Virginia Solar Incentives, Tax Credits & Rebates (2024 Guide)

What Are the Best Virginia Solar Incentives?

Virginia's businesses, farmers, and homeowners have access to significant incentives to invest in solar energy.

Federal Investment Tax Credit (ITC)

For Virginia businesses and farmers, the federal solar tax credit currently offers a 30% incentive on solar installations under 1 MW of AC power. Additionally, businesses and agricultural producers may qualify for “adders,” which can increase the tax credit to 40% or more. These adders include an extra 10% for systems located in energy communities, using domestic content, or serving low-income areas.

For larger solar installations over 1 MW, the tax credit starts at 6%, with the potential to increase to 30% if prevailing wage and apprenticeship requirements are met.

Businesses can carry the credit forward 22 years or go back three years until the credit is fully used.

Additionally, for those without enough tax liability to use the credit, the transferability rule allows businesses to sell the credit to a third party.

For Virginia homeowners, the tax credit offers a 30% reduction on the total cost of solar installations. While homeowners cannot sell their credits like businesses, they can carry any unused portion of the credit forward for up to 10 years.

Learn more about the federal tax credit.

Solar Renewable Energy Credits (SRECs)

The Virginia Clean Economy Act mandates that Dominion Energy and Appalachian Power go 100% carbon-free by 2045 and 2050. To meet these goals, they need to purchase Solar Renewable Energy Credits (SRECs) from solar producers in Virginia. This provides an opportunity for businesses, farmers, and homeowners to reduce electricity bills and earn extra income.

SRECs are earned by generating 1,000 kWh of solar energy and can be sold to utility companies to help them meet their renewable energy targets. To sell SRECs, you’ll need to register your system and work with a broker, but if you’ve installed solar through Paradise Energy, they handle this process for you. Virginia SREC prices currently range from $20 to $50, with market values around $35 per credit.

Although SRECs won’t make you rich, they offer an easy way to earn a few hundred to a few thousand dollars annually, depending on your system size. It’s a simple incentive that makes solar even more financially rewarding for Virginians.

Net Metering

Net metering allows Virginia businesses, farmers, and homeowners with grid-tied solar systems to receive credit for the excess electricity they generate. During sunny periods, any surplus energy your solar system produces is sent to the utility grid, and you receive a one-for-one credit at the retail rate. This credit can be used later, such as at night, to offset electricity usage, essentially turning the utility grid into a free storage system for your solar energy.

Virginia’s net metering rules ensure that utility companies credit solar owners at the retail rate, making it easier to offset electricity costs with solar power. Residential systems are capped at 20 kW, non-residential systems at 1 MW, and agricultural systems at 500 kW, ensuring solar installations don’t exceed 100% of a customer’s annual usage. At the year's end, unused credits can be rolled over or cashed out at a lower avoided-cost rate.

Virginia allows meter aggregation for qualifying systems. This benefit enables solar owners to offset multiple meters with one system, even if the solar isn’t connected to all meters. However, investor-owned utilities only permit this process.

Check out our net metering blog to learn more.

USDA REAP Grant

Farmers and qualifying businesses in Virginia can reduce their solar investment costs through the USDA REAP Grant, which currently offers up to 50% funding.

This grant is a great opportunity but involves a lengthy process, often taking over a year to secure. Our grant writing team at Paradise Energy will manage the application process. Still, it will require active participation, as applicants must gather detailed information and documentation.

The application process begins once the solar proposal is signed. Our grant writer will assist in navigating the necessary steps, which include submitting utility bills, securing SAM.gov registration, and providing financial documents.

While the process is thorough and can be time-consuming, the grant provides substantial financial benefits.

To learn more about how to take advantage of this opportunity, check out our USDA Grant guide.

Frequently Asked Questions

Who is Paradise Energy Solutions?

Founded in 2009, Paradise Energy Solutions is a family-owned, full-service solar energy company dedicated to helping people make smart, sustainable choices for both their finances and the environment. We've helped hundreds of Virginia businesses, farmers, and homeowners invest in solar energy, providing them with long-term savings and energy independence.

While installing solar is what we do, it's our team that truly sets us apart. From the four brothers who built this company to our 100+ team members, we're here to guide you toward the best investment for your business, farm, or home—even if that means solar isn't the right fit for you.

How much does solar cost to install in Virginia?

The cost of solar panels can vary depending on several factors, including your energy usage and the specifics of your installation site. To get an accurate estimate, we need to consider details like how much electricity your home, farm, or business consumes, shading, and the type of installation.

For example, if your average monthly electric bill is around $120, you'll likely need a 10 kW solar system, costing about $38,960 before incentives and $27,272 after applying available solar incentives like the federal tax credit. For higher energy usage, such as a $600 monthly electric bill, a 50 kW system may be required, with an estimated cost of $147,500 before incentives and $66,803 after incentives.

Use our solar cost calculator to get an estimate of how much solar would cost for you.

Are there any Virginia-specific solar incentives available?

Virginia does not currently offer any unique state-specific solar incentives. While Virginia's net metering rules and the SREC (Solar Renewable Energy Certificate) market differ slightly from those of other states, the core benefits for residents, farmers, and business owners remain similar.

Solar owners in Virginia can still take advantage of federal incentives. These include the federal solar tax credit, depreciation benefits for commercial systems, and the USDA REAP Grant.

What is the ROI and Payback for Solar in Virginia?

Virginia farmers can expect a solid return on investment with solar energy, averaging 20.9%, with a payback period of just 5.5 years.

For Virginia businesses, the average solar system size is 106 kW, producing 129,515 kWh annually with a 20% ROI. The payback period is typically six years.

Virginia homeowners can expect a 9.55% ROI on their solar investment. While the average payback period is 16 years, solar systems generally last 25 to 30 years.

These figures are based on actual data from Paradise Energy's customers in 2023.

What warranties are included with a solar system?

Solar panels are built to last, and they come with warranties to back that. Most panels have a performance warranty lasting 25 or 30 years, guaranteeing their efficiency will stay above a certain level. In addition to performance warranties, solar panels also include a product warranty, typically ranging from 12 to 25 years.

The inverters also come with warranties lasting anywhere from 12 to 25 years, depending on the brand and type of inverter.

At Paradise Energy, we go a step further to protect your investment with our Triple Ten Guarantee. For the first 10 years, we guarantee your system's production and cover any workmanship issues, giving you extra peace of mind whether you're a business leader, farmer, or homeowner.

Visit our product warranties blog to learn more.