Virginia Solar Panels

Virginia’s Solar Property Tax Exemption allows local governments to exempt solar energy equipment from property taxes. This means that when you install solar panels on your home, your locality may choose not to increase your property tax bill based on the added value of your solar system. Without this exemption, solar equipment could raise your home’s assessed value and result in higher annual property taxes.

The financial benefit depends on your local government’s decision to adopt this exemption. If your county, city, or town passes an ordinance offering this exemption, it must last for at least five years. Some localities offer a full exemption (100% of the solar equipment value is exempt from taxation), while others may offer a partial exemption. The actual dollar amount saved varies based on your solar system’s value and your local tax rate. For example, if your solar system adds $20,000 to your property value and your local tax rate is 1%, you could save $200 annually with a full exemption.

To qualify, you’ll need to apply to your local building department to have your solar equipment certified. The equipment must be designed and used primarily for collecting, generating, transferring, or storing solar energy. Systems up to 25 kilowatts are automatically exempt from state and local taxation, while larger systems may qualify if your locality has adopted the exemption ordinance. You should apply for certification within one year of installation—some localities will make the exemption retroactive to your installation date and reimburse any taxes you’ve already paid on the equipment.

It’s important to check with your local government to confirm whether they’ve adopted this exemption ordinance, as it’s optional for localities. The exemption applies only to the solar equipment itself, not your entire property. Once certified and approved, the exemption continues for the duration specified in your local ordinance, providing long-term property tax savings throughout your solar system’s lifetime.

Solar Renewable Energy Certificates (SRECs) are tradable credits that Virginia solar homeowners earn for the clean electricity their system produces. For every 1,000 kilowatt-hours (1 megawatt-hour) your solar panels generate, you earn one SREC that can be sold on the open market. These certificates help utilities meet Virginia’s Renewable Energy Portfolio Standard requirements, creating demand and value for your solar production.

The financial benefit varies based on market conditions, as SRECs are bought and sold through brokers, aggregators, or power purchase agreements. Virginia homeowners typically work with REC brokers or aggregators who handle the registration and sale process through the PJM-Environmental Information Services (PJM-EIS) tracking system called GATS. Your solar system must be located in Virginia or within the PJM region to qualify, and the renewable energy must meet state definitions outlined in Virginia law.

There are no application deadlines, as SRECs are generated automatically once your system is registered with GATS. The program operates under Virginia’s mandatory Renewable Energy Portfolio Standard, which has specific rules for different time periods—the current requirements extend from 2025 onward. Residential solar owners should know that while they can manage their RECs directly through the GATS system, most choose to work with a broker or aggregator who simplifies the process and handles the market transactions on their behalf.

Net metering in Virginia allows you to receive credit for the excess solar energy your system sends back to the electric grid. When your solar panels produce more electricity than your home uses, that surplus energy flows to the grid, and your utility company credits your account on a 1:1 basis—meaning you receive the same retail rate credit for the energy you export as you pay for the energy you import. This effectively turns your electric meter backward, reducing your monthly bill.

The specific benefits depend on your utility provider. If you’re a Dominion Energy customer, any excess credits you accumulate roll over month to month throughout the year. At the end of your annual billing cycle, you can either carry those remaining credits into the next year or receive a payout at Dominion’s avoided cost rate, which typically ranges from 3 to 5 cents per kilowatt-hour. If you’re served by Appalachian Power Company (APCo), your excess credits roll over indefinitely from month to month, though they won’t be paid out as a cash payment. Net metering is available to residential solar customers with both utilities, and there are no application deadlines—you can take advantage of this program whenever you install your solar system.