Solar Guide

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 separately from the electricity itself. These certificates help utilities meet their required renewable energy targets.

The financial value of SRECs varies based on market demand, as there is no fixed price set by the state. Homeowners can sell their SRECs through brokers, aggregators, or include them as part of power purchase agreements with their utility company. The program operates through the PJM Generation Attribute Tracking System (GATS), which verifies and tracks all renewable energy certificates. Your solar system must be located in Virginia or within the PJM region to qualify, and you’ll need to register your system through the GATS process to start earning SRECs.

Important considerations include that eligibility requirements differ for two time periods: 2021-2024 and 2025 onward, with updated rules taking effect in 2025. Small residential solar owners typically work with REC brokers or aggregators to manage the selling process, as the market can be complex to navigate independently. The program has no specific expiration date, but the regulatory framework continues to evolve as Virginia advances its clean energy goals.

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 a 1:1 rate – meaning you get full retail value for every kilowatt-hour (kWh) you contribute.

The financial benefit varies by utility company. With Dominion Energy Virginia, any unused credits roll over month to month, and at the end of each year, excess credits are either carried forward or paid out at Dominion’s avoided cost rate (approximately 3-5 cents per kWh). Appalachian Power Company (APCo) customers can roll over credits indefinitely without any annual payout, though credits cannot be cashed out as a check. This system essentially allows your electric meter to ‘spin backwards’ when your solar panels produce more energy than you use, reducing your overall electricity costs throughout the year.