Virginia Commercial Solar Incentives & Rebates

There are only a few commercial solar incentives Virginia offers. However, considering the state’s average sunlight of almost 250 days, this still creates a great atmosphere for solar users to save up to 60% on their solar investment. We have compiled a list of the most important Virginia commercial solar incentives. Using our Energy Savings Payment Model (ESP), you can minimize your upfront expense, increase property value, and receive instant energy savings. 

Modified Accelerated Cost-Recovery Systems (MACRS)

In Virginia, the Modified Accelerated Cost-Recovery System (MACRS) plays a crucial role in incentivizing solar investments for businesses. Under MACRS, solar systems are classified as five-year property, allowing businesses to recover investments through accelerated depreciation deductions over a shorter period. This favorable depreciation schedule enhances the financial attractiveness of solar projects by accelerating tax benefits, thereby improving the return on investment. Additionally, the Tax Cuts and Jobs Act of 2017 expanded bonus depreciation to 100% for qualified solar property placed in service after September 27, 2017, further enhancing the financial incentives for solar investments in Virginia. As a result, businesses in Virginia can leverage MACRS to realize significant tax savings while advancing their sustainability goals through solar energy adoption.

Business Investment Tax Credit (ITC)

Business Investment Tax Credit (ITC) Virginia

Business Investment Tax Credit (ITC) Virginia

The Investment Tax Credit (ITC) is a federal tax credit available to businesses, nonprofits, and local governments that invest in solar energy systems. It offers a tax credit for a percentage of the cost of solar systems installed during the tax year. Commercial solar customers in Virginia who install solar systems are eligible for a 30% ITC if the system is placed in service in 2022 or later and begins construction before 2033. To apply for the ITC, businesses must ensure that the solar system meets certain eligibility criteria, using new equipment, and not being leased to a tax-exempt entity.

Renewable Electricity Production Tax Credit (PTC)

The Production Tax Credit (PTC) is another federal tax credit available to businesses, nonprofits, and local governments that generate electricity from solar and other qualifying technologies. It provides a per kilowatt-hour (kWh) tax credit for the first 10 years of a solar system’s operation. Commercial solar customers in Virginia can opt for a 2.75 ¢/kWh PTC if their solar system meets labor requirements issued by the Treasury Department or is under 1 megawatt (MW) in size. Unlike the ITC, the PTC offers tax credits earned over time based on electricity generation, making it suitable for businesses seeking a more attractive cash flow.

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Net Metering in Virginia 2024

Net-Metering in Virginia

Net-Metering in Virginia

Virginia laws allow net metering for commercial solar customers with systems up to 3 MW capacity. This allows solar customers to send their excess energy back to the grid which is then credited to your power bill. Monthly net excess generation (NEG) is carried forward, and at the end of a 12-month period, customers can choose to roll over credits or sell them to the utility.

How to enroll in net metering in Virginia

While enrollment will be handled by your solar company, according to Dominion Energy, follow these steps necessary to enroll for net metering in Virginia:

  1. Begin by completing and submitting the net metering application form to Dominion Energy or utility company of choice
  2. Alongside your application, provide proof of insurance for your solar array.
  3. The utility will carefully assess your application, ensuring that your solar installation meets the necessary standards outlined by UL1741 and IEEE1547.
  4. Upon approval, you can proceed with the installation of your solar energy system.
  5. Following the installation, obtain a final electrical inspection from your local inspection authority, and submit a copy to the utility.
  6. Once reviewed and approved, you’ll receive written authorization to activate your solar system and participate in the net metering program.

Additional Local Commercial Solar Incentives Virginia: Incentives, Rebates, & Grants

Apart from federal incentives, the Mother of States only offers 3 major commercial solar incentives Virginia businesses can explore. These include net metering, a property tax exemption, and Solar Renewable Energy Certificates. While we have covered net metering above, here is what you stand to gain from the SRECs and tax exemption.

Virginia Solar Renewable Energy Credits(SRECs)

In 2020, the Mother of States established its Clean Economy Act which saw the introduction of the SRECs through its renewable portfolio standard. The program rewards solar panel owners with one SREC for every 1,000 kWh of electricity generated, which can be sold for approximately $45 to $70 each as of 2024. These credits serve as an ongoing incentive for producing clean energy, offering additional income beyond typical electric bill savings. The credits can be sold to local utilities and other entities subject to renewable energy mandates, helping them meet clean energy targets established by the 2020 Virginia Clean Economy Act

Virginia Property Tax Exemption for Solar

Virginia passed Senate Bill 686 in 2023 which made property tax exemption mandatory for solar energy upgrades. This means that solar energy upgrades that increase the value of your home are not factored into your tax calculation. Prior to this, property tax exemption was optional for the county. To qualify for property tax incentives, the local building department or the Virginia Department of Environmental Quality must inspect your home solar system and certify it.

USDA – High Energy Cost Grant Program

USDA - High Energy Cost Grant Program

High Energy Cost Grant Program

The Mother of States houses 41,500 farms spread across 7.7 million acres according to the Department of Agriculture. This is why rural and agricultural and rural small businesses can take advantage of this commercial solar incentive in Virginia. The USDA through the Rural Energy of America Program offers to pay 25% up to $500,000 for solar upgrades for this type of business. The program has paid over $2 billion since its inception. To qualify, you must be an agricultural producer or a rural business. Application opens for the year 2024 from June 30, 2024, through to September 30, 2024.

Solar Potential in Virginia: Incentives and Savings

Virginia boasts significant solar potential, driven by its ample sunlight and vast available land. The state has been making strides in harnessing this potential, with policies and initiatives aimed at promoting solar energy adoption. More recently, Virginia’s renewable portfolio standard (RPS) requires phase II Utilities to generate 100% of their energy from renewable sources by 2045. This is a great step for the solar industry in Virginia as this might increase the number of state-wide solar incentives. Currently, you can expect a payback period for your solar investment of up to 7 years with incentives.

Understanding the Electric Utility Landscape and Rates in Virginia

Virginia’s electricity cost is around the average despite rate volatility over the years. The state’s utility market is regulated or at least partly regulated, with investor-owned utilities dominating the sector. Rates are determined through regulatory processes overseen by the Virginia State Corporation Commission (SCC). Factors influencing rates include generation sources, infrastructure investments, and regulatory policies, all of which impact consumers’ energy costs and choices. In a more recent bill, utilities are trying to further deregulate the Virginia electricity landscape according to Senate Bill 591, giving more freedom to retail customers of electric energy in Virginia, and allowing them to choose renewable energy options from any licensed supplier.

Impact on Solar Energy Decisions in Virginia

Solar energy provides an inexhaustible source of energy. With Virginia’s climate, solar users can harness this energy to reduce or even eliminate energy bills, reduce reliance on fossils, increase property value without having to worry about paying more property tax on the added value and obtain energy independence. With the several commercial solar incentives Virginia offers, you can also expect more affordability in your solar installation. Furthermore, with Commercial-solar Proprietary Energy Savings Payment Model (ESPM), you can enjoy further positive impact on your solar investment.

Are Solar Panels Worth It in Virginia?

Ample sunshine and a supportive regulatory environment, Virginia presents a compelling case for solar panel investments. The state offers various incentives and programs to encourage solar adoption, making it financially feasible for commercial users to harness solar energy. Additionally, the declining costs of solar panels over the past decade have enhanced the economic viability of solar projects for businesses in Virginia. While individual circumstances and industry-specific factors should be considered, the overall landscape in Virginia suggests that solar panels can be a worthwhile investment for commercial users. Consulting with a reputable solar company like commercial-solar.org can provide tailored insights and guidance to make informed decisions regarding solar adoption in Virginia.

Why Choose Commercial-Solar.org Solar Company in Virginia?

Commercial-Solar.org offers a unique Energy Savings Payment Model (ESP), providing immediate energy savings and positive cash flow from day one. With zero upfront expenses, clients benefit from tax advantages and increased property value while Solar One assumes all risk and maintains the system for free until it’s paid off. By front-loading federal and state subsidies, clients can own their solar system outright and begin saving money as soon as it’s operational. With completed projects for numerous Fortune 500 companies and a commitment to long-term savings, Commercial-Solar.org offers a reliable solution to drastically cut energy bills and promote sustainability.

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