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 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 the amount you would have paid on the assessed value of your solar equipment. The exemption lasts for at least five years once approved. To qualify, you must apply to your local building department for certification within one year of installation, and your solar equipment must meet state requirements. If you obtain certification within one year and have already paid taxes on the equipment, your locality may reimburse those taxes. This incentive requires your local government to have adopted an ordinance offering the exemption, so availability depends on where you live in Virginia.

Virginia’s Solar Renewable Energy Certificates (SRECs) program allows homeowners with solar panels to earn additional income by selling certificates that represent the environmental benefits of their clean energy production. Each time your solar system generates 1,000 kilowatt-hours (1 megawatt-hour) of electricity, you earn one REC that can be sold in the PJM regional market. These certificates help utilities meet Virginia’s renewable energy requirements while providing you with an ongoing revenue stream from your solar investment.

The financial value of RECs varies based on market demand and can be sold through brokers, aggregators, or as part of power purchase agreements. Virginia doesn’t operate a separate SREC market with set prices, so the value fluctuates with regional market conditions. To participate, your solar system must be registered through the PJM Generation Attribute Tracking System (GATS), which tracks and verifies your renewable energy production. For systems installed between 2021-2024, your solar panels must be located in Virginia or within the PJM region, while systems installed in 2025 and beyond have additional location requirements. There are no specific deadlines to join the program, but you’ll need to register your system with GATS and may want to work with a registered broker or aggregator to help manage and sell your RECs effectively.

Net metering in Virginia allows homeowners with solar panels to receive credit for excess electricity they generate and send back to the power grid. When your solar system produces more energy than your home uses during sunny periods, that extra power flows to the grid and you receive a 1:1 credit on your electric bill – meaning you get full retail rate credit for every kilowatt-hour (kWh) you contribute.

The financial benefit varies by utility company. With Dominion Energy Virginia, you can carry excess credits from month to month throughout the year. At the end of each year, any remaining credits either roll over to the next year or are paid out at Dominion’s avoided cost rate of approximately 3-5 cents per kWh. Appalachian Power Company (APCo) customers can carry credits forward indefinitely without annual true-ups, though credits are not paid out as cash. This system essentially allows your electric meter to ‘spin backwards’ when you’re producing more than you’re using, reducing your overall electricity costs and potentially eliminating your electric bill during high-production months.