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. 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 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 homeowners can register their solar systems through the PJM Generation Attribute Tracking System (GATS) to start earning RECs. Your solar system must be located in Virginia or within the PJM region to qualify, and the program operates under Virginia’s mandatory Renewable Energy Portfolio Standard. While there’s no separate SREC market specifically in Virginia, your RECs can be sold in the broader PJM market, and you can choose to self-manage your certificates or work with registered brokers and aggregators to handle the sales process.

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, the extra power flows to the grid and you receive credits on your electric bill at a 1:1 rate – meaning you get full retail value for every kilowatt-hour (kWh) you contribute.

The financial benefit varies by utility company. With Dominion Energy, excess credits roll over month to month, and at the end of each year, remaining credits are either carried forward or 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 any cash payout option. This means your solar system can effectively turn your electric meter backward when producing excess power, reducing your overall electricity costs.

Net metering is automatically available to solar customers in Virginia without special applications or deadlines. However, the specific terms depend on your utility provider, so it’s important to understand which company serves your area. This program makes solar installations more financially attractive by ensuring you receive value for all the clean energy your system produces, even when you’re not home to use it immediately.