Virginia’s Key Solar Incentives: A Breakdown

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Virginia is increasingly recognized for its commitment to renewable energy; solar power is no exception. With various incentives designed to make solar installations more affordable and accessible, the state is paving the way for homeowners and businesses to embrace clean energy. From state tax credits and net metering to utility rebates, Virginia offers several financial benefits that can help reduce the cost of solar systems and enhance your return on investment. In this article, we’ll break down Virginia’s key solar incentives, explaining how they work and how you can take full advantage of them to lower your energy bills and contribute to a more sustainable future.

The Residential Clean Energy Credit

The Residential Clean Energy Credit, previously known as the Federal Investment Tax Credit (ITC), can reduce the cost of your solar panel system by 30%. This incentive covers the entire system, including equipment, labor, permitting, and sales tax.

To claim this incentive, you need to purchase your system with cash or a solar loan, as leasing does not qualify for the ITC. You must have a sufficient federal tax liability to use the credit, though any unused portion can be rolled over year-to-year until the ITC expires at the end of 2034. Direct payment of the ITC is only available to tax-exempt entities, such as nonprofit organizations.

Real Property Tax Exemption

In Virginia, counties, cities, and towns can fully or partially exempt solar energy equipment and recycling equipment from local property taxes. This provision primarily targets non-commercial users, as commercial entities enjoy full exemption from state and local taxes under the Commercial Property Tax Exemption for Solar.

Net Metering

In Virginia, net metering operates on a first-come, first-served basis until the total generating capacity owned and operated by customer-generators equals 1% of an electric distribution company’s adjusted peak-load forecast for the previous year in Virginia. This opportunity extends to customers of investor-owned utilities, including competitive suppliers, and electric cooperatives. However, customers of municipal utilities are not eligible for net metering.

Shared Solar Program

The Shared Solar Program is an initiative designed to expand access to solar energy for customers who may not have the ability to install solar panels on their own properties. Shared solar, also known as community solar, allows multiple participants to share the benefits of a single solar energy system located off-site. 

Through this program, individuals or entities can subscribe to a portion of the electricity generated by a shared solar facility. Participants typically receive credits on their electricity bills for the energy produced by their share of the system. This model enables renters, homeowners with shaded roofs, or those with financial constraints to access clean energy and potentially lower their electricity costs without needing to install solar panels on their own properties.

Solar for All

• The Community Power Coalition (CPC)’s SFA program, “Powering America Together,” will collaborate with and enhance the impact of the US Department of Energy’s National Community Solar Partnership and Community Power Accelerator program. Led by Inclusive Prosperity Capital, Inc., CPC comprises seasoned community solar experts who have contributed to the Community Power Accelerator as developers, lenders, trainers, and technical assistance providers. The program aims to support the development of low-income community solar projects, reduce carbon emissions, lower energy costs, and promote quality jobs, community wealth-building, energy resilience, and equitable workforce development. 
• The Solar for All: Virginia Energy Program (SAVE) aims to promote energy savings and enhance resilience by expanding access to solar and solar-plus-storage funding for low-income and disadvantaged communities. SFA funds will be utilized to transform Virginia’s low-income solar market by leveraging private capital and fostering the formation and expansion of solar businesses. SAVE will tackle existing market barriers by reducing upfront costs, enabling broader access to leasing and power purchase agreements, increasing financing options for low-income homeowners, and removing interconnection obstacles. The program will offer various funding channels to incentivize direct ownership, third-party ownership, and subscriber-based solar energy programs.
• The Southeast Rural Power: SFA Coalition (SE Rural Power Coalition), led by Groundswell, will launch and implement the Southeast Rural Power: SFA Program (SE Rural Power SFA Program). This initiative aims to deliver residential-serving community solar, energy storage to enhance community resilience, direct solar savings, energy efficiency improvements, and greenhouse gas emissions reduction for low-income and disadvantaged households. The coalition comprises eligible subrecipient nonprofit electric cooperatives and municipal utilities serving some of the most impoverished and energy-burdened communities in the Southeast. The program’s implementation strategy focuses on strengthening and transforming the residential solar market in the region by supporting new developers and installers with entrepreneurship resources, comprehensive project development and O&M support services, project financing assistance, and workforce development programs, including pre-apprenticeships and apprenticeships. It also includes community outreach and education initiatives. Headquartered in DC, Groundswell will operate its SE Rural Power Coalition program across eight states in the American Southeast.
• The Clean Energy Fund of Texas (TxCEF), in collaboration with the Bullard Center for Environmental and Climate Justice at Texas Southern University (BCECJ), collectively known as CEFBC, is dedicated to deploying technical assistance, private capital, and grants to minority-serving institutions. Together, these organizations aim to facilitate the establishment of residential-serving community solar projects in low-income and disadvantaged communities that face significant challenges related to energy policy and grid vulnerability. These projects are anticipated to result in emissions reductions, savings on household utility bills, generation of shared revenues through community ownership, and the mobilization of private capital. 

Disclaimer

The information provided herein is for informational purposes only and is accurate as of the time of publication. Please be aware that the solar energy landscape, including technology, regulations, incentives, and market conditions, changes frequently. Therefore, it is essential to consult with qualified experts and professionals before making any decisions regarding solar energy installations or investments. This will ensure that you receive the most current and applicable advice tailored to your specific circumstances.