Last Updated: May 19, 2026 | Reviewed by: Dylan DeSantis, SolarMetric
Quick Answer
Solar panels cost an average of $2.93 per watt installed in Virginia — $29,300 for a typical 10 kW system. The 30% federal residential solar tax credit was eliminated by Congress in July 2025 and no longer applies to 2026 installations. Virginia homeowners still benefit from full retail net metering (mandated through 2035 by the Virginia Clean Economy Act), property tax exemptions across most localities, and among the strongest solar mandates in the South, with payback periods of approximately 9–12 years.
⚠️ Federal Tax Credit Update (Important for 2026)
The 30% federal residential solar tax credit (Section 25D) was terminated by the One Big Beautiful Bill Act, signed into law on July 4, 2025. It no longer applies to solar systems installed on or after January 1, 2026. Homeowners who installed solar in 2025 can still claim the credit on their 2025 tax returns via IRS Form 5695.
For 2026 installations:
– Homeowner-purchased systems: No federal income tax credit available.
– Solar leases and PPAs: The installer retains the commercial Investment Tax Credit (Section 48E), which may translate to lower lease rates. This is not a tax credit you receive.
– Battery storage: The federal residential battery credit was also eliminated. Virginia’s state-level exemptions still apply (see below).
Virginia Solar at a Glance
| Metric | Virginia Data |
|---|---|
| Average cost per watt | $2.93/W |
| Typical 10 kW system (installed cost) | $29,300 |
| State sales tax on solar | Exempt (5.3% exemption saves ~$1,553 on a 10 kW system) |
| Property tax exemption | Available in most localities (see below) |
| Net cost after sales tax exemption | ~$27,747 |
| Average electricity rate — Virginia (2025) | $0.139/kWh |
| Average peak sun hours — Richmond/NoVA | 4.7 PSH |
| Peak sun hours — Virginia Beach / Tidewater | 5.0 PSH |
| Net metering | Full retail rate (VCEA-mandated through 2035) |
| Federal ITC for 2026 installations | Not available (Section 25D terminated) |
Cost data: EnergySage Virginia Market Report (May 2026). Rate: EIA residential average for Virginia (2025).
Cost by System Size in Virginia
Most Virginia homes with $100–$200 monthly electricity bills need a 7–12 kW system. These are current installed costs at the state average of $2.93/W. No federal tax credit applies to 2026 installations.
| System Size | Installed Cost | After Sales Tax Exemption | Annual Savings (Richmond)† |
|---|---|---|---|
| 6 kW | $17,580 | $16,647 | $1,444 |
| 8 kW | $23,440 | $22,196 | $1,925 |
| 10 kW | $29,300 | $27,747 | $2,406 |
| 12 kW | $35,160 | $33,297 | $2,888 |
†Annual savings: system kW × 4.7 PSH × 365 days × 0.80 efficiency × $0.139/kWh. Sales tax savings: 5.3% state sales tax exemption on equipment.
Virginia Solar Incentives in 2026
The federal ITC is gone, but Virginia has meaningful state-level protections that reduce upfront costs and improve long-term economics.
Virginia Sales Tax Exemption
Virginia exempts solar energy equipment from the 5.3% state sales tax. On a $29,300 system, that’s approximately $1,553 saved at purchase — no application required. The exemption covers panels, inverters, batteries, racking hardware, and installation labor related to electrical work.
Local Property Tax Exemption
Under Virginia Code § 58.1-3661, solar energy equipment is exempt from local real property taxation for systems up to 25 kW (residential scale). Most Virginia localities — including Fairfax County, Loudoun County, Arlington, Alexandria, Richmond, Virginia Beach, and Chesterfield County — honor this exemption automatically. The added home value from solar (typically $15,000–$25,000) will not increase your property tax bill.
Dominion Energy Net Metering (Full Retail)
Dominion Energy Virginia offers full retail net metering on all residential solar installations up to 20 kW. Excess generation credits roll over month to month and are settled annually at the retail rate. The Virginia Clean Economy Act (VCEA) requires Dominion to maintain full retail net metering until at least December 31, 2035.
Appalachian Power (AEP Virginia): Residential customers in western Virginia also receive full retail net metering under the same VCEA mandate.
SCC Rider for Dominion SmartSolar Participants
Dominion’s SmartSolar program (community solar) is a separate option and does not replace rooftop solar incentives. If you are a homeowner installing your own system, rooftop solar with net metering is almost always the better economic choice.
Average Payback Period by Virginia City
Payback varies significantly by location due to differences in electricity rates, sun hours, and local incentives.
| City / Region | Utility | Avg Rate (2025) | Peak Sun Hours | 10 kW System Cost (After Sales Tax) | Est. Annual Savings | Payback Period |
|---|---|---|---|---|---|---|
| Northern Virginia (Fairfax/Loudoun) | Dominion | $0.152/kWh | 4.5 PSH | $27,747 | $2,231 | ~12.4 years |
| Richmond | Dominion | $0.139/kWh | 4.7 PSH | $27,747 | $2,406 | ~11.5 years |
| Hampton Roads / Virginia Beach | Dominion | $0.139/kWh | 5.0 PSH | $27,747 | $2,560 | ~10.8 years |
| Charlottesville | Dominion | $0.139/kWh | 4.8 PSH | $27,747 | $2,458 | ~11.3 years |
| Roanoke / Western Virginia | AEP Virginia | $0.131/kWh | 4.9 PSH | $27,747 | $2,372 | ~11.7 years |
Note: Payback periods do not account for annual utility rate increases of 2–4%, which would shorten payback in practice.
Is Solar Worth It in Virginia in 2026?
Verdict: Yes, for most homeowners in the coastal and central regions — with caveats for Northern Virginia due to higher system costs and lower sun hours.
Virginia’s electricity rates are near the national average, its net metering policy is among the best in the South, and the sales and property tax exemptions reduce upfront costs meaningfully. The loss of the federal ITC has lengthened payback periods by roughly 3–4 years compared to 2025, but a 10–12 year payback on a 25-year system still represents a strong return.
Solar makes the most sense in Virginia if:
– You have a south- or southwest-facing roof with minimal shading
– You are in the Hampton Roads, Richmond, or Charlottesville areas (best sun exposure)
– Your monthly electricity bill exceeds $120
– You plan to stay in the home for at least 10 years
– You own your home (renters cannot access net metering)
Solar is less compelling in Virginia if:
– You are in Northern Virginia with a heavily shaded lot
– Your electricity bill is below $80/month
– You are planning to move within 5–7 years
– You have a north-facing roof
What Affects Solar Cost in Virginia
Roof complexity: Steep or multi-plane roofs require more labor. Simple gable or hip roofs keep costs near the $2.93/W average.
Panel brand and efficiency: Premium panels (REC, SunPower Maxeon, Panasonic EverVolt) cost more upfront but produce more per square foot — relevant for homeowners with limited roof space.
Installer: Labor rates in Northern Virginia are ~10–15% higher than in Richmond, Roanoke, or Tidewater due to higher regional wages. Get at least three quotes.
Battery storage: Adding a home battery (Tesla Powerwall 3 at ~$10,000–$12,000 installed, or Enphase IQ Battery 5P at ~$8,500–$11,000) increases total system cost but provides backup power. With the federal battery credit eliminated, batteries are now entirely out-of-pocket for homeowners.
HOA restrictions: While HOAs in Virginia cannot prohibit solar outright under the Virginia Property Owners’ Association Act (§ 55.1-1820), they may regulate placement and aesthetics.
Top Solar Companies in Virginia
| Installer | Service Area | Key Strength |
|---|---|---|
| Sunrun | Northern VA, Richmond, Hampton Roads | Large installer, lease/PPA options |
| Palmetto Solar | Statewide | Strong customer service, app-based monitoring |
| SunPower (Maxeon dealer network) | Statewide via local dealers | High-efficiency panels, 25-yr warranty |
| Solar Energy World | Northern VA, Richmond | Mid-Atlantic regional specialist |
| PosiGen | Richmond, Hampton Roads | Income-qualified programs, lease-focused |
| Green Earth Energy | Hampton Roads, Richmond | Local Virginia company |
Always get at least 3 quotes. Use EnergySage or the SolarMetric quote tool to compare local installers side by side.
Compare Virginia Solar Installers → Get Free Quotes
How to Get the Best Price on Solar in Virginia
- Get multiple quotes. Prices vary by 20–30% between installers on identical systems. Always compare at least 3.
- Ask about sales tax documentation. Your installer should provide a Virginia Form ST-11 (resale/exemption certificate) to ensure you don’t pay sales tax on equipment.
- Confirm net metering enrollment. Dominion and AEP automatically enroll customers in net metering when a system is interconnected, but confirm in writing.
- Check property tax exemption with your locality. Most Virginia localities apply it automatically, but a quick call to your commissioner of revenue confirms before you file.
- Size for your bill, not your roof. Oversizing beyond your annual consumption won’t increase return — Dominion settles excess annual credits at avoided-cost rates, not retail.
Virginia Solar FAQ
How much do solar panels save on electricity bills in Virginia?
A 10 kW system in Richmond or Hampton Roads typically offsets 80–95% of annual electricity usage, saving $2,000–$2,600 per year. Northern Virginia homes with lower sun hours may see $1,800–$2,300 per year in savings.
Is there still a federal solar tax credit for Virginia homeowners in 2026?
No. The 30% federal residential solar tax credit (Section 25D) was eliminated by the One Big Beautiful Bill Act, signed July 4, 2025. It does not apply to systems installed in 2026. Virginia’s state-level exemptions — sales tax and property tax — are still available.
Does Virginia have a solar rebate program?
Not a direct cash rebate at the state level. The primary financial incentives are the sales tax exemption, local property tax exemptions, and Dominion Energy’s full retail net metering. Some utilities run periodic small-scale incentive programs; check with your utility directly.
Can my HOA prevent me from installing solar in Virginia?
No. Under Virginia Property Owners’ Association Act § 55.1-1820, HOAs cannot prohibit solar outright. They may require approval for placement, color, and aesthetics, but cannot deny installation entirely.
What is the best solar company in Virginia?
There is no single best installer for all homeowners. The right choice depends on your location, roof type, financing preference, and customer service priorities. We recommend comparing at least 3 quotes from national installers (Sunrun, Palmetto) and local companies like Solar Energy World. See our full Virginia installer comparison →
Sources
- EnergySage Virginia Solar Market Report, May 2026
- U.S. Energy Information Administration (EIA) — Residential Electricity Rates by State, 2025
- NREL National Solar Radiation Database (NSRDB) — Virginia peak sun hour averages
- Virginia State Corporation Commission — Net Metering Rules and VCEA Compliance
- Virginia Department of Taxation — Sales Tax Exemption, Code of Virginia § 58.1-609.3(17)
- Virginia Code § 58.1-3661 — Solar Energy Equipment Property Tax Exemption
- IRS — Inflation Reduction Act changes and Section 25D termination per OBBBA (July 2025)
Get Free Solar Quotes in Virginia →
See also: Solar Panel Cost Guide | Is Solar Worth It? | Federal Solar Tax Credit