Roanoke, 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, giving local governments the authority to exempt this equipment from property taxation through local ordinances.

For residential systems up to 25 kilowatts DC, the equipment is completely exempt from state and local taxation. For larger systems, the tax benefit depends on your local government’s ordinance, 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 must apply through your local building department, which will certify that your system meets the state’s requirements. If you install solar and obtain certification within one year, some localities may make the exemption retroactive to your installation date and reimburse any taxes already paid.

Virginia’s Solar Renewable Energy Certificates (SRECs) program allows homeowners with solar installations to earn certificates for the clean energy they produce. Each SREC represents 1 megawatt-hour (MWh) of solar electricity generation. These certificates can be sold through the PJM Generation Attribute Tracking System (GATS), providing solar owners with additional income beyond electricity savings.

While Virginia doesn’t have a separate SREC-specific market like some other states, solar system owners can still register their RECs through PJM-EIS GATS and sell them through brokers or aggregators. The value of SRECs varies based on market conditions. Homeowners should note that the program has different eligibility requirements for two distinct periods: 2021-2024 and 2025 onwards, with generation resources needing to be located either in Virginia or within the PJM region. For assistance with registration and selling SRECs, homeowners can contact PJM-EIS directly or work with one of the registered REC brokers in 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. Under this 1:1 net metering policy, for every kilowatt-hour (kWh) of electricity your solar system sends to the grid, you receive a credit for one kWh on your utility bill. This essentially means your electric meter runs backward when your system produces more electricity than you’re using, helping to offset the cost of electricity you draw from the grid when your solar panels aren’t producing enough.

The financial benefit varies by utility company, but all major Virginia utilities offer the same 1:1 credit rate. Excess credits can be carried over from month to month, allowing you to build up credits during sunny months to use during less productive periods. However, what happens to unused credits at the end of the year differs by utility: Dominion Energy offers payment at their avoided cost rate (approximately 3-5 cents/kWh), Rappahannock Electric Co. pays around 2.6 cents/kWh, while other utilities like Appalachian Power allow indefinite rollover or have specific forfeiture policies after a certain period.

To be eligible for net metering in Virginia, you must be a customer of a participating utility with a properly installed and interconnected solar PV system. There are no specific deadlines for enrolling in net metering, but it’s important to understand your specific utility’s policies regarding credit expiration and compensation rates. Additionally, homeowners should be aware that each utility may have system size limitations and specific interconnection requirements that must be met before your system can qualify for net metering benefits.