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. Some localities may make the exemption retroactive to your installation date and reimburse any taxes already paid on the solar equipment.

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 work with REC brokers or aggregators to sell their certificates, creating an ongoing revenue stream beyond the electricity savings from their solar system.

The financial value of Virginia RECs varies based on market conditions and is determined through the competitive PJM market rather than a fixed state price. Homeowners with solar systems must register their installations through the PJM Generation Attribute Tracking System (GATS) to participate, and systems must be located in Virginia or within the PJM region to qualify. The program operates under different rules for 2021-2024 versus 2025 and beyond, with updated eligibility requirements taking effect in 2025. Small residential solar owners typically work with third-party aggregators to manage the REC sales process, as individual homeowners rarely handle REC transactions directly due to the complexity of the market system.

Net metering in Virginia allows homeowners with solar panels to receive credit for excess electricity they generate and send back to the grid. When your solar system produces more power than your home uses, that extra energy flows to the electrical grid and you receive credits on your utility bill at the full retail rate (1:1 credit). During times when your solar panels aren’t producing enough power, like at night or on cloudy days, you can use these credits to offset the cost of electricity you draw from the grid.

The financial benefit varies by utility company in Virginia. If you’re served by Dominion Energy, excess credits roll over month to month and can carry into the next year. At the end of each year, any remaining credits are paid out at Dominion’s avoided cost rate, which typically ranges from 3-5 cents per kWh. If you’re served by Appalachian Power Company (APCo), your excess credits roll over indefinitely without expiration, though they won’t be paid out as cash. This program is available to homeowners who install qualifying solar energy systems and connect them to the utility grid through proper interconnection agreements with their utility company.