Solar incentives in Virginia

The best way to save on solar is to take advantage of the federal solar investment tax credit (ITC). The ITC provides a federal income tax credit equal to 30% of your system’s cost if you install your solar energy system before the end of 2032.

The ITC drops to 26% in 2033 and 22% in 2034.

The ITC is based on the total cost of your solar equipment, labor and permits to get your solar up and running. Virginia residents typically receive a federal income tax credit of around $9,000 with the ITC.

To get your ITC, you have to claim it on your federal taxes for the year you started using your system by filing Form 5695.

More solar incentives in Virginia

Statewide residential solar incentives in Virginia

While some states have very few solar incentives, Virginia has quite a few that can benefit residents and businesses.

Tax breaks

The Residential Property Tax Exemption for Solar gives counties and cities the option to disregard the value added by solar when determining property taxes. To qualify, your solar system can be up to 25 kW and must be inspected and certified by the local building department or the Department of Environmental Quality.

Virginia also has two tax break incentives for nonresidential properties. The Commercial Solar Property Tax Exemption offers a 100% tax break on equipment and facilities used in projects that are 20 MW or less and serve a public college or private university. Projects that are more than 5 MW but less than 150 MW get an 80% property tax exemption on the assessed value.

If your project is more than 20 MW, pay attention to the start date of construction. If it begins after Jan. 1, 2024, the exemption doesn't apply.

The Renewable Energy Machinery and Tools Property Tax Exemption lets local governments lower the property tax on renewable energy-generating machinery and tools. The incentive amount varies depending on the local regulations.

» MUST-KNOW: Tax deductions for homeowners

Loan programs 

Virginia has three loan programs for small businesses and various other sectors but only one for residential properties. Commercial and agricultural energy loan programs include:

• Energy Project and Equipment Financing provides local governments with the funding they need for solar projects.
• The Small Business & Nonprofit Loan Program provides funding options for solar projects to small businesses and nonprofits.
• The VirginiaSAVES Green Community Loan Program offers loans ranging from $500,000 to $5 million to local governments, commercial properties, schools, farms and institutions that want to go solar.

You can take advantage of the PACE financing for residential projects. The program will pay for 100% of your solar installation costs, and you pay the program back through a fee that's added to your property tax. It takes around 10 to 20 years to pay this type of loan back.

What to know about net metering in Virginia

Many people keep excess energy generated by their solar power system stored in a solar battery to use later when their panels aren’t producing enough energy.

Others use net metering. Net metering is when you sell your excess energy to an electric company. The electric company typically pays for this exchange as a credit on your electric bill.

To be eligible for net metering in Virginia, residential customers must have systems that are up to 25 kilowatts (kW) in capacity. Nonresidential customers must have systems up to 3,000 kW in capacity. If you rack up a credit on your electric bill, it can carry over to the next year as long as it doesn’t exceed the amount of energy you purchased from the electric company.

Drew in Suffolk pointed out how the time of year you get panels also affects your bottom line when it comes to net metering:

“The day that you go on the grid, your 12-month timer starts,” he said. “My highest usage months are June, July and August. So, the only way for me to maximize net metering and get the value out of the solar panels would be for me to go on the grid in September. By going on the grid in January, I miss September, October, November and December. That's four months of buildup of credits.”

If you're a net-metering customer with Dominion Virginia Power, you’ll need to pay "standby charges" for both transmission ($1.40 per kW every month) and distribution ($2.79 per kW every month). This applies to you if you own and run (or are planning to own and run) an electric generation system with a capacity that's more than 10 kW but less than 20 kW.

The city of Danville has its own net metering program for commercial and residential properties. The residents must submit paperwork to Danville Utilities to be considered eligible for net metering. 

In an ideal scenario, your solar company helps with this process. Patrick in Purcellville told us his solar company “did all the proper permitting (city and county), and all that I needed to do was submit HOA paperwork.” Be sure to ask what assistance your solar installer provides for filing and submitting necessary paperwork.

Solar resources in Virginia

Below are some additional resources that can guide you through transitioning to solar in Virginia.

• Virginia Inflation Reduction Act Rebates and Tax Credits
• Charlottesville Solar Tax Credit
• Fairfax County Solar Energy Equipment Tax Exemption
• Energy Efficiency Incentives and Rebates in Virginia Tool
• Solar Tax Incentives for Roanoke Virginia
• Loudoun County Exemption for Certified Solar Energy
• Green Incentives & Rebates in Fredericksburg Virginia
• Prince William County Solar Exemption
• Virginia Green and Alternative Energy Job Creation Tax Credit
• Virginia C-PACE FAQ

» GUIDE: Solar panel installation

Find solar companies in Virginia

Compare popular solar companies available in Virginia below. Read our guide about finding the best solar companies for more.

Bottom line: How much are solar panels in Virginia?

The ConsumerAffairs research team conducted an in-depth analysis to determine how much it costs to go solar in Virginia and the average solar costs in other states.

Solar costs: Virginia vs. nearby states