Alexandria, VA Solar Panels

Under Virginia Code §58.1-3661, any residential solar system up to 25 kW is fully exempt from the additional property tax that would otherwise apply to the increased home value your solar installation creates. Because solar panels can add $20,000–$25,000 or more to your home’s assessed value, this exemption can save homeowners in Alexandria $250–$750 or more per year in property taxes, depending on your locality’s tax rate — with zero paperwork required.

The exemption is automatic and statewide — there is nothing to apply for. Your local assessor is required to exclude the solar-added value from your taxable assessment. This means you get the full financial benefit of increased home equity without any corresponding increase in your annual tax bill.

Several Virginia localities go even further with additional or enhanced exemptions beyond the state mandate, including the City of Alexandria, Fairfax County, Loudoun County, Prince William County, and Albemarle County. Check with the City of Alexandria’s assessor’s office to see if any supplemental benefits apply to your solar installation.

Since 2017, Virginia has exempted solar energy equipment — including solar panels, inverters, racking hardware, and all associated components — from the state’s 5.3% sales tax. On a typical residential solar installation costing around $24,000–$25,000, this exemption translates to an immediate upfront savings of approximately $1,270–$1,325 at the time of purchase, with no application or paperwork required.

The exemption applies automatically at the point of sale when your solar installer purchases the equipment. Reputable installers will already factor this into your quoted system price, so you should never be charged Virginia sales tax on qualifying solar hardware. If you are purchasing equipment directly, make sure your supplier is aware of the exemption and applies it correctly.

This is a straightforward, one-time financial benefit that reduces your net system cost from day one. Combined with Virginia’s property tax exemption and net metering program, the sales tax exemption is one of several stacked incentives that improve the overall return on investment for going solar in Alexandria.

Under the Virginia Clean Economy Act (VCEA), utilities are required to source a growing percentage of their electricity from solar energy. To meet these mandates, they purchase Solar Renewable Energy Credits (SRECs) from solar system owners. You earn one SREC for every 1,000 kilowatt-hours (1 MWh) your system produces. A typical 10 kW residential system in Virginia generates roughly 12–14 SRECs per year. SRECs can be sold through brokers such as RECmint, SRECTrade, and Flett Exchange, and have recently traded in the range of $22.50–$33 per credit, generating approximately $270–$460 in annual income for a typical home system.

A significant market shift is underway in 2026: the Distributed Generation Expansion Act (effective July 1, 2026) raises the utility solar procurement requirement from 1% to 4.5%. SREC brokers active in Virginia estimate this change could lift SREC revenue by 60–90% over the following 18 months as utility demand for credits surges to meet the new target. Locked-rate contracts are also available — for example, 3-year contracts at approximately $23.50/SREC and 5-year contracts at approximately $22.50/SREC for distributed systems under 1 MW, providing income certainty if you prefer stability over variable market pricing.

To participate, you must own your solar system outright (leased systems are not eligible), complete the utility interconnection process, and register with an SREC aggregator or broker within the same calendar year as your interconnection date. The Virginia Solar Alternative Compliance Payment (SACP) — the penalty utilities pay if they fall short of their solar target — is set at $75 per SREC (as of 2021, increasing 1% annually), which effectively acts as a price ceiling for the market. SRECs are a passive, ongoing income stream that continues for the life of your system.

While the federal residential solar Investment Tax Credit (ITC) under Section 25D was eliminated for solar panels as of 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 installed cost of a new battery storage system with a capacity of 3 kWh or larger. On a typical home battery system costing $10,000–$15,000 installed, this credit can save $3,000–$4,500 directly off your federal income tax liability.

To qualify for the 2026 credit, the battery storage system must be installed as part of the same project as a solar panel installation — standalone battery-only 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 bill to zero but will not generate a refund. However, any unused credit can be carried forward to future tax years.

Virginia does not offer any state-specific battery storage incentive at this time, making the federal Section 25D credit the primary financial incentive available to Alexandria homeowners adding battery storage. If you are considering adding a battery to an existing solar system, consult a tax professional to confirm your eligibility, as the co-location requirement is strictly interpreted by the IRS for the 2026 tax year.

Virginia’s 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 any equipment on their own property. Subscribers receive monthly bill credits proportional to their share of the solar energy produced by the project, resulting in guaranteed savings of 10% or more — approximately $175 per year — with no upfront investment, no installation, and no maintenance responsibility. This makes solar accessible to renters, condo owners, and homeowners in Alexandria whose roofs are shaded or otherwise unsuitable for 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. Virginia’s original 200 MW shared solar program was fully awarded across 52 projects, so this expansion significantly broadens access for new subscribers.

Participants should be aware of a minimum monthly bill requirement of approximately $55, which covers utility infrastructure 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 or join a waitlist, contact Dominion Energy or APCo directly, or visit the Virginia Department of Energy’s shared solar page for a list of approved projects and administrators.

Dominion Energy’s Income and Age Qualifying Solar Program provides free rooftop solar photovoltaic (PV) system installations to eligible customers in Dominion’s Virginia service territory. All services — including installation, equipment, and ongoing maintenance — are provided at absolutely no cost to qualified participants. The program also includes a 25-year warranty covering maintenance and repairs, ensuring long-term energy savings without any financial burden on the homeowner.

To qualify, applicants must meet two criteria: (1) they must have previously participated in one of Dominion’s income-qualifying assistance programs, and (2) they must be 60 years of age or older with a total household income that does not exceed 120% of the Virginia median income as defined by the Virginia Department of Housing and Community Development income guidelines. This program is specifically designed to bring the benefits of solar energy to seniors on fixed incomes who might otherwise be unable to afford an installation.

If you believe you may qualify, contact Dominion Energy directly at 888-366-8280 (select option 2) for program details, eligibility confirmation, and to begin the application process. Availability may be subject to program funding and capacity limits, so it is advisable to inquire as early as possible.

Virginia’s 2025 Community Energy Act requires Dominion Energy to establish a Virtual Power Plant (VPP) program, which links many home battery storage systems together so the utility can draw on them collectively during high-demand periods — typically a few peak evenings per year. Dominion filed its pilot program with the Virginia State Corporation Commission (SCC) in December 2025 and expects to begin enrolling customers in late 2026, with payment amounts and tariff details expected to be published in fall 2026.

Here is how the program works: on high-demand evenings, your home battery sends a portion of its stored power back to the grid, down to a minimum reserve level that you set in advance — your backup protection is never compromised below that threshold. In return, you receive payments from Dominion for the energy you contribute across the season. The rest of the year, your battery operates entirely for your own home backup and self-consumption needs.

Because specific payment rates have not yet been published by Dominion, the exact financial benefit for Alexandria homeowners is not yet known. Homeowners who already own or are planning to install a battery storage system (such as a Tesla Powerwall or Enphase IQ Battery) should monitor Dominion’s website and SCC filings for enrollment announcements expected in fall 2026. Participation is expected to be voluntary, and your backup reserve settings will remain under your control at all times.