4 Major Incentives When Going Solar in Virginia

Virginia, known for its rich history and diverse landscapes, offers residents the best of both urban and rural living. When Virginia residents use green energy by installing solar panels on their roofs, they help the state continue toward its goal of preserving its natural beauty and becoming a cleaner state.  

 

Along with participating in the green movement, going solar offers Virginia homeowners many different solar incentives. We’re here to help you explore the incentives available once you’ve adopted clean, renewable energy, so you can maximize the benefits and get the most out of your solar panel system. 

 

Virginia offers three main state-wide incentives for going solar: 

 

• A Residential Property Tax Exemption
• Net Metering Programs and Policies
• Solar Renewable Energy Certificates (SRECs)

 

The Virginia Clean Economy Act, passed in April 2020, requires that investor-owned utility companies in Virginia use 100% clean electricity sources by 2050, ensuring net metering and SREC policies will continue. All of these options can also be combined with the 30% federal solar tax credit.

 

Let’s explore each of these solar incentive programs.

Residential Property Tax Exemption

Adding solar panels to your home increases the value of your property. However, the state of Virginia has a law exempting solar panel systems from full or partial property tax increases. The exemption varies by location, and Senate Bill 686 provides counties, cities, and towns an optional tax exemption for solar energy equipment with a capacity of up to 25 kW, which is higher than the average home solar panel system.

 

To qualify for property tax incentives, the local building department or the Virginia Department of Environmental Quality must inspect and certify your home solar system. Here is a list of the current cities offering property tax exemptions for rooftop solar panels. These policies change often, so contact your local building inspection officials to see if your city provides property tax exemptions.

Net Metering Programs and Policies

Net metering regulations are set by the state’s Corporate Commission. All utility companies—including Dominion Energy, City of Danville Utilities, and Rappahannock Electric Cooperative, and more—must credit homeowners at a one-to-one monthly rate. In Virginia, homeowners can take advantage of these net metering programs and policies for solar systems with a capacity of up to 25 kW. 

 

The average Virginia homeowner needs a 12.7 kW solar panel system to cover their electricity needs. Any extra solar energy your solar panel system generates and sends back to the utility grid is tracked and credited to your electricity bill or account. If you produce more power than you use in a given month, the extra can be rolled over to the next month, reducing your future utility bills. At the end of the billing cycle, customers can either be reimbursed or continue to roll over their credits.

 

When you add solar panels to your home, we recommend enrolling in a net metering program through your electric utility’s website, where you can easily submit any necessary documentation. Rest assured, Blue Raven Solar’s team of experts will guide you through the technical aspects, ensuring a smooth and efficient process.

Solar Renewable Energy Certificates (SRECs)

Virginia is among a few other states with a Solar Renewable Energy Credit (SREC) program, which is an ongoing financial incentive for generating clean electricity. These credits are unrelated to net metering and are not connected to your utility company. Instead, they are issued by the government (typically federal or state) and are connected to the tax system, often reducing your tax liability or providing a refund. You gain one SREC for every 1,000 kilowatt-hours generated by your solar panels, and you can sell these credits to organizations like local electricity providers and others subject to renewable energy mandates.

 

The 2020 Virginia Clean Economy Act established a renewable portfolio standard (RPS) with clean energy targets for local utility companies. This created a market for Solar Renewable Energy Credits (SRECs), which solar panel owners can sell to utility companies. SRECs represent the environmental benefits of solar energy production and provide an additional financial incentive for Virginia residents with solar panels.

 

To take advantage of the SREC program, you will need to contact an SREC broker to set up an account with an energy credit brokerage so you can easily manage and sell your credits. 

 

SREC sales represent additional income beyond other electricity bill savings, which allows you to recover solar installation costs faster. Blue Raven Solar can help you determine the system capacity in kilowatts to maximize your return on investment.

Your Access to the Sun is Protected

With the abundance of sunshine in Virginia, solar panel productivity outshines many other states. Virginia helps each resident continue to get maximum solar harnessing through The Virginia Solar Easements Act of 1978, which gives each solar owner the right to install solar panels and have proper access to sunlight by preventing anything from blocking it in the future.

Federal Solar Tax Credit

The federal solar tax credit is officially known as the Renewable Energy Investment Tax Credit (ITC) and is a national incentive designed to promote alternative energy. Homeowners can deduct 30% of their solar installation costs from their federal taxes, effectively reducing the overall investment by nearly a third in the first year.

 

The ITC was initially introduced in 2006, and the Inflation Reduction Act extended it until 2034. The credit rate has been increased to 30% through 2032, with decreasing credit percentages available through 2034, and now includes other renewable energy sources beyond solar.

 

To take advantage of the solar federal tax credit, you must fill out IRS Form 5695, which relates to residential energy credits, and submit it with your annual federal tax return.

Partner with Blue Raven Solar Today

At Blue Raven Solar, we’re experts in solar incentives and local net metering requirements. Our teams will guide you through each step of the solar installation process, striving to help you take full advantage of all available incentives. We’re committed to helping you maximize your solar benefits and contribute to Virginia’s clean energy future.

 

Discover how you can benefit from Virginia solar incentives by requesting a no-obligation solar savings report for your home today.