The Ultimate Guide to Installing Solar Panels in Virginia For 2025

The use of solar panels in Virginia is becoming very popular. With policies aimed at transitioning the state to 100% renewable energy by 2050 and a climate suited for productive solar installations, both homeowners and businesses across Virginia have a tremendous opportunity to invest in solar panels.

This guide will cover everything you need to know about installing solar panels in Virginia, including:

• Why solar is worthwhile in Virginia
• The process for getting started with a solar panel installation
• Typical installation costs and financing options
• Expert advice on choosing a solar installer
• Frequently asked questions about residential and commercial solar

Whether you're looking to reduce energy bills, pay fewer taxes, or invest in a sustainable future, solar energy can pay dividends for decades to come in Virginia. Let's examine the key considerations for making the switch to solar power.

Is Solar Worth It In Virginia?

With plenty of sunshine and generous solar incentives, the potential for solar in Virginia is great. 

Virginia gets 4.2 - 4.5 peak sun hours a day on average. Florida, the sunshine state, gets 4.5 for comparison. With adequate sun hours and the 32nd highest electric rates in the country, Virginia homeowners and businesses can greatly benefit from a solar panel investment. 

That’s exactly why Virginia is ranked the ninth-best solar state in SEIA’s U.S. Solar Market Insight Report. Over 4,286 MW of solar is installed in the state, equivalent to 476,108 homes supplied by solar energy. 

With electric rates rising steadily, combined with declining solar installation costs and generous solar incentives in Virginia, solar is a worthwhile investment for many of Virginia’s businesses, farmers, and homeowners.  

How to Get Started with Solar Energy in Virginia?

If you’re still relatively new to solar panels, getting started may seem like an overwhelming process. Keep reading below to learn more about how to get started and move forward with confidence. 

Navigating the Solar Installation Process in Virginia

There are a few key steps to get started with a solar panel installation in Virginia.

1. Step one: Request a site visit from a reputable solar company. The site visit will allow the solar company to evaluate the solar feasibility at your business or home. They will look to see if your roof is suitable for solar based on its orientation, shading, and structural considerations. If your roof isn’t suitable for solar panels or you would rather have a ground-mounted system, they will help you determine the best location for that ground mount. Ultimately, the goal of a site visit is to answer all your questions and find the most economical location for your panels.
   
   Pro tip: If a solar company is unwilling to visit your property, it may be a good sign to move on to another company. 
   
   
2. Step two: After deciding to proceed with your installation, you’ll want to select a reputable solar company to design your system, obtain permits, apply for grants, complete the installation, and maintain your system for years to come.
   
   
3. Step three: After selecting your solar installer, they begin the design process and schedule your installation. The average residential installation will take a few days to a week to complete. Larger commercial and agricultural systems will take several weeks to months to design, permit, and install.
   
   
4. Step four: This is the part you’ve been waiting for. The installation is complete, and your system is energized. Now, you can “Save With Every Sunrise.” 

The Cost of Solar Panels In Virginia

The cost of installing solar panels in Virginia will vary depending on several factors like the system size, type of installation, installation location, the selected equipment, and utility interconnection costs.

Virginia homeowners looking to invest in solar energy can anticipate a cost of $3 to $5 per watt when opting to partner with a reputable installation company. A homeowner with an average monthly electric bill of $120 per month can expect to invest around $40,080 upfront, with a net cost of $28,056 after factoring in the 30% federal tax credit.

Virginia businesses and farmers should budget around $2 to $3 per watt for a solar panel installation. For a business with an average monthly electricity bill of $1,200, the initial cost before incentives would be approximately $273,300. However, capitalizing on the tax savings would bring the net cost down to $126,845.

Pro Tool: Try our solar calculator for a quick estimate of your installation cost and savings. 

Financing Options For Solar Panels In Virginia

There are several options available in Virginia for paying for your solar panel system.

Purchasing the system outright with cash or a loan offers the best return on investment in most cases because you will receive all the incentives (tax credit, SRECS, and electric savings) and own a cost-reducing asset. 

If you want to avoid the upfront cost of a solar installation, third-party financing, such as solar leases and power purchase agreements (PPAs), is a possibility. These options allow you to pay little or no upfront cost in exchange for monthly payments. However, the third party will retain ownership of the system and receive all the available incentives. 

Virginia Solar Incentives In 2025

Virginia businesses and homeowners have access to various incentives that make investing in solar energy more affordable and financially rewarding. From tax credits and depreciation benefits to earning money through SRECs and significant USDA REAP grants, these incentives can significantly reduce the cost of going solar. Here’s a breakdown of the key programs available and how they can benefit you.

Federal Tax Credit For Solar

The 30% federal tax credit is a significant incentive for Virginia homeowners and businesses to save on their owed taxes. 

The tax credit is a straightforward 30% for homeowners. However, it gets a bit more complicated for businesses. 

The commercial federal tax credit starts at 30% for systems under 1 MW AC but can grow to 60% if criteria for three different 10% adders are met. For larger systems (over 1 MW AC), the tax credit starts at 6% and can increase to 70% if specific conditions regarding prevailing wages, domestic content, and system location are met.

Depreciation for Businesses

Business owners who invest in solar energy can take advantage of depreciation benefits, significantly enhancing the financial attractiveness of going solar. 60% of federal depreciation can be accelerated to year one, providing a major upfront tax advantage. The remaining 40% and state-level depreciation will be spread out over five years under the Modified Accelerated Cost Recovery System (MACRS) schedule. 

Solar Renewable Energy Credits (SRECs)

SRECs are an additional financial benefit for both residential and commercial solar projects. These credits pay you for the electricity your solar system generates, with one SREC earned for every 1,000 kilowatt-hours (kWh) produced. As of May 2024, SRECs in Virginia were valued at $35 each, but keep in mind that this rate can vary significantly based on market demand and conditions. This ongoing benefit can add substantial value to your solar investment over time.

USDA REAP Grant

Virginia farmers and qualifying businesses can take advantage of the USDA REAP Grant to significantly reduce solar installation costs. This grant, available through 2027, covers up to 50% of total project expenses. While this is a valuable opportunity, it’s important to note that the application process is lengthy and highly competitive, often taking over a year from submission to funding.

The USDA REAP grant accepts applications three times a year, with deadlines on March 31, September 30, and December 31. In 2025, the 25% grant will be available during all three funding rounds. For the 50% funding grant, applications will open on July 1, 2025, for the September funding cycle, with no submissions accepted before this date.

The application process requires extensive paperwork, including 12 months of utility bills, financial statements for all affiliated entities, and proof of funds for project completion. While we’ll provide support every step of the way—from design and documentation to final submission—active participation from applicants is essential to ensure success.

Net Metering

Virginia is seeing changes in how net metering works for solar panel owners. The current system lets excess energy credits roll over month to month, but they are lost at the end of the year and aren't paid out.

Upcoming proposals from utilities like Appalachian Power and Dominion could make net metering less favorable, with changes potentially rolling out between 2025 and 2026. Solar owners are advised to act quickly to be grandfathered under the current system before these adjustments take place.

Meter aggregation, or virtual net metering, is another important consideration for Virginians with multiple electric meters. This option lets solar owners offset energy use across several meters, provided they are serviced by investor-owned utilities like Dominion or Appalachian Power. It requires meeting specific criteria, such as having the same account holder and contiguous properties. However, rate class adjustments and potential aggregation fees could impact the overall savings, so early planning and utility involvement are crucial.

The Average Payback Period For Solar In Virginia

Solar panel systems pay for themselves through immediate tax savings and long-term energy savings. With the tax credit available for use in the initial year to reduce your federal tax liabilities and accelerated depreciation benefits for businesses, a substantial portion of the solar panel investment's returns are front-loaded.

Virginia homeowners can expect an average payback period of 16 years on their solar panels, with an ROI of 9.55%.

Businesses in Virginia that choose to invest in solar panels can expect to recoup their initial investment in around 12.63 years, with a solid 11.98% return on investment.

Solar panels typically have a lifespan of 25 to 30 years, backed by a warranty for the same duration. This means homeowners can enjoy over a decade of free electricity, while businesses can benefit for more than two decades.

Ultimately, you must weigh the expected lifespan against your tax savings, projected energy savings, and environmental impact to determine if a solar panel system is the right investment for you. While solar may be a valuable investment for many Virginia residents, it’s not right for everyone.

* Sources: Average Annual Stock Market Return and Average Annual Roth IRA Return

Why Are People Going Solar In Virginia?

Paradise Energy has helped hundreds of businesses, farmers, and homeowners across the Commonwealth invest in solar. For Virginia residents, solar presents an excellent investment opportunity, offering long-term control over a fixed cost and immediate tax savings.

Here’s what your neighbors are saying about their solar investment.

Visit our project gallery to view other solar installations in Virginia.

Frequently Asked Questions When Going Solar In Virginia

Is Solar Right For You?

Virginia's strong solar potential, lucrative incentives, favorable policies, and long-term energy savings combine to make a compelling case that going solar is a wise investment for many homeowners, farmers, and other businesses across the Commonwealth.

If you would like to learn more about how solar could help you, click the button to get started. Our team of solar consultants will answer your questions and provide a quote with all the information you need to make an informed investment decision.

If you’re not ready for a quote, use our solar payback calculator or visit our learning center for valuable blogs, videos, and guides that will help you on your solar journey.