Virginia Solar Power Rebates, Tax Credits, and Incentives

Solar Legislator Score:

Updated 1/24/09 -

STATE LEGISLATION

State Bill 1416 was enacted in April of 2007, and is referred to as the Voluntary Renewable Energy Portfolio Goal: a 12% conversion to clean energy sources by the year 2022, to be voluntarily achieved by investor-owned utilities. Applicable energy sources are solar thermal electric, photovoltaics, wind, biomass, hydroelectric, geothermal electric, energy from waste, anaerobic digestion, tidal energy, and wave energy; However, solar and wind power receive double credit toward the Renewables Portfolio Standard objectives. Illinois and Missouri are currently the only other two states that have initiated voluntary rather than mandatory compliance with RPS goals.

About the same time, Governor Timothy M. Kaine signed Executive Order 48 requiring
all state agencies and institutions constructing or renovating state-owned facilities to meet stringent energy performance standards.

More recently, on September 12, 2007, Governor Kaine announced the Virginia Energy Plan, which “would reduce the rate of growth in energy use by 40 percent, reduce greenhouse gas emissions by 30 percent, and seeks to increase in-state energy production by 20 percent. The Plan also calls for expanded consumer energy education, and capitalizes on areas where Virginia has a strategic advantage for economic development and research and development.” Interestingly, there is no mention of solar energy in the news release (although the article devoted several paragraphs to the Commonwealth’s switch to fluorescent bulbs); more significantly, there are few solar references in the 180-page document provided by the Commonwealth of Virginia which describes the plan.

While it is clear Virginia’s energy policies attempt to reduce consumption, improve energy efficiency, and utilize clean energy alternatives, it is equally clear increasing use of solar energy has not been high on the Commonwealth’s priority list. So, relative to more progressive solar states like California, Virginia earns a solar legislation rating of “mediocre”. A bit distressing, since Virginia doesn’t receive that much less sunshine over the course of the year.

STATE INCENTIVE PROGRAMS, UTILITY REBATES, UTILITY LOANS, and UTILITY INCENTIVES

Net Metering was implemented in Virginia in 2000 for commercial, residential, nonprofit, schools, local government, state government, and institutional sectors. Rules apply to solar thermal electric, photovoltaics, wind, biomass, hydroelectric, geothermal electric, municipal solid waste, tidal energy, and wave energy. Limits on size were increased in 2004 to the current 500 kW for non-residential and 10 kW for residential.

Further changes in 2007 now allow for customers to negotiate payment from the utility company for net excess generation; otherwise monthly excess generation is carried forward as a credit against future billing. Click here to peruse the applicable code. If you don’t know what in the world net metering is, please check out our brief net-metering overview here. If you’re still confused after reading that article, we recommend contacting one of our Virginia local solar energy experts who will be able to answer Virginia net metering questions and any others you may have.

On more of a heartening note, large and small businesses as well as homeowners are eligible for a Local Option Property Tax Exemption for Solar. So, think about that for a second. By installing a solar system, you will increase the value of your home by 20 times your annual utility savings. After doing the math, (which again one of our solar experts will be more than happy to show you), this can amount to tens of thousands of dollars. It’s like attaching a new bathroom, furnace, and living room to your home, but you aren’t taxed for it – ever!

Virginia allows any municipality to fully or partially exempt solar installations from property taxes. Cities and counties currently offering an exemption include: Albemarle, Alexandria, Charlottesville, Chesterfield, Dinwiddie, Fairfax, Falls Church, Hampton, Hanover, Henrico, Isle of Wight, King and Queen, Loudoun, Lynchburg, Prince William, Pulaski, Richlands, Roanoke, Spotsylvania, Warren and Wise. More info is here.

Wind and solar are covered under provisions of the TVA – Green Power Switch Generation Partners Program for both commercial and residential installations. However, to be eligible, you need to participate in the Green Power Switch Generation Partners program. This is an incentive of $500 (residential only) plus $0.15/kWh (residential/small-commercial systems with a minimum output of 500 watts AC and a maximum of 50 kW) or $0.20/kWh (commercial with 50 kW maximum – or a higher negotiated system size) for 10 years.

These figures may seem a little confusing if you’re new to solar. Dave wrote an article a few months ago explaining difference between AC and DC watts. By participating in the TVA program, you can earn a lot of cash for producing electricity. Since an average Virginia home uses about 1200kWh a month and you install enough solar to zero out your bill, you’d be in line to receive about $180 a month from TVA. Here are some more details on TVA. Or, if you’d appreciate some personalized assistance, have one of our Virginia solar experts contact you.

If by any chance you’re involved in new construction (and my condolences for the economy recently creating havoc for the industry), you should know about the Arlington County Green Building Incentive Program. It encourages developers to meet “green” building standards. Simply mentioning those building incentives to your construction team may save you a lot of money and also will green up your project.

EXAMPLE RESIDENTIAL SOLAR INSTALLATION

With nearly 450,000 people, Virginia Beach is the largest city in Virginia and has been a popular vacation spot since the late 1800s. In addition to having “the longest pleasure beach in the world”, it enjoys an historical richness that adds to the appeal which draws 3 million visitors each year. In case you didn’t know, the original settlement was founded in 1607 and named Jamestown, becoming home to the first English settlers to set foot in the New World; and yes, that included the famous Captain John Smith. The city was incorporated as Virginia Beach in 1906. (*EDIT* from reader comments below.. yeah, so this Jamestown thing is not very accurate. Thanks for pointing this out to us Virginians! We’re glad you’re reading so closely).

Among the few things the intrepid colonial settlers didn’t have to worry about was the cost or source of electricity. Although today’s residents are favored with the fairly low rates charged by Dominion Virginia Power Company, average electrical consumption is a relatively high 14,700 kWh/year. Both the cost and the source of electrical power are an issue which argues in favor of a solar installation.

Virginia gets a fair amount of sunshine over the course of the year. Check out the map above and you can see the solar rating is on par with Louisiana, home to the most progressive solar incentives in the country. If you’re using about 1200kWh a month and are looking to cut your power bill in half, you’d need about 600 square feet of roof area for panels in Virginia Beach. Projected cost for both equipment and installation is a mid-range estimate of about $8/watt or $48,000, offset by the 30% federal tax credit and participation in the TVA program. Before participation in TVA, your net cost is $33,600. 

This may seem like a lot of cash. However, you can secure very reasonable rates on green energy loans (as low as 6%). If you crunch the numbers, we find many Virginians are able to install a solar system and pay the loan monthly at parity with their existing electric bill. All this, and you are able to lock in a fixed price for the power you produce and possibly get into a lower energy electric rate tier from the power company for using less.

Now let’s turn to the TVA payments. By enrolling in the program, you’ll receive checks amounting to roughly $180 a month. Multiply that out over the 25 year life of the system and you’re looking at over $50,000 right there!

Especially if you’ve got the tax appetite, there’s a lot to consider here. One of our personable solar experts will gladly sort all this out for you and provide a good estimate based on your unique location. Details from this example:

• Increase in Property Value: $8,280 to $15,147
• Exempt from Property Tax: YES
• 25-year Utility Savings: $17,372 to $31,779
• TVA cash payments over 25 years: ($180/mo totaling roughly $54,000)
  
• Greenhouse Gas (CO2) Saved:
  over 25-year system life 151.0 tons

CONSENSUS

The recently announced Virginia Energy Plan could be described as a defining of objectives more than a detailed action plan. The Governor and the State Legislators need to use the new energy plan to incorporate effective solar energy incentives that will give Virginia “a place in the sun” that goes beyond its sandy beaches. However, by participating in TVA and with the newly passed 30% tax credit, solar is becoming an intriguing option in the Old Dominion.
Click here to have Virginia solar experts contact you.