Virginia Beach, VA

The Solar Property Tax Exemption in Virginia allows homeowners with qualifying solar energy systems to receive a reduction or complete exemption from property taxes on the value of their solar equipment. Under Virginia Code § 58.1-3661, solar facilities with a capacity of 25 kilowatts or less are automatically exempt from all state and local taxation. For larger systems, local governments can choose to offer full or partial property tax exemptions.

To qualify, homeowners must apply through their local building department, which will certify that the solar equipment meets state requirements. Once approved, the exemption applies to the next tax year and must be offered for at least five years. If you install solar and obtain certification within one year of installation, some localities may make the exemption retroactive to the installation date. The value of your solar equipment for tax purposes is typically based on the purchase and installation costs.

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-Environmental Information Services (PJM-EIS) Generation Attribute Tracking System (GATS), providing solar homeowners with additional income beyond electricity savings.

To participate, your solar system must be registered in the GATS system, which requires obtaining a State Certification Number. While Virginia doesn’t have a dedicated SREC market like some states, homeowners can sell their SRECs through registered brokers or aggregators in the broader PJM market. The program has specific eligibility periods with different requirements: 2021-2024 and 2025 onwards, with generation resources needing to be located either in Virginia or within the PJM region to qualify.

For residential solar owners, working with a broker or aggregator is typically the most practical approach, as they handle the complexities of SREC registration and sales. The value of SRECs fluctuates based on market conditions, so income from this program will vary over time. This program represents an opportunity to earn additional revenue from your solar investment while supporting Virginia’s renewable energy goals.

Virginia’s Net Metering program allows homeowners with solar panels to receive credit for the excess electricity they generate and send back to the grid. When your solar system produces more electricity than your home uses, your utility meter essentially runs backward, providing you with a credit for each kilowatt-hour (kWh) of excess energy. This credit is applied at a 1:1 ratio across all major Virginia utilities, meaning you receive the full retail value for the electricity you produce.

The financial benefit is substantial – for every excess kWh your system generates, you’ll receive a credit equal to what you would normally pay for that electricity (typically between 10-15 cents per kWh in Virginia). These credits can offset your electricity costs during times when your solar panels aren’t producing enough power, such as at night or on cloudy days.

All residential customers of Virginia’s major utilities (Dominion Energy, Appalachian Power, NOVEC, Rappahannock Electric, Shenandoah Valley Electric, and Danville Utilities) are eligible for net metering. Your system must be properly connected to the grid through an interconnection agreement with your utility.

How excess credits are handled varies by utility: Dominion Energy allows credits to roll over indefinitely or be paid out at 3-5 cents/kWh annually. Appalachian Power lets credits roll over indefinitely but doesn’t offer cash payments. NOVEC allows credits to carry over for two years before they expire. Rappahannock Electric pays out excess credits annually at about 2.6 cents/kWh. Shenandoah Valley Electric allows indefinite carryover, while Danville Utilities permits carryover if credits don’t exceed your annual consumption.

Before installing solar, it’s important to understand your specific utility’s policies regarding credit expiration and payout rates. Additionally, consider sizing your system appropriately based on your annual electricity usage to maximize the financial benefits of net metering while avoiding generating excessive credits that might be compensated at lower rates or potentially forfeited.