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 and related equipment 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 removing the assessed value of your solar equipment from your taxable property value. The exemption lasts for a minimum of five years once approved. To qualify, homeowners must apply to their local building department for certification of their solar equipment, and their local government must have adopted an ordinance offering this tax exemption. If you install equipment and get certified within one year of installation, 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 credits for the clean energy they produce. When your solar system generates electricity, it creates Renewable Energy Certificates (RECs) that can be sold in the regional energy market. These certificates represent the environmental benefits of your solar production and provide an additional income stream beyond your electricity savings.

The program operates through the PJM Generation Attribute Tracking System (GATS), which tracks and verifies your solar production. While Virginia doesn’t have a separate SREC market with fixed pricing, homeowners can sell their RECs through brokers or aggregators who participate in the broader PJM regional market. The actual financial value varies based on market conditions and demand from utilities that need RECs to meet renewable energy requirements.

To participate, your solar system must be registered through GATS and receive a State Certification Number. Systems one megawatt or smaller (which includes all residential installations) receive special identifiers in the tracking system. The program has different eligibility rules for different time periods – currently, solar systems in Virginia or within the PJM region qualify, but requirements may change for 2025 and beyond. Homeowners should work with their solar installer or a REC aggregator to handle the registration process and ongoing REC sales.

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 utility grid and you receive credits on your electric 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 throughout the year, and at the end of each year, any remaining credits are either carried forward or paid out at Dominion’s avoided cost rate of approximately 3-5 cents per kWh. For Appalachian Power Company (APCo) customers, excess credits roll over indefinitely from month to month, providing ongoing value, though APCo does not pay out credits as cash. This program is available to residential solar customers of both utilities, and there are no specific deadlines mentioned for participation – the program operates continuously as long as net metering policies remain in effect.