Rural Development state offices. Virginia applicants should contact the Virginia USDA Rural Development office or visit the USDA Rural Development website for current application deadlines, funding availability, and eligibility requirements. This program is administered federally but available to qualifying Virginia residents and businesses.