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Virginia solar incentives, tax credits and rebates

Resources for going solar in 2023

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After tax credits, the average system is $21,175 in Virginia, which is more expensive than in many other states. The national average for solar systems is around $17,000.

Virginia has a property tax exemption for the value added to your home by solar panels to help you save money, though. You can also take advantage of the federal solar investment tax credit (ITC) and Solar Renewable Energy Certificate (SREC) program to make solar more affordable for residents. Plus, loan programs like Property Assessed Clean Energy (PACE) are available if paying upfront isn’t feasible.

Key insights

  • You can take advantage of solar tax breaks and loan programs.
  • The average federal tax credit value is $9,075 in Virginia.
  • Estimated 25-year savings are $21,692 with solar panels.

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

Incentive typeIncentive amountApplicable sectorsAdministratorStatewide
Local option*: Residential Property Tax Exemption for Solar Property tax incentive Varies Residential Virginia Department of Energy
Arlington County Green Building Incentive Program Green building incentive Varies Commercial, construction, residential, installers/contractors, multifamily residential Arlington County
Energy Project and Equipment Financing Loan Program Loan program Varies Local government Virginia Resource Authority
Commercial Solar Property Tax Exemption Property tax incentive 80% to 100% exemption Commercial, industrial, schools, agricultural Virginia Department Energy
Small Business & Nonprofit Loan Program Loan program Varies Commercial, nonprofit Virginia Small Business Financing Authority
Local option*: Renewable Energy Machinery and Tools Property Tax Exemption Property tax incentive Varies by local governing body Commercial, construction, industrial, nonprofit, residential, installers/contractors, agricultural, integrators Varies
VirginiaSAVES Green Community Loan Program Loan program Minimum loan size: $500,000 to $1 million; maximum loan size: $5 million Commercial, industrial, local government, nonprofit, schools, state government, agricultural, institutional Virginia Small Business Finance Authority
Green Job Creation Tax Credit Industry recruitment/support $500 tax credit per job created Commercial, industrial Virginia Department of Taxation
*Local options are allowed by state law but not required. Availability varies by location.

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.

» 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.


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    Can I get solar panels for free in Virginia?

    You can’t get solar panels for free, but you can reduce your starting costs with a lease or a PPA. These options get you a solar system with little to no upfront costs and a flat monthly fee or a payment for how much electricity you use.

    » MORE: Free solar panels: Are they really free?

    How much can I save with solar panels in Virginia?

    In Virginia, the average savings after going solar is $21,692 over 25 years. Even if you don’t generate 100% of your energy needs, you can still save a lot of money compared with paying traditional utility bills.

    Are there any commercial solar incentives in Virginia?

    Virginia has several commercial solar incentives, including the Arlington County Green Building Incentive Program, the Commercial Solar Property Tax Exemption, the Small Business & Nonprofit Loan Program, the Renewable Energy Machinery and Tools Property Tax Exemption Program, the VirginiaSAVES Green Community Loan Program and the Green Job Creation Tax Credit.

    » MORE: Commercial solar panel installation

    Are there any disadvantages to going solar in Virginia?

    There are a few things to consider before going solar in Virginia. First, the state only gets around 3 1/2 to 4 peak sun hours daily. That may not be enough sunlight to power your home or business without buying a lot of solar panels.

    Also, the average cost of solar panels is 26% higher than the national average. This could make solar out of reach for those on a budget. The average time it takes to pay off solar (if you pay cash) in the state is around 12 years, which may be prohibitive to some.

    » MORE: Solar energy pros and cons

    Is my HOA allowed to restrict solar panels?

    In Virginia, the HOA can limit the size and location of your solar panels.

    How can I pay for solar panels?

    While paying cash is an option, most people tend to finance solar panels. Another option is getting a solar loan that lets you pay back the money you borrowed for your solar system back over time with interest. You can also lease your solar system or get a PPA (power purchase agreement).

    » SOLAR PANELS: Lease vs. buy

    How do PACE programs work in Virginia?

    PACE in Virginia lets you finance 100% of your solar and pay it back through an additional fee to your property taxes. Financing has a fixed rate for up to 30 years.

    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

    Average cost per wattTypical system sizeUpfront cost*ITC value (30%)Payback period*Estimated net savings
    Virginia $2.75 11 kW $21,175 $9,075 12 years $21,692
    West Virginia $2.64 11 kW $20,328 $8,712 13 years $19,893
    Delaware $2.58 9.5 kW $17,157 $7,353 12 years $29,016
    Maryland $2.77 10 kW $19,390 $8,310 12 years $21,395
    North Carolina $2.54 6 kW $13,815 $5,921 13 years $20,035
    Kentucky $2.34 11 kW $18,018 $7,722 12 years $20,247
    * After ITC federal tax credit; ** When you pay cash

    ConsumerAffairs writers primarily rely on government data, industry experts and original research from other reputable publications to inform their work. Specific sources for this article include:
    1. Database of State Incentives for Renewables & Efficiency (DSIRE), “Virginia Programs.” Accessed August 21, 2023.
    2. EcoWatch, “Solar Panel Cost in Virginia.” Accessed August 21, 2023.
    3. United States Environmental Protection Agency, “Summary of Inflation Reduction Act provisions related to renewable energy.” Accessed August 21, 2023.
    4. Solar Energy Industries Association, “Virginia Solar.” Accessed August 21, 2023.
    5. Virginia Department of Energy, “PACE.” Accessed August 21, 2023.
    6. Solar United Neighbors, “Homeowners Associations and Solar Access in Virginia.” Accessed August 21, 2023.
    7. Virginia PACE Authority, “PACE Frequently Asked Questions.” Accessed August 21, 2023
    8. U.S. Office of State and Community Energy Programs, “Property Assessed Clean Energy Programs,” Accessed August 21, 2023.
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