Virginia solar rebates and incentives: 2024 guide

The average Virginia solar shopper will save $4,415 on solar panels with rebates and incentives.

Updated May 7, 2024

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    Written by: Casey McDevitt

    Solar panel systems in Virginia are expensive, but incentives from the state and federal governments can help you reduce the upfront cost. Between the federal tax credit and other state-specific incentives, you can save thousands on solar panels, making them well worth the investment. Here's how you can lower the cost of solar if you live in Virginia.

    See how much solar costs in Virginia

    As a Virginia homeowner, you have access to some great incentives that can substantially improve your return on investing in solar panels. The programs below are some of the most impactful ways to bring down your solar costs.

    Incentive
    Average savings in Virginia
    Description

    Residential Clean Energy Tax Credit, formerly the federal investment tax credit (ITC)

    $4,415

    Lowers your solar panel system's cost by 30%

    Solar renewable energy certificates (SRECs)

    $300-$750

    Allows you to generate and sell SRECs to utilities

    Residential Clean Energy Credit

    The Residential Clean Energy Credit, formerly known as the federal investment tax credit (ITC), can reduce your solar panel system's cost by 30%. Your entire system qualifies for this incentive, including equipment, labor, permitting, and sales tax. 

    The average cost for a 5 kW solar panel system is around $14,715 in Virginia. Once you factor in the 30% credit, the cost comes down to $10,301.

    When you file your federal income taxes, you can claim this incentive as a credit towards your federal tax bill. Just keep in mind that to qualify for the ITC, you need to purchase your system either with cash or a solar loan–if you lease your system, you won't be eligible. 

    You also need a high enough tax bill, though you can roll over any remaining credit year-to-year until the end of 2034 when the ITC expires. The only time you might be eligible for a direct payment for the ITC is if you're a tax-exempt entity, like a nonprofit organization.

    Solar renewable energy credits (SRECs)

    The Virginia Clean Economy Act (VCEA) set a renewable portfolio standard that requires utilities to generate a certain amount of renewable energy. Under this program, you can earn one SREC for each megawatt-hour (MWh) of clean electricity your panels produce, which can then be sold to utilities to count towards their renewable generation.

    SREC prices vary based on market demand, but you can expect to earn $30-$75 per SREC. To start selling SRECs, register your system through your utility company. From there, an aggregator or broker will handle the purchase and sale of your SRECs with the utility. 

    Learn more about SRECs

    In addition to the great rebates and incentives above, Virginia also offers a solar property tax exemption, meaning you don't need to pay a higher property tax for adding solar panels to your house.

    Tax Exemption
    Description
    Virginia solar property tax exemptionIf you use solar energy as a source of power, you can receive a full or partial tax exemption on the value your solar panels add to your property.

    If you connect your solar panel system to the grid, you can benefit from net metering, one of the best solar panel incentives available in Virginia. With net metering, you earn credits when you send excess electricity from your solar panels to the grid. When the sun isn't shining and you need to pull electricity from the grid, your utility will apply the credits to your bill. Net metering makes it so you will owe very little, or even nothing, on your electric bills with solar panels.

    In Virginia, net metering rules are pretty consumer-friendly. Dominion Energy and Appalachian Power Company offer net metering at the retail rate of electricity, which is a one-to-one transaction.  Here are a few nuances to keep in mind:

    • You can roll over your credits. After a 12-month billing cycle, you can roll over your credits to avoid losing them. 

    • Your system must be sized appropriately. To participate in net metering, your solar panel system’s capacity must be under 25 kW and sized to meet your annual load. 

    • Credits are available on a first-come, first-served basis. The aggregate capacity limit is equal to 1% of the peak load forecast from the previous year.

    Learn more about these net metering programs:

    Dominion Energy Appalachian Power Company

    Virginia doesn't offer any state-specific battery incentives. However, all batteries above 3 kWh in size are eligible for the 30% federal tax credit. In Virginia, you can also use your battery to boost your energy independence and provide backup power during an outage.

    Learn more about battery incentives and rebates

    If you're looking for solar installers in Virginia, here are some popular suggestions:

    See the complete list of solar companies in Virginia

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