Richmond, VA

Virginia’s Solar Property Tax Exemption allows homeowners to reduce or eliminate property taxes on their solar energy systems. Under this state program, solar equipment is classified as a separate property category, and local governments can choose to exempt this equipment from property taxation through local ordinances.

For residential systems up to 25 kilowatts, the equipment is completely exempt from state and local taxation. For larger systems, the tax benefit is determined by your local government, but must be granted for at least five years. The exemption applies to the value of your solar equipment, which is typically calculated based on the purchase and installation costs. To qualify, you’ll need to apply through your local building department, who will certify that your system meets the requirements. If you install and obtain certification within one year, some localities may make the exemption retroactive to your installation date.

Solar Renewable Energy Certificates (SRECs) in Virginia represent the environmental attributes of solar energy production. When your solar system generates electricity, you earn one SREC for each megawatt-hour (1,000 kilowatt-hours) produced. These certificates can be sold separately from the electricity itself, creating an additional revenue stream for solar system owners.

Virginia’s SRECs are managed through the PJM-Environmental Information Services (PJM-EIS) Generation Attribute Tracking System (GATS). As a homeowner, you can register your system through this platform and either manage your SRECs yourself, work with a broker/aggregator, or include them in a Power Purchase Agreement. While Virginia doesn’t currently have a separate SREC-specific market like some other states, certificates can still be sold in the broader renewable energy certificate marketplace.

To be eligible, your solar system must be located in Virginia or within the PJM region (which covers much of the mid-Atlantic). The system must also meet Virginia’s definition of “renewable energy” as outlined in state code. Note that the eligibility requirements for Virginia-qualifying RECs are divided into two distinct periods: 2021-2024 and 2025 onwards, with different rules applying to each timeframe.

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 utility bill. This essentially means your utility meter runs backward when your solar system produces more electricity than you’re using, helping to offset the cost of electricity you draw from the grid when your system isn’t producing enough.

The financial benefit varies by utility company, but all major Virginia utilities offer the same 1:1 credit rate. For example, if your electricity rate is 12 cents per kWh, you’ll save 12 cents for every kWh your solar panels produce that offsets your usage. Excess credits carry over from month to month, allowing you to build up credits during sunny months to use during periods of lower solar production.

Each utility in Virginia handles year-end excess credits differently. Dominion Energy customers can either roll credits to the next year or receive payment at about 3-5 cents per kWh. Appalachian Power Company rolls credits over indefinitely but doesn’t offer cash payments. Northern Virginia Electric Co. allows credits to carry forward for two years before they expire. Rappahannock Electric Co-op pays out excess credits annually at their avoided cost rate (approximately 2.6 cents/kWh as of 2019).

To be eligible for net metering in Virginia, you must have a properly installed solar PV system that meets your utility’s interconnection requirements. There are no specific deadlines to enroll in net metering, but it’s important to apply for interconnection with your utility before or during your solar installation process. The system size is typically limited to meeting your annual electricity needs, so oversizing your system may not provide additional financial benefits under these programs.