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Clear info on home solar power rebates, tax credits, and other benefits

2017 Policy

D

Avg. Yearly Savings

$702

Congratulations! You've found the ultimate guide to going solar in Virginia

2016 Policy

D

Avg. Savings/yr

$702

At Solar Power Rocks, our dream is to turn your thoughts of solar power for your home into reality

Note: The numbers above are just estimates for a 5kW solar system, and your home is unique. The best way to know exactly how much money solar power can save you is to connect with one of our partners nearby. A friendly solar expert we trust will give you a buzz and help you craft a personal plan to get the absolute most out of a solar power system for your home. It's 100% free (yes, that’s right, 100% free) and you aren't obligated to buy anything.

From the charm of Chesapeake Bay to the unmistakable hue of the 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.

Questions? Our network of solar experts are on call to assist you. Simply sign up for personalized assistance on our special solar deals page. You can get discounted on-grid pricing as low as $4,000/kW! This is paired with the Virginia solar incentives you see below.

Your guide to going solar in Virginia

We've designed this page to be a complete guide to the complicated and sometimes confusing process of installing solar panels on a home in Virginia. Since there's a lot of important information to consider, we've separated the page into sections to help you find what you are looking for. If you find this page useful, please share it with someone who might also find it interesting!

The Solar Strategy section is all about the various financial options you have in Virginia. We've created a tool that asks you a few questions about what you hope to get out of a solar purchase and recommends whether you should pursue a solar lease, loan, or outright purchase. Then, we give you a detailed picture of how each could work for you.

The Policy Information section contains all of our latest research on the rules set by the state legislature and public utilities commission that determines how easy it is to go solar in Virginia. These policies and rules govern everything from renewable energy mandates to whether you get paid retail or wholesale rates for the extra energy your system produces, and can have a huge effect on the viability of solar.

Finally, the Solar Incentives section lists all of the available financial benefits available to homeowners who go solar. This section includes information about money-back rebates and grants, tax credits, and tax exemptions. If you're looking for what Virginia is doing to make solar more affordable for its citizens, you'll find it here.

Click any of the boxes below to go to that section of the page, or scroll down to read the page in order.

Your Solar Strategy in Virginia

Figuring out the best way to go solar in Virginia can be a little daunting. From loans and leases to power-purchase agreements, there are a lot of options out there. To help you pick the one that might be best, we've created the handy decision tool below.

We'll ask you a few simple questions about you and your home. Once you're done, we'll recommend a good option. Further down this page, we provide cost estimates and example return-on-investment calculations for all the various options:

Compare the Return of Different Solar Investments in Virginia

The chart above shows the 25-year returns for an investment in solar whether you choose to purchase a system with cash or pay over time with a loan. That might look a little complicated to you, so let's break it down:

The green bars show the return if you pay up front. As you can see, there's a big payment (negative) in year 1, which gets slowly reduced over time. The green bars cross the "$0" line at year 14, which is when the system will have paid back your initial investment with electricity savings. Then, our example goes to year 25 (which is when most solar panel warranties end), where you'll end up with just over $16,000 in total profits. Not bad! That's because even though Virginia has pretty cheap electricity, the state gets enough sun to make the electricity savings substantial.

The orange bars, on the other hand, show what happens if you take a Home-Equity Line of Credit (HELOC) to pay for the system. You don't put any money down, but you do get the 30% Federal solar tax credit, meaning you actually come out ahead in year 1. The bars dip below the $0 line after 6 years, because your loan payments (over a 15-year term) will exceed your energy savings by a little each year. Still, once you pay off the loan, the savings start stacking up quickly. In the end, you'll come out thousands of dollars ahead over the 25-year estimate.

Finally, the blue bars represent a similar HELOC option, but for a smaller, 2-kW solar system. This size system is great if you only have a little equity, and it still saves you thousands in the long term, while reducing the amount of CO2 pollution you're responsible for. The loan size is smaller, and so are the first-year windfall and final profits, but if you love the idea of solar, this is a great way to go.

Keep in mind that these numbers are estimated for Virginia residents who don't qualify for rebates from either the Tennessee Valley Authority (TVA) or Dominion Power. Bot TVA and Dominion offer interesting performance payment programs, and TVA even has a $1,000 rebate to go along with it. So if you're served by either of those two companies, your financial outcomes will look a little different from our examples. Your best bet is to connect with one of our partners in Virginia to get help with paperwork and make sure you get all the solar incentive money that you can.

Read on to find out more about each option!

 Buying Solar in Virginia

Paying up front used to be the only way to get panels on your roof, and it's still the option that allows you the most control. But it isn't the best option from a percentage return on investment standpoint—that award goes to the solar loan.

Still, an outright purchase returns the most money over time, because you own the system from day one and reap all the benefits—the Federal solar tax credit of 30% of system costs and some decent energy bill savings.

In our example, you put down $18,750, but by the end of year 1, that tax credit and the energy savings will erase a bunch of it. Over 25 years, your system will have produced over $16,000 in income.

Here’s an example of how the numbers work for a purchase of a 5-kW rooftop solar system in Virginia:

  • Installing a typical 5-kW solar system should start at about $18,750.
  • The Feds offer a tax credit of 30% of out-of-pocket costs, so you'll get $5,625 back next April. Note: you can take the credit over two years if you don't owe $5,625 in Federal taxes this year.
  • Then there's your first-year energy savings. That's another $749, and it brings the cost after 1 year to just $12,376.
  • With all the energy bill savings rolling in, your system will pay itself back after 14 years. Once that happens, you’ll be seeing over $1,200 per year in savings until the end of your system’s life.
  • When all is said and done, our 25-year estimate shows a total net profit of $16,041 with an internal rate of return of 6.8%. That's better than most financial investments you can make!
  • On top of those returns, your home's value just increased by $14,976, too (your expected electricity savings over 20 years)!
  • And speaking of doing good for the environment... your system will create some green for the earth by not using electricity from fossil-fuels. In fact, the energy you’re not using has the carbon equivalent of planting 113 trees a year, every year your solar power system is humming.
Keep in mind, the numbers above are based on an average home in Virginia. If you're ready for a custom quote for a solar panel system, our network of experts are on call to assist you. Simply sign up for personalized assistance on our special solar deals page.

 Solar Loans in Virginia

This is where we tell you that taking a loan for solar panels is a no-brainer, because it means investing in an income-generating asset. It's true! That's because the state gets a nice amount of sunshine, so even without huge incentives, it's enough to make solar worthwhile, generating a good deal of income for you after you pay your loan off.

Here's the important stuff:

As you can see from the chart above, you'll start out with a big windfall, because with a loan, you're not putting any money down, and you get the rebate and federal tax credit just like if you paid $18,750 up front for your system. You'll come out ahead nearly $4,600 after the first year! In the 14 years that follow, your loan payments will actually cost a little more than the money you'll be saving in electricity, but just think of it like a monthly deposit into a savings account.

The rest of our estimate might look like a see-saw, because you start out with a windfall, drop down into "sizeable investment" territory, and then rocket up again after the loan is paid off. That's when the solar "savings account" will pay dividends. You'll be saving tons of money every year because you'll own the system outright. At the end of our 25-year example, you'll be $8,101 to the good, which is great for an investment where you put nothing down!

A solar purchase like this will make sense for you if the following is true about you and your current situation:

  • You can get a home-equity line of credit (HELOC) for $18,750 with a fixed rate of 5% or lower and a 15-year repayment period.
  • You have an appetite for making a little money with a long-term investment, while also producing benefits for the environment.

Here’s how the numbers pencil out for a Virginia solar purchase with a HELOC:

  • Installing a typical 5-kW solar system should start at about $18,750, even without any state rebate. That's how big your loan will need to be to cover it.
  • The electricity bill savings in the first year of operation will total $749, but your loan payments will be $1,779, for a difference of $1,050, or about $88 per month.
  • But here comes the tax credit! Because you've technically "paid" for the system with your loan, you'll get the Federal tax credit of 30% of system costs, or $5,625! Even after you make those loan payments, you'll end up with an extra $4,595 at the end of the first year.
  • When your loan’s paid off in year 15, you’ll see over $1,250 per year in savings until the end of your system’s life.
  • For our 25-year estimate, you'll see pretty nice returns, to the tune of $8,101 after all the payments. That's a huge amount of money for a zero-down investment!
  • Finally, the environmental benefits cannot be overstated. Operating your system will take as much carbon out of the air as planting 113 trees every year!
Keep in mind, the numbers above are based on an average home in Virginia. If you're ready for a custom quote for a solar loan, our network of experts are on call to assist you. Simply sign up for personalized assistance on our special solar deals page.

 Small Rooftop Systems in Virginia

Let's say you don't have a ton of extra cash laying around, but you do have a bit of equity in your home. Can you get solar panels? YES! Is it a good idea in Virginia? Probably! You'll take out a small loan that will be repaid with low monthly payments, and your electricity savings and tax credit will result in big savings. You'll end up with a little profit over 25 years, and you'll also help take a lot of carbon out of the air!

Here are the factors we'll look at for this example:

  • A 2-kW rooftop system that will cost around $7,438 installed (after rebate).
  • A HELOC for that amount with a 15-year payback at 5% interest.

Here’s how the numbers pencil out for a Virginia purchase of a small rooftop solar system:

  • Installing a typical 2-kW solar system should cost about $7,438. Your loan should be for this amount.
  • You'll gain $300 in electricity savings in the first year of operation, while your loan payments will cost $706. That's a net cost to you of $406, but...
  • At the end of the year, the Federal government will give you a tax credit of 30% of the cost of your system. That's $2,231 that you won't owe this year. You can take the Federal credit over two years if you don't owe that much in taxes this year. Here's how that looks:
    • First-year electric bill savings: $300
    • - First-year loan payments: $706
    • = First-year cost of solar: -$406
    • + First year federal tax credit: $2,231
    • Total in your pocket after year 1: $1,825
  • Your loan payments will exceed your electricity savings while you pay off the loan, by about $33 per month. But when your loan’s paid off in year 15, you’ll see upwards of $500 per year in savings until the end of your system’s life.
  • For our 25-year estimate, you'll end up with some pretty decent profits! We're talking $3,311 after 25 years, all without putting any money down. That should help your old, wiser self appreciate your young, forward-thinking self.
  • Your system will remove as much carbon from the air as planting 45 trees per year, which is a pretty great thing, we'd say.
Keep in mind, the numbers above are based on an average home in Virginia. If you're ready for a custom quote for a solar loan, our network of experts are on call to assist you. Simply sign up for personalized assistance on our special solar deals page.

Virginia Solar Policy Information

Ever wonder why solar seems to be everywhere in some states, but not in others? We did too.

State legislatures and public utilities commissions can enact rules to make solar power accessible for everyone. Favorable rules explain why some of the cloudiest states—New York, New Jersey, and Connecticut, are doing so well with solar, and yet some of those with the most natural solar resources—like Alabama, Mississippi, and Florida—are doing so poorly.

Below is important information about the public policy, rules, and economic reasons that affect your ability to go solar here in Virginia:

RPS

15% of base year (2007) sales by 2025

Grade: F

A Renewables Portfolio Standard (“RPS”) requires utilities in the state to eventually source at least a certain percentage of their electricity from clean, renewable sources like solar panels.

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% (of 2007’s generation) 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 seen utilities start 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.

Virginia’s RPS is critical to strong renewable energy policy. Utility companies aren't really all that gung-ho about you producing your own power. After all, it costs them money when you use less of their electricity. They also don’t naturally want to give you big payments for energy you're feeding back into the grid. The main reason the utilities are aiding your transition to lower electric bills and offering you incentives to put solar on your roof is because the state forces them to. If the utilities don't hit their RPS numbers, they have to pay large fees back to the state.

What's an RPS? Your state legislature paves the way for strong solar energy incentives to flourish by setting standards for renewable energy generation within their territories. Those standards are called the state’s renewable portfolio standard (RPS). If utility companies do not meet these standards, they must pay alternative compliance fees directly to the state. Many utilities then determine the best ways to source their energy from renewable sources that are less expensive than this fee.

An RPS is a mandate that says "Hey utilities! Y'all now have to make a certain percentage of your electricity from renewable sources. If not, you'll have to pay us huge fines." The consequences are good, because utilities usually try to meet these RPS standards by creating solar power incentives for you, the homeowner. Read more about Renewable Portfolio Standards.

RPS solar carve out

None

Grade: F

In addition to being voluntary, Virginia’s RPS also lacks a solar carve out. They’ve taken steps toward encouraging residential solar creation, however, by offering double credits to utilities for onshore wind and solar energy production. If the RPS contained specific carve-outs for clean and efficient technologies like solar panels, or mandates for the environmentally necessary increases in distributed generation, you’d see even stronger incentives for residential solar power.

What's a solar set aside? A solar set aside guarantees a specific portion of the overall renewable energy mix generated comes from the sun. For those states with progressive standards, high alternative compliance payments, and clear solar carve outs, the faster those areas become ripe for solar.

Some states have higher alternative compliance fees than others, and some states have more progressive alternative energy standards and deadlines than others do.

For instance, New Jersey has an overall RPS of 22.5% by the year 2021. That requires local utilities to source 22.5% of their energy mix from renewable sources by the year 2021. Pretty good. However, New Jersey also has a specific solar set aside of 4.1% by 2028. That’s the type of firm commitment which really gets the industry rolling forward. No wonder why New Jersey is one of the hottest solar markets right now!

Virginia Electricity Prices

$0.12/kwh

Grade: C

Electricity costs an average 12 cents per kilowatt-hour here -- comfortably below the national average of 13 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.

Why are electricity prices so important? Because that is what solar power is directly competing against. The cost to produce power with solar is relatively constant (of course how much sun hits your area has an effect), so if you are paying $0.40 per watt for power, then you make FOUR TIMES AS MUCH as the guy or girl paying $0.10 per watt electricity.

The caveat here is that if the $0.10 per watt person has a HUGE rebate, they may be better off than the $0.40 per watt person. Because of that, states without any renewable standards tend to be heavily reliant on cheap coal for electricity, and also have very low electricity prices. When electricity prices are artificially low, that hinders the ability of solar energy to achieve meaningful payback in the state.

Virginia Net Metering

C

Grade: D

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. 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 power 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 utility’s 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.

What is net metering? Net metering is the billing arrangement where you can sell excess electricity back to your utility for equal the amount you are charged to consume it. The more customer friendly net metering policies, the higher the grade.

The grade here specifically reflects individual solar system capacity, caps on program capacity limits, restrictions on “rollover” of kWh from one month to the next (yep just like cell phone minutes), metering issues (like charges for new meters), Renewable Energy Credit (REC) ownership, eligible customers and technology (the more renewables the better), being able to aggregate meters across the property for net metering, and safe harbor provisions to protect customers from solar tariff changes.

Virginia Interconnection Rules

A

Interconnection rules are a little technical, but they basically allow you to “plug in” to the electric grid with solar panels on your roof. The more complex, out of date, or nonsensical the state rules are for plugging into the grid, the lower the grade.

Specifically, the grade reflects what technologies are eligible, individual system capacity, removing interconnection process complexity for smaller systems, interconnection timelines and charges, engineering charges, prohibiting the requirement of unnecessary external disconnects, certification, spot interconnection vs. wide area interconnection, technical screens, friendliness of legalese, insurance requirements, dispute resolution, and rule coverage.

Solar Incentives in Virginia

Virginia Solar Power Rebates

TVA only: $1,000

Grade: F

Virginia currently lacks any sort of statewide solar rebate program. Those of you fortunate enough to fall within the jurisdiction of the Tennessee Valley Authority (TVA), however, are eligible to receive a $1,000 solar power rebate upon installation to help offset initial costs. Unfortunately, this is the only utility-based solar rebate in the state and only serves some residents of the Lee, Scott, Washington, and Wise counties -- meaning only a small portion of Virginians can cash in.

If the RPS set mandatory levels of renewable energy production, we can guarantee more utility companies would offer incentives to help you make the switch to solar. How do we know? It’s worked everywhere that a real RPS has been implemented. Get on it, Virginia!

How do solar rebates work? Similar to getting a rebate card from your local big box store for a dishwasher purchase, state legislatures also provide rebates for solar panel purchases to spur on investment and create new jobs. If you purchase the solar panel system yourself, you qualify for this free cash, which many times is a lump payment back to you. Some solar installers like to take this amount directly off the total installed price, and they'll handle the paperwork for you to make things a lot less complex.

The availability of state and utility rebates were sourced from the Database of State Incentives for Renewables and Energy Efficiency. The better the rebates, the higher the grade.

Virginia Solar Power Tax Credits

20% of the sales tax paid by an individual Maximum Incentive: Not to exceed $500

Grade: F

Without a strong, mandatory RPS in place, it isn't much of a surprise Richmond politicians have not passed any state tax credits for solar power.

Luckily, all solar installations are eligible for a 30% tax credit from the Feds. There's no cap on the federal tax credit and fortunately for Virginia, having no state rebate to deduct means a larger tax credit coming your way. Sample calculations follow below -- keep scrolling!

About state solar tax credits: State tax credits are not technically free money. However, they are 'credits' and not 'deductions' which means that if you have the tax appetite to take advantage of them, then they can be a 1-to-1 dollar amount off your taxes instead of a fraction of the cost of the system. So that means they can be an important factor to consider. In certain circumstances, state tax credits can provide a very powerful incentive for people to go solar.

(Keep in mind, we are not tax professionals and give no tax advice so please consult a professional before acting on anything we say related to taxes)

The availability of personal tax credits for solar energy were sourced from the Database of State Incentives for Renewables and Energy Efficiency. The higher the tax credit amount, the higher the grade.

Solar Power Performance Payments

$0.15/kWh

Grade: C

As you've surely guessed from the lack of a true RPS, Virginia also lacks any legislation-based (i.e. truly statewide) performance payment program. If you’re lucky enough to be a Dominion Power or TVA customer, however, you’ll cash in on a utility-based incentive.

Dominion offers what it calls a Solar Purchase Program, which is basically a purchase agreement that pays solar panel owners 15 cents for every kilowatt-hour (kWh) their system generates. The homeowner would continue to pay Dominion the regular rate for all the electricity their home needs.

This kind of agreement differs from net metering, in that the power generated by the panels is sold directly to Dominion, and not used to power the customer's home. It's a good deal for homeowners—at least while retail rates are cheaper than $.15/kWh. The program runs through 2018, and is subject to annual renewal thereafter, meaning you could be selling your power for $.15/kWh far into the future.

With possible rate increases above that amount, it starts to look less like a good deal after about 2021, which is when we estimate the cost of electricity will exceed the payments. Hopefully VA will have something better worked out by then, but it's equally likely Dominion will shift to net metering agreements after 2018, which would mean solar homeowners get a good deal now and a fair deal in the future.

For TVA customers, your new solar power system is eligible for TVA’s Green Power Providers Program. Through this program, TVA offers a twenty-year contract to purchase 100% of the energy produced by your solar power system at the retail electric rate, with an additional premium payment of $0.02/kWh for the first ten years of your contract. You get your payment as a credit issued by TVA through your local electric distributor on your monthly bill. If you generate more credit than your electric bill, payment for the excess credits will be issued either monthly or annually, at the discretion of your local electric distributor. Qualified systems must be between 500 W and 50 kW -- no problem!

Explanation of performance payments: Performance payments represent a big chunk of the financial rationale for going solar, and in many instances they make your decision a wise one. For certain states, if you’ve got solar panels on your roof, not only will you be cutting your electric bill down to size, but you'll be getting paid additional cash from your utility company. Pretty awesome, huh? Not only are you generating electricity for yourself, freezing your own popsicles with sun, and feeling like you’re doing something smart for your children or any of the other 4 reasons people go solar, but you are getting PAID!

Utility companies are paying people with solar panels on their roofs because their states say they have to, otherwise they will pay a fee. Therefore, the payment amount to homeowners is typically a little bit less than the amount they would be billed for by the state. For states with these alternative compliance fees, Solar Renewable Energy Credit (SREC) exchanges have popped up. In the above chart, we outlined an estimate of yearly payments a homeowner might expect from the utility company for the SREC credits from their solar energy system.

Expected SREC payments were calculated by using the latest trade values in the SRECtrade database. The availability of feed-in tariffs were sourced from the Database of State Incentives for Renewables and Energy Efficiency. The higher the expected monthly payments, the higher the grade.

If you don’t know what an SREC is, or how they work, check out this great SREC video

Property Tax Exemption

Local Option

Grade: C

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.

About solar property tax exemptions: Property tax exemption status is a pretty big factor when putting together your investment considerations. Many argue that solar power adds approximately 20 times your annual electricity bill savings (if you are owning the system and not leasing. Leasing still has a positive impact on the ability to sell your home though, in our opinion).

For many average-sized solar power systems on a house, that can mean $20,000 to your home value. (Edit April, 2014: Some companies, like Solar Mosaic, are starting to offer traditional style equity-based home loans for such a thing). An additional $20,000 in property tax basis in many states amounts to a big chunk of change owed back to the state. However, many states have complete exemptions from added taxes when you install solar on your home!

The availability of a property tax exemption for solar energy was also sourced from the Database of State Incentives for Renewables and Energy Efficiency. The stronger the tax exemption, the higher the grade.

Sales Tax Exemption

None

Grade: F

In addition to ongoing property tax exemptions, the sales taxes exemptions that we’ve seen in lots of other states would save you 6% on the cost of a solar power system in Virginia. Unfortunately, the equivalent sales taxes exemption that many states have passed is a big fat 0% of the way there. As in, there is no sales tax exemption for the purchase and installation of solar power systems here. That’s a real shame. Sales tax exemptions help the local solar industry in addition to the customer, so they’re a double win.

What's the deal with solar power sales tax exemptions? When states give you a sales tax break on solar, we notice. You should too. State sales tax exemption status for the purchase of solar energy systems were sourced from the Database of State Incentives for Renewables and Energy Efficiency. Sales tax exemptions, if present, were all 100%. A handful of states are completely exempt from sales tax regardless, and therefore received ‘A’ grades by default (OR, DE, MT, AK, and NH).

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The consensus on Virginia solar power rebates and incentives

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 from 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 dismal “F” in our ratings.

66 thoughts on “Virginia Solar Power for your house – rebates, tax credits, savings

  1. Al Robertson says:

    Your write-up on Dominion Virginia Power’s Solar Purchase program neglects to point out that the power you sell to them is taxable. They say they will send you a 1099 each year and report the amount of power you sold to them to the IRS. Thus, depending on your tax bracket, that 0.15/kwh they will pay will only be worth to maybe 0.10 – 0.12/kwh after state and federal income taxes are paid, and that price is locked in for 5 years even as energy prices rise. It’s not such a great deal as it seems. For the net metering arrangement, although the max for a residential installation is 20 kw, they also will not approve an installation that is expected to produce more power than you are expected to use in a year. They don’t want to be buying power from you, in other words. My annual electricity consumption is only about 2000 kwh (all major appliances are gas), so I could only install a solar system that would produce 2000 kwh per year. A 1 kw system that could probably do that is almost too small to bother with.

  2. stasia says:

    i have property that has no electric. i was quoted 34,000 dollars to run the lines. is it legal to do solar and not be hooked to town power? it was alot cheaper for a nice setup

    1. Ben Zientara says:

      Hi, Stasia-

      It should be legal, but you’ll need a battery system to store power for use when the sun isn’t shining, which is going to add quite a bit to the cost. For a typical home, you’ll need at least a 7-8 kW system plus at least 14 kWh of batteries, which would probably shake out to around $40,000. You’d be self-sufficient, though, which is a nice bonus.

  3. Anonymous says:

    Thanks for the great post about solar panels for save energy. Atlantic house buyers

  4. Anonymous says:

    My son-in-law’s Maryland business just paid $300,000 to BUY panels to cover their entire roof. The final steps are being taken this week. They say farewell to $3000 monthly electric bill even with the most conservative policies already. Maryland will also give the additional benefits on top of that! They could have LEASED the panels, but the payback was so much faster and greater they went with the purchase plan. I got all worked up about it for my home in VA Beach, but after reading all this, all I can do is vote and write letters to those making the rules. I can also vote with my feet and switch to anything that uses the least Dominion Power products.

  5. Anonymous says:

    What options are there for people who are now retired with no need for income tax incentives? In Virginia I have read, like WA state– if solar panels are manufactured in Virginia, there are special tax credits.However, that does nothing to help people who are retired and building a new small home to retire into. Any comments are welcome! Thanks:)

  6. Anonymous says:

    I have been using the DSIRE website to keep current with grants and incentives. It’s now 2015, Feb. and the list of incentives is shrinking every year.

  7. Anonymous says:

    I was in the service and I know for a fact that some of the military bases are able to get solar power options in the Hampton Roads area. I am so thrill to see that and hope there is more to come. It would be a very good thing if there were more incentives for all to get this needed technology. I would like to get solor power and I need more information about making it happen. If it wasn’t so much many more would change over.

  8. Anonymous says:

    Tim – has the Dom Pow standby charge affected you? We are considering a 12Kw hybrid wind/solar installation, but worry that the standby charge, now applicable to 10Kw and up for residential systems, may be a problem for us. WOuld love to come see your set-up!

  9. Tim Dolan says:

    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.

  10. Roger says:

    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.

  11. Roger says:

    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?

  12. J.E. Turcotte says:

    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.

  13. Joanne says:

    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!!

  14. Jake Kordvac says:

    The solar panels are really helpful to the environment. My cousin has a solar panel connected to his house.

  15. Tommy Thibodeau says:

    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.

  16. 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.

  17. Richard Blue says:

    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

  18. Dale Hedrick says:

    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.

  19. Fred says:

    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.

  20. michael says:

    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 ?

  21. Steve says:

    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!

  22. Aaron Reed says:

    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!

  23. Holly says:

    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.

  24. 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.

  25. Robert Valentino says:

    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

  26. Tony says:

    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

  27. Don says:

    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.

  28. Dave Ruslander says:

    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.

  29. Joy says:

    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.

  30. Kari says:

    Does anyone know of a solar installer in the SW VA (Abingdon)area?

  31. t says:

    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?

  32. Michael says:

    Please update the Virginia state incentives! Thanks!

  33. Curt Newport says:

    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

  34. Debbie says:

    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

  35. Jack H. Wilson says:

    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?

    1. Dan Hahn says:

      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.

  36. Doug Leidy says:

    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.

    1. Dan Hahn says:

      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.

  37. Frosty says:

    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”?

  38. Jason says:

    I agree we need to push for tax credits or it won’t happpen. Create these discussions locally as well, and contact local representatives!

  39. Dieu says:

    Let start a petition for all Virginia tax credit and incentive. I have had enough of the energy bill going up as they wish.

  40. JIMW says:

    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

  41. mark says:

    Are there no petitions or movements to urge the state government to implement the tax incentive for Va Beach?

  42. pete says:

    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!

  43. SJ says:

    For Jason, the site you referenced on Jan 24:
    http://www.mdpub/SolarPanel/index.html
    does not go anywhere.
    Any updated sites?

  44. SJ says:

    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!

  45. Dan Hahn says:

    Thanks for your advice on the small scale system Jason!

  46. Jason says:

    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.

  47. Angela says:

    Vette,

    did you get any good suggestions? we’d like to follow along too.

  48. Vette says:

    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.

  49. Steve says:

    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?

    1. Anonymous says:

      No they know what that are doing. Dominion showing record profits and Dividens. They just pay for there campaigns so they can stay in our pockets. Solar is less profit for them.

  50. Joy says:

    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

  51. RW says:

    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

  52. AJ says:

    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.

  53. jj says:

    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.

  54. vstone says:

    Jamestown wasn’t even the first place for English settlers, that was the Roanoke Colony in NC!

    1. 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?

  55. Susie Solar says:

    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.

  56. Noel says:

    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?

  57. Bob says:

    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.

  58. john carr says:

    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!

  59. mlaw says:

    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?

  60. JD says:

    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?

  61. sc says:

    Check your geography… Jamestown and Virginia Beach are not the same!

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