Charlottesville, VA

Virginia’s Solar Property Tax Exemption allows homeowners with qualifying solar energy systems to receive a reduction or complete exemption from property taxes on the value of their solar equipment. Under this state program, solar installations with a capacity of 25 kilowatts or less are completely exempt from state and local taxation. For larger systems, local governments can choose to offer full or partial property tax exemptions.

To qualify, homeowners must apply through their local building department, which will certify that the solar equipment meets state requirements. Once approved, the exemption applies to the next tax year and must be granted for at least five years. If you install solar and obtain certification within one year of installation, some localities may make the exemption retroactive to the installation date. The value of your solar equipment for tax purposes is typically calculated based on the purchase and installation costs.

Solar Renewable Energy Certificates (SRECs) in Virginia represent the environmental benefits of solar energy production. When your solar system generates electricity, you earn one SREC for every megawatt-hour (1,000 kilowatt-hours) produced. These certificates can be sold through the PJM Generation Attribute Tracking System (GATS), creating an additional revenue stream beyond your electricity savings.

Virginia’s SRECs operate within the state’s Renewable Portfolio Standard (RPS) program, which requires utilities to source increasing amounts of renewable energy. While Virginia doesn’t have a separate SREC-specific market like some states, solar system owners can still sell their certificates through brokers or aggregators registered with PJM GATS. Homeowners with systems under one megawatt receive special identification in the GATS system, potentially making their SRECs more valuable to certain buyers.

To participate, you’ll need to register your solar system through the PJM-EIS GATS process and receive a State Certification Number. Many homeowners choose to work with a broker or aggregator to handle the selling process, as these companies specialize in bundling certificates from multiple small producers. The eligibility requirements for Virginia-qualifying RECs change after 2024, so it’s important to understand how these changes might affect the value of your SRECs in the future.

Virginia’s Net Metering program allows homeowners with solar panels to receive full credit for the excess electricity they generate and send back to the grid. Under this 1:1 net metering policy, for every kilowatt-hour (kWh) of solar energy you export to the grid, you receive a credit for one kWh on your electric bill. This essentially means your utility company acts like a virtual battery, storing your excess production for later use without any loss in value.

The program is available through all major Virginia utilities including Dominion Energy, Appalachian Power Company, Northern Virginia Electric Co (NOVEC), Rappahannock Electric Co (REC), Shenandoah Valley Electric Cooperative, and Danville Utilities. Each utility handles excess credits slightly differently at the end of your annual billing cycle. For example, Dominion Energy pays out unused credits at their avoided cost rate (approximately 3-5 cents/kWh), while Appalachian Power allows credits to roll over indefinitely without cash payouts.

There are important differences in how utilities handle long-term excess credits. NOVEC customers can carry credits for two years before they expire, REC customers receive payment for excess credits at roughly 2.6 cents/kWh annually, and Danville Utilities allows credits to carry forward only if they don’t exceed your previous 12 months of consumption. Understanding your specific utility’s policies is essential for maximizing the financial benefits of your solar investment.