How Net Metering Works in Virginia
January 31, 2024
Solar power in Virginia has seen a significant increase in recent years, but it still only comprises 2% of the state’s total energy draw. Not content to sit in ninth place in solar capacity in the nation, the state has an ambitious plan to expand solar installations to meet a 100% renewable pledge by 2045 – five years before many other states’ net-zero targets.
Virginia sweetens home solar installations with a variety of solar incentives beyond the nationwide Federal Investment Tax Credit (ITC), which allows taxpayers to deduct 30% of the cost of installing a solar energy system from their federal taxes. Virginia’s Residential Property Tax Exemption for Solar, free solar panels for income-eligible homes1, and a robust Solar Renewable Energy Credit (SREC) program that sells credits to Pennsylvania also incentivize solar installations.
The bottom line to taking the first step into solar energy for homeowners is often the upfront installation costs. Luckily, Virginia has excellent net metering standards that allow for a speedier return on your renewable investment. Read on to learn about solar incentives in Virginia, including their net metering program and how to join.
What is Net Metering?
At just over 200 sunny days per year, Virginia has abundant solar resources to support the energy needs of your home and then some.
If your solar photovoltaic (PV) panels are installed in an unshaded roof area, you can see a return of 1,500 kWh per year for each kilowatt of solar panel capacity. This is more than enough to meet the energy needs of the average home and can lead to a surplus. Through a system known as net metering, this surplus solar power can be fed back into the local electrical grid, earning you credits that offset your utility bill.
Essentially, the net metering process looks like this:
- The electricity utility measures your surplus solar generation using a revenue grade meter that supports bidirectional monitoring.
- Credits from surplus solar energy are subtracted from your monthly electricity bill.
- For months where solar generation is higher than your consumption, the difference is rolled over to the following month.
Does Virginia Allow Net Metering for Home Solar?
Yes, Virginia offers net metering that is available on a first-come basis until the generating capacity from solar customers reaches 1% of the electric distribution provider’s adjusted Virginia peak load forecast for the previous year.
Sound confusing? Essentially, all residents who own their solar system are eligible to join an investor-owned utility or electric cooperative net meter program as long their system size is less than 25 kW. This excludes customers of municipal utilities.
Virginia’s residential customers are also compensated well at a one-to-one retail rate for the solar energy that is returned to the grid.
Generally, systems in Virginia need to be sized for household needs; however, the ‘avoided cost rate’ can help offset this. When a home generates more solar energy over the course of a 12-month period than is needed, the homeowner can roll over the credit or simply receive a payment at the avoided cost rate.2
The main electrical utilities that offer net metering programs in Virginia are Dominion Virginia Power and AEP Appalachian Power.
Will Solar Panels Save You Money in VA?
Investing in solar panels will save you money in Virginia regardless of whether you join a net meter program or not. Benefits include increased home values, backup power for Virginia’s regular storms, and lower impact from fluctuating energy prices from the municipal grid.
What kind of savings can you see from net metering alone? If your solar panels are placed advantageously to garner the most sunlight exposure, you can generate around 1,500 kWh for each kilowatt of photovoltaic capacity in Virginia. With the average household energy needs supporting a 6-kW home solar system, you would generate around 9,000 kWh per year.
With Virginia’s average electricity price coming in at 12.40 cents/kWh,3, a homeowner could save up to $1,116 per year on their electric bill!
Going Solar & Using Net Metering in Virginia
For Dominion Energy and AEP Appalachian Power, the steps to join a net metering program are similar.4
Apply on the Electrical Utility’s Site
A Net Metering Application must be submitted for generating equipment systems with a capacity of 25 kW or less for residential. You’ll need to submit the net metering application form on Dominion Energy or AEP Appalachian Power’s website.
Pre-Approval From the Electric Utility
A Net Metering Interconnection Notification (NMIN) form will be required with the application. Sections 1 through 4 of the NMIN should be submitted for pre-approval before installation. After the installation is complete, the fully completed NMIN should then be resubmitted for final field approval.
Submit an Interconnection Application
In most cases in Colorado, the developer or installer will submit the interconnection application on your behalf and manage the details of your project directly with the electricity utility. The homeowner can also manage this part of the process independently. Once your application is approved, you can proceed with your solar installation.
System is Scheduled for Exchange
Upon a successful final field approval, your meter will be scheduled for exchange. This process can take up to 30 days for residential and 60 days for commercial customers. During this time, the hometown will have to leave the generator off until it is approved and the meter has been exchanged.
Your system must have a visible disconnect switch or a UL 1741 and IEEE1547 standard solar inverter that is capable of disconnecting from the grid during a power outage.
In Virginia, you must have a bidirectional power meter or Interval Data Recorder (IDR) meter installed by the local electricity utility. These devices record the amount of electricity consumed and the amount of electricity generated by your home or business.
Proof of Insurance
You must provide general liability insurance.
Final Electrical Inspection
After your solar energy system is fully installed, you can submit a copy of the final electrical inspection signed by the local inspection authority. The electric utility will then review the inspection document and send you written authorization to energize your solar system, and you are ready to participate in net metering.