Virginia Solar Incentives & Rebates (2025): Complete Guide
Virginia homeowners can save $10,000-18,000+ on solar installations through federal tax credits, state tax exemptions, Dominion Energy programs, and net metering policies. Here's everything you need to know about Virginia solar incentives in 2025.
Virginia Solar Incentives at a Glance
1.Federal Solar Tax Credit (30% ITC)
The federal Investment Tax Credit (ITC) is the largest solar incentive available to Virginia homeowners, allowing you to deduct 30% of your total solar system cost from your federal taxes.
How Much Can You Save?
- •$20,000 system = $6,000 federal tax credit
- •$30,000 system = $9,000 federal tax credit
- •$40,000 system = $12,000 federal tax credit
Important: Tax Credit vs. Rebate
The ITC is a tax credit, not a refund. You need to owe at least that much in federal taxes to benefit fully. The credit can be carried forward to future tax years if you don't owe enough in one year.
Eligibility Requirements:
- ✓System must be installed between 2022-2032
- ✓Property must be your primary or secondary residence in Virginia
- ✓You must own the solar system (not leased)
- ✓System must be new or being used for the first time
[VERIFY] The 30% ITC rate is locked in through 2032, then drops to 26% in 2033 and 22% in 2034 before expiring entirely.
2.Virginia Tax Exemptions
Property Tax Exemption
[VERIFY] Virginia exempts solar energy equipment and installation from property tax assessments through 2030. This means your property taxes won't increase even though solar panels add significant value to your home.
Estimated Savings:
- •Annual savings: $200-400/year
- •Through 2030 (exemption period): $1,200-2,400 total savings
Note: Virginia's property tax exemption is currently authorized through 2030. Check with your local tax assessor for updates on extension beyond this date.
Sales Tax Exemption
[VERIFY] Virginia exempts certified solar energy equipment and installation from the state's sales and use tax. This immediately reduces your upfront costs by eliminating the 5.3%+ sales tax.
Example Savings:
*Based on 5.3% state rate; local rates may add additional savings
3.Dominion Energy Solar Programs
Dominion Energy Virginia, which serves most of the state, offers several programs for residential solar customers:
Solar Purchase Program
[VERIFY] Dominion Energy will purchase Renewable Energy Certificates (RECs) generated by your solar system over a 15-year period.
- •Payment: $0.10-0.30 per kWh generated (rates vary)
- •Duration: 15-year agreement
- •Estimated value: $500-1,000/year for typical residential systems
Net Metering
[VERIFY] Virginia law requires utilities to offer net metering for residential solar systems up to 20 kW.
- •Excess energy sent to the grid earns credits at retail rate
- •Credits roll over month-to-month
- •Annual true-up: excess credits paid at avoided-cost rate
Streamlined Interconnection
Dominion Energy provides a simplified interconnection process for residential solar systems under 25 kW, making it easier and faster to connect your system to the grid.
Note: If you're served by Appalachian Power or other Virginia utilities, contact them directly for their specific solar programs and net metering policies.
4.Virginia Net Metering Policies
[VERIFY] Virginia's net metering law ensures fair compensation for solar energy producers across the state:
How Virginia Net Metering Works:
During the Day
When your system produces more energy than you use, excess electricity is exported to the grid. Your meter tracks this export.
Credits Earned
You receive credits at the retail electricity rate (the same rate you pay for power). These credits appear on your utility bill.
Using Credits
At night or on cloudy days, you draw power from the grid and use your accumulated credits to offset the cost.
Annual True-Up
At the end of each year, any remaining excess credits are paid out at the utility's avoided-cost rate (typically 2-4 cents per kWh).
Typical Annual Savings with Net Metering:
5.Example: Total Savings Breakdown
Here's a real-world example of how these incentives stack for a typical 10 kW solar installation in Virginia:
Including all federal, state, and utility incentives (first 5 years)
Plus ongoing savings: A 10 kW system in Virginia typically saves $1,500-2,000/year on electricity bills through net metering. The system pays for itself in 7-10 years, then provides free electricity for 15+ more years.
6.How to Claim Virginia Solar Incentives
Choose a Licensed Virginia Solar Installer
Select a licensed contractor experienced with Virginia requirements. They'll handle permits, installation, and utility interconnection paperwork.
Complete Installation & Interconnection
Your installer will complete the installation and handle interconnection with Dominion Energy or your local utility. Keep all receipts and documentation for tax purposes.
File for Federal Tax Credit
Complete IRS Form 5695 with your tax return for the year your system was installed. Consult a tax professional for guidance on maximizing your credit.
Enroll in Utility Programs
Sign up for Dominion Energy's Solar Purchase Program and net metering. Your installer can help with enrollment or contact Dominion directly.
Frequently Asked Questions
Can I combine the federal tax credit with Virginia state incentives?
Yes! All Virginia solar incentives stack. You can claim the federal ITC, property tax exemption, sales tax exemption, and participate in Dominion Energy programs simultaneously.
What happens to Virginia's property tax exemption after 2030?
[VERIFY] Virginia's solar property tax exemption is currently authorized through 2030. The state legislature may extend or make it permanent. Check with Virginia's Department of Mines, Minerals and Energy for updates.
How does net metering work if I produce more than I use?
[VERIFY] Excess credits roll over month-to-month throughout the year. At your annual anniversary date, any remaining credits are paid out at the utility's avoided-cost rate (typically 2-4 cents per kWh), which is lower than retail rates.
Is solar worth it in Virginia without state rebates?
Yes! While Virginia doesn't offer state cash rebates, the federal tax credit combined with tax exemptions and Dominion Energy's programs still provide substantial savings. The 30% federal credit alone makes solar financially attractive for most Virginia homeowners.
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