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.

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.