Virginia Solar Power Rebates, Tax Credits, and Incentives
2012 Update
From the charm of Chesapeake Bay to the unmistakeable hue of Blue Ridge Mountains, Virginia sure does have a lot of natural places to protect. Unfortunately legislators down in Richmond have not followed in the footsteps of their great forebears when it comes to promoting sensible self-driven solutions like solar power (Jefferson’s yeomen farmers would so be using photovoltaics). Despite strong solar resources and a strong potential foundation for statewide policy, lawmakers have failed to pass or promote meaningful incentives thus far. We’ll be checking in periodically to see if all this potential turns into some real incentives for you, the customer. In the meantime, solar power is still a pretty sweet investment, even without big state incentives chipping in.
Virginia’s Renewable Portfolio Standard
A Renewables Portfolio Standard (“RPS”) is a law or other piece of regulation that mandates that a certain percentage of at state’s energy production comes from renewable resources by specified target dates. A strong RPS is important because it forces utility companies to promote conversion to renewable energy. That generally means free money for you in the form of rebates and performance payments when you switch to solar power.
Virginia first passed its voluntary RPS in 2007. In our state updates here at Solar Power Rocks, we have often used “goals” or “targets” to refer to RPS-determined minimum levels of renewable energy production that are actually firm mandates. Those mandates are backed by penalties for noncompliant utilities. In this case “goals” really means just that; aspirational targets not backed by any penalties for failing to meet the set standards.
The voluntary goal is currently 15% renewable energy by 2025. That includes intermediary goals of 7% renewables by 2016, and 12% renewables by 2022. Information on how much progress Virginia utilities have made toward those goals is not readily available.
As you might have guessed, the voluntary program here has not been as effective as the more typical mandatory RPS in promoting incentives for solar power. Virginia legislators should convert the framework of an RPS already in place into true mandates for renewable energy. We’ve the utilities start seen strong programs to encourage solar energy production in virtually every state with a strong RPS, and we’re confident that would work here as well.
Solar Performance Payments in Virginia
Virginia’s only performance incentive comes through the Tennessee Valley Authority (“TVA”). Unfortunately TVA serves Lee, Scott and Washington counties and a small portion of Wise County, so only a small portion of Virginians can cash in.
If you’re lucky enough to be TVA customers, your new solar power system is eligible for TVA’s Generation Partners Program. TVA offers a ten-year contract to purchase 100% of the energy produced by your solar power system for a premium of $0.12 on top of the retail electricity rate.
Virginia Solar Utility Rebates
Participants in TVA’s Generation Partners program are also eligible to receive a $1,000 rebate to offset initial costs of your solar power system. Unfortunately the TVA program is the only rebate available here
Solar Tax Credits in Virginia
Without a strong, mandatory RPS in place, politicians don’t have much motivation to focus on renewable energy either. It’s therefore not a surprise that lawmakers in Richmond have not passed any state tax credits for soar power.
Solar Tax Exemptions in Virginia
The tax code is not entirely devoid of love for solar power. Virginia passed legislation, way back in 1977, authorizing municipalities to exempt residential solar power systems from taxation, i.e. exempting the value that the solar power system adds to your home from being counted in property tax calculations.
Note that we said the state legislation authorizes municipalities to exempt your solar power system from property taxes. The law does not require that municipalities do so. Be sure to ask the expert installer we partner you with about whether or not your town offers such an exemption.
Utility Prices in Virginia
Electricity costs an average 11.46 cents per kilowatt-hour here; almost exactly the national average of 11.43 cents/kwh. We know you hate that monthly electric bill, but here at SPR, we actually think that energy is too cheap right now. Yes we said too cheap.
Electricity remains inexpensive only because most of it is still produced by burning fossil fuels. All that earth-killing oil and coal may still be cheap, but the long-term costs will far outweigh those monthly bill savings. When all those long-term costs, or scarcity problems, or both, really start to kick in, those monthly electricity bills are going to rise quickly. When that happens, you’ll be patting yourself on the back for having already switched over to clean efficient solar energy.
Virginia Net Metering and Interconnection
Net Metering requires your utility to monitor how much energy your solar power system produces and how much energy you actually consume, and make sure you get credit for the surplus. Virginia’s net-metering law applies to residential generating systems up to 20 kilowatts (kW) in capacity and non-residential systems up to 500 kW in capacity (utilities may choose to offer net metering to larger non-residential systems). All surplus generation is applied as a credit to your next bill at the utility’s avoided cost (or other previously agreed upon) rate. All cumulative surplus built during each 12-month billing cycle may be carried over indefinitely, or you can choose to sell the electricity back to the utility at the end of the 12-month period. In order to sell the electricity to the utility you must negotiate a purchase agreement prior to starting net metering.
That’s a pretty solid law overall, but there are definitely some easy tweaks the legislature could implement to make net metering even stronger. The maximum limit on overall enrollment should also be raised from the current 1% to at least 5% of a utilities peak production capacity. The current system size limitations should also be removed to ensure that all customers can meet on-site generation needs with solar power.
Interconnection standards here are strong overall, but there are significant areas for improvement as far as residential customers are concerned. First, requirements for additional insurance should be eliminated for small residential systems. Currently systems up to 10 kw must carry $100,000 in liability insurance. In addition, whether or not a redundant external disconnect switch must be installed is currently left to the utility’s discretion. Such redundant switches should be prohibited altogether.
5kW Example Return on Investment in Virginia
What do all the numbers add up to for you? Let’s check:
Installing a typical 5kW solar system should start at about $25,000. Don’t worry – even without state incentives, that’s still going to drop a lot!
- Since the feds calculate their incentive based on actual out of pocket costs, no state incentives means a bigger federal tax credit. Subtract $7,500 (30% of $25,000) for a new price of $17,500.
- After the tax credit we subtract your first year’s energy savings, which we estimate to be about $715. That brings your cost after the first year to $16,785, a discount of nearly $8,500 from the starting cost.
- With a conservative estimate for the future rise of electricity prices, you can expect your new solar power system to pay for itself in about 16 years. After that you’ll be turning a profit (yes, a profit) for the rest of the life of your solar panels, which is typically about 25 years total.
- In addition to those direct wallet-fattening savings, you also increased your home value by $14,302.
- You’ve also created a whole bunch of other green. Money green, tree green, all sorts of green! First, your expected profit over the life of your solar power system is approximately $17,000! That’s a whole bunch of cash … but don’t forget that you’ve done a service for the earth as well by not using all that fossil-fuel backed electricity. In fact, the fossil-fuel energy you’re not using is the carbon-saving equivalent of planting 110 trees a year, every year your solar power system is humming.
These numbers are estimates. Your home is unique and how much power you generate and how much money you save depends on that uniqueness. The best way to find out how much cash switching to solar can save you is to get one of our free quotes, and an expert installer in your area can draw up a home-specific estimate for you. Your quote is 100% free (yes, that’s right, 100% free) and you can get as many of them as that smart shopper in you desires!
Virginia Solar Consensus
Virginia has all the right pieces in place for strong statewide solar policy – good net metering, standardized interconnection, and even the framework of an RPS. Unfortunately the RPS’s current voluntary nature is preventing that potentially strong foundation for spurring any meaningful incentives for residential solar power. With above average first-year costs and below average payback time frames, Virginia comes in at a sub-par “D” in our ratings.
Check your geography… Jamestown and Virginia Beach are not the same!
This sounds great on the surface, but most residential neighborhoods still do not allow many of the alternatives to be used. The counties regulate everything from the height and placement of fences, how many and the types of animals you can keep, and height of flag poles in yards. This would certainly rule out any chance of alternative wind power. How can individuals start to take more control when the local governments keep telling us that we can’t do the things that will help make the future a better place?
So, what you are saying is that for an investment of $54K, I could expect about 60% return over 25 years? Is this even true in light of recent/anticipated Dominion Power rate increases?
It appears that solar is even less viable than I feared. Is there any hope of improvement in the next several years?
I have been involed in over 5000 solar domestic hot water systems in va.domestic hot water accounts for 25% of residential energy consumption.solar hot water systems can provide 95% of residential domestic hot water.95% of 25% is outstanding.bring back the tax credits!
Virginia Beach is only one city in 7 that makes up the entire Tidewater or Hampton Roads area, with a population of about 1.5 million. To speak of Virginia Beach without including the rest of the Hampton Roads Cities is like talking about Queens or Brooklyn being the only borough in New York City worth mentioning.
Also: ditto on Jamestown. Not even close to Virginia Beach, and not even in the Hampton Roads region.
Hi. Thanks for the good info. I have to agree about the Jamestown thing. But who cares. I live in a small town house in a neighborhood of about 30-40 connected town houses in VA beach. I would like to bring solar power to this neighborhood and set the standard for the rest of hampton roads. I’m in the service and I try to leave a good foot print everywhere I land. Any suggestions?
I would love to be on a committee to help fight for the solar power tax credits for Virginians and all the benefits of solar power.
Jamestown wasn’t even the first place for English settlers, that was the Roanoke Colony in NC!
Jamestown may not have been the first place for English settlers, but Jamestown is the site of the first permanent English colony. The quadricentennial celebration was in 2007. When’s Roanoke Colony’s celebration?
Get with the program Virginia!
Give us rebates and tax incentives (to all counties), so we can afford to install these systems.
I am 55, as it stands now, I probally won’t live long enough to see the savings.
Great summary of regulations, incentives, and rebates available in Virginia. Arlington should be embarrassed that it is not on the list of counties providing tax breaks! The example of VA Beach is useful and clearly indicates that additional incentives are needed, but we also need a strong federal program to fund industrial and academic solar power research to lower the cost of solar power systems.
I agree with JJ. Virginia needs to get with the program. The federal Gov’t needs to re-evaluate it’s solar programs as well. We should all start putting pressure on our members of Congress. Make it manditory for all new construction to incorperate alterative power generation?? It’s the only way to become self reliant
I am trying to reach John Carr from Va Weslyen College and at one time of Solar Concepts, a very old friend is looking for you…please contact me.
joyfindley@gmail.com
what disappointing news, as we were considering the western end of VA. for retirement. Build a new home with PVA’s and geothermal heat. What is the state govt. doing, asleep at the switch?
I would like to know how to just begin a small scale installation to offset my growing power needs and its high pricetag. Please contact me if this is at all possible.
Vette,
did you get any good suggestions? we’d like to follow along too.
Vette,
I’d consider Mikes approach (www.mdpub/SolarPanel/index.html) for a shoe string budget. I’m planning a couple installations in central VA. The life span of the shell may be shorter, but the pricetag is far less than the return, and will offset the future upgrade.
Thanks for your advice on the small scale system Jason!
And what about us poor slobs on the Eastern Shore of VA!? Who would even cross the bridge to work over here? Hope the Obama plan inspires more rebate options for do it yourselfers!
For Jason, the site you referenced on Jan 24:
http://www.mdpub/SolarPanel/index.html
does not go anywhere.
Any updated sites?
try
http://www.mdpub.com/SolarPanel/index.html
I have been scanning most of Hampton roads for anything other than the excessively expensive (when you pay the installers) Photo Voltaics installations and I never see any!
I too live in VA Beach and in addition the GRHA and fear that the association would nix anything but a generic PV array on the top of the house.
Groan!
Are there no petitions or movements to urge the state government to implement the tax incentive for Va Beach?
We are planning to move to Va from NC and to the Charlottesville area… We have tried building in NC and our experience with regular developers and builders not so hot let alone something new. So the question: Would it make sense to integrate Geothermal with Solar? What are the tax breaks there and wouldn’t it be easier to power a house that is already partially heated/cooled with Geotherms? Thanks
Let start a petition for all Virginia tax credit and incentive. I have had enough of the energy bill going up as they wish.
I agree we need to push for tax credits or it won’t happpen. Create these discussions locally as well, and contact local representatives!
How is “non-residential” defined for the purpose of having an installation larger than 10 KW? Is a working farm (with a farm house) that has power needs far greater than 10 KW considered “non-residential”?
I looked at your web sites information and laughed. My house is completely solar and I dont qualify for any of your tax breaks because Im off the grid. No tax breaks, No incentives, no cheap loans, no breaks from the building inspectors, nothing. The systems you must install to take advantage of these incentive are the most expensive ones. I have some of them thats why I know how expensive it gets. Enough said. As Americans, the starting point is to simply lower the amount of power we use on a daily basis and our electric bills will go down dramaticly. Yes, we may have to alter our wastefull lifestyles in order to save the most money. by the way 10KW of solar panels at $4 at watt is about $40,000 plus the $5,000 mounting hardware, $4,000 inverters, $1,200 battery chargers, $4,000 for mounting hardware and wire, $1,500 for monitoring equipment, $5,000 for batteries, etc. Now you need to pay for installation labor, shiping to get the equipment to your house. Your incentives are great on paper but impractice to the average Joe because of the cost and barriers, taxes, etc…. Don’t get me wrong I love solar and some day i will finish my house “God willing” and have all the solar systems installed. But most people are not going to do without in order to get what they want.
Hi Doug,
You are absolutely correct. Large scale off-grid solar is not a smart investment, it simply is more of a luxury. The incentives are in place to help you defray the cost of grid-tied solar applications. The reason for this is a lot of the dollars for these incentives come from utilities.
Dear Solar Rocks,
I live in Norfolk, Virginia and I’m not clear from your presentation if TVA solar credits are available to me. Can you clarify?
Hi Jack (and Gloria),
There are currently 71 utilities across the valley participating in the TVA solar program. Click here for the list. If your utility is not on the list, it’s time to start harassing them. This is an excellent program.
Unfortunately, most of Virginia is not part of the TVA program. See the website for a map and list of distributors:
http://www.tva.com/greenpowerswitch/green_mainfaq.htm
http://www.tva.com/power/power_customer.htm
I have found some information that RECs that we produce in VA can be resold in PA and NC, at least until they are required in VA. As I am researching systems, this would seem to be a way to generate more financial offset to pay for the systems. There are also several lease options that seem very viable, and I am moving forward. The REC offset option seems to be the tipping point, although I still need to verify more.
Curt / Northern Virginia
Please update the Virginia state incentives! Thanks!
How does one get a local electric Coop to participate in the TVA program? I’m in Rappahannock County. I see there is a company in Winchester that does, so this must be possible is it not?
Does anyone know of a solar installer in the SW VA (Abingdon)area?
I am reading that there is a limit of 10 kwh per month that is allowed by virginia law for residential. my regular electric is around 740kw/month. It would hardly be any savings at all to install an expensive solar or alternative energy device if you are only allowed to get this little amount from it… I’d use some solar but not if it is so regulated that I can barely get any use out of it.It would be too expensive to do so unless the limits were raised for residential making it more worthwhile and affordable in the long run.
I suggested to my county supervisors that they join DESIRE and provide the tax break on solar power. They laughed it off and asked how they would get tax revenue from anyone then. They don’t realize the potential businesses that could move into the county. The state should mandate it. Leaving it up to individual counties means ignoring it.
I still haven’t found where Virginia offers a state rebate or credit available for the State of Virginia.
The rebate or credit is avaiable under the program name Renewable Energy Rebate Program.
The maximum amount available under this state incentive is $3,894.
Virginia isn’t getting with the program because of its ties to the power companies in Virginia, which primarily use Virginia coal to generate their power. Double whammie I imagine.
Thanks for the great post, It’s full of useful info people can use to make our world greener. I’m very big on saving energy and I show people how to make their own solar panels and save a fortune on energy bills.
Tony
How To Make A Solar Panel
So many states offer a lot more Incentives to go solar. I believe the reason VA does not is because we are a COAL producing state and they do not want to give up this way of producing electric until they have not choice.
I am 59 and keep looking at going solar but because of the lack of Incentives I would probably die before getting my money back. Taking a 5 year MAX average monthly usage my yearly MAX average bill would be $1,900. Now if I would have to spend close to 60K to 15,000kW I would need.
Take the $1,900 and say my electric bill goes up 15% every year (1900, 2185, 2512, 2889, …) it would take 13 years at this hi growth rate to spend my 60K. Assuming I was getting 0% interest rate on my money in the bank. Also I have not included ANYTHING for upkeep on the solar system which hopefully would be small but hay sh.. happens.
So until VA starts getting with the program of other states I will keep my cash in the bank and keep dreaming of someday having a solar electric system
I live in Newport News, VA and installed a 8100 watt system this past December. Ignoring the State Rebate ($14k) for a moment. I got $16,100 back from the Federal Government and am getting SRECs to the tune of about $2800 a year (for 10 years thats about $28,000. So for the $55k invested I get $44k back without state rebates, plus free electricity probably for life (I do have to pay the line fee and tax of about $10/mth). Not bad, with the state rebate – fantastic.
I would like to explore installing solar panels in a pasture instead of on a roof. We have already installed the infrastructure to connect the pasture panels into our system, presumably for net metering. I am open to leasing or buying, but don’t know where to start. This is in Rappahannock County.
Holly, try looking into a local solar installer…here in Ashland, there is a guy named Ken Schaalof Commonwealth Solar, who has been doing this stuff for 25 years. What’s great about Him is that he looks to save you money (energy efficiency, hot waer systems, etc.), not just install solar!
Tax incentives make all the difference for green energy in general and especially for solar (until technology improves sufficiently). The DIY option is also well worth a look. You don’t necessarily need to be an expert to make your own solar panels but you do need commitment to see the project through.
Not for everyone, but I did it and blogged about it here: homemade solar panels if anybody would like to have a go themselves!
I would like to know where to sell my srec`s and get the best rates. I see Tim Dolan has sold his for 2,800 per year. can anyone info. me on this subject ?
I own a Manufacturer’s Rep Business in VA, we deal with a number of energy products for big industry but have recently taken on mass energy storage batteries which now allow storage or wind or solar energy. Thats why I was looking at this great site today. From experience one of the very best ways to get solar and other energy incentives legislated is to band toghether & hire a Government Affairs Specialist who can get that done in short order. I can put anyone seriously interested in touch with a very good one if they reverse contact me through this site with the cooperation of the site. It benefits everyone to at least keep the tax incentives.
Virginia needs to get onboard ASAP and provide incentives for solar applications. Otherwise we are going to be left in the dust as usual where technology is concerned. I am finishing school and will be able to take the NABCEP exam soon to begin my new business and be rid of my career in IT.
I’ve a 3700 sf old partly new house strung out along side the Blue Ridge in Loudoun Cty. Two furnaces and an in ground homemade pool push my monthly energy bill to over $800 p.m. combined propane and electric. Looking at wood fired boiler, geo-thermal, and solar…have open hillside space to locate panels with full day of sunlight. Need a reputable expert to advise. Retiring soon
It is a good initiative taken by the governments. I am planning to buy solar panels and installing them for domestic power. But I don’t know the procedure to apply for incentives from the centre and federal government. Please let me know, would be of great help.
Solar power in my opinion is costly up front and will not give you as good a return on investment as Geothermal. In 2004 I was able to replace both gas/AC units in my home with a geothermal system. My power bill in the cooling season was cut in half and geothermal unit unlike a heatpump is not effected by low or high outsid temperatures. Cost savings in the winter months is about 50% vs. using natural gas. When the unit is running in the summer or winter, added benefit is free hot water. 2 conventional units 18k. Geo 26k. It took about 4 years to to break even on the additional 8k spent in utility savings. Equipment last about 30 years vs 15 years on conventional equipment. I am sold on the system but don’t understand why not replace with geo if the old systems have to be replaced anyways.
The solar panels are really helpful to the environment. My cousin has a solar panel connected to his house.
Are there any solar leases available in VA? They exist in DC and MD! I’m truly amazed that Virginia is so tied to the 18th Century…Hey Guys…This IS the 21st Century!!
I was just about to ask what Joanne did; I don’t live on a property where I could lease out a roof myself, but it occurred to me that there are a lot of condo towers around here (mine included) that have space and could potentially reduce their rates (or condo fees) by leasing out their roofs and making an income on otherwise wasted space.
I installed a outside EPA 2 wood pellet boiler for free heat and hot water as I can produce my own wood pellets year over year. I’ve also replaced all my incandescent lights with LED light bulbs. Also replaced the old TV with LED energy efficient TV and cut down on all electrical wastage as much as possible. I’ve noticed my monthly electric bill has fallen substantially. I suppose my next step will be to install some solar panels to knock out the rest of my electric bill? Tax credits seem to good to pass up? So long propane and electric company :-) One thing nice about the wood pellet stove is it has a place for two water pumps. One pump circulates the water to a heat exchanger in my central force air ducts for the house. The other to a garage or green house? haven’t decided for sure yet. I figure for the pool I can use passive solar heating?
I did extensively check out Geothermal heating and cooling but was very expensive to install. My wood pellet boiler provides heating and hot water for basically free if you can produce your own wood pellets. Solar panels costs are falling rapidly and expect with the tax credits I’ll be able to install my own system fairly cheaply.
Update almost 2 years later…
1. One of my panels came off when Irene came through. It is back up on the roof still producing power (tough panels).
2. SRECs dropped for awhile. They were doing as low as $25/SREC, but if grandfathered in they are up to $300 last month selling into DC. Can still qualify for PA, from VA, but they are talking about excluding out of state like DC did, hopefully they will grandfather like DC did. For SRECs see “www.SRECTrade.com” or I think it is Flettexchange.com.
3. My 8.1kW system is still averaging over 33kWh per day, even with one of my trees starting to over-grow the roof.
4. The price has come down from $1200 retail to around $400 retail per panel for similar panels, although it sounds like it is going to go up by $200 due to tariffs and silicon price stabilization.
and lastly, I still love my panels. I will be once again participating in Hampton Roads Solar Home tour in October, feel free to visit.