Norfolk, VA

Virginia’s Solar Property Tax Exemption allows homeowners with qualifying solar energy systems to reduce or eliminate the property taxes associated with their solar installation. Under this state program, solar equipment is classified as a separate property class, giving local governments the authority to exempt this value from property taxation.

For residential systems up to 25 kilowatts DC, the equipment is completely exempt from state and local taxation. For larger systems, local governments can choose to offer full or partial exemptions. When approved, the tax benefit applies to the value of your solar equipment, reducing either your real property tax or machinery and tools tax (your choice). The exemption lasts for at least five years and can be applied retroactively if you obtain certification within one year of installation. To qualify, you must apply through your local building department, which will certify that your system meets the state’s requirements.

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 kWh) produced. These certificates can be sold through the PJM Generation Attribute Tracking System (GATS) marketplace to utilities that need them to meet state renewable energy requirements.

While Virginia doesn’t have a dedicated SREC market like some other states, solar system owners can still register their system with PJM-EIS to receive certificates. The financial value of SRECs varies based on market conditions, but they provide an additional revenue stream beyond electricity savings. Homeowners typically work with a broker or aggregator to sell their SRECs, as the process can be complex for individual sellers. Your solar installer can often recommend reputable SREC aggregators serving Virginia.

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. With this 1:1 net metering benefit, for every kilowatt-hour (kWh) your solar system exports to the grid, you’ll receive a credit for one kWh on your utility bill. This essentially means your utility company acts like a free battery storage system, letting you build up credits when your system produces more than you need and use those credits when your system isn’t generating enough power.

The program is available to customers of all major Virginia utilities including Dominion Energy, Appalachian Power Company, Northern Virginia Electric Co, Rappahannock Electric Co, 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 customers can either roll over credits to the next year or receive payment at about 3-5 cents per kWh, while Appalachian Power customers can roll over credits indefinitely but won’t receive cash payments. Other utilities have their own specific policies regarding credit expiration or payout rates.

To participate, you’ll need to have a properly installed and inspected solar system connected to your utility’s grid. There’s no specific deadline to enroll in net metering, but understanding your utility’s specific policy on excess credits is important for maximizing your financial benefits. For instance, some utilities like Northern Virginia Electric Co allow credits to carry over for two years before they expire, while others like Rappahannock Electric Co will pay you for excess credits annually at their avoided cost rate (approximately 2.6 cents/kWh as of 2019).