Looking to go solar in Virginia? With the right incentives and smart planning, you can save thousands on the cost of installing solar panels on your Virginia home. This comprehensive guide provides insider tips to maximize savings and make solar affordable. Read on to learn the best ways to cut costs on your solar panel system.
How Much Can You Save by Going Solar in Virginia?
Virginians stand to save a substantial amount on energy bills by utilizing solar power. Here are some key statistics:
The average cost to install solar panels in Virginia is $2.50 per watt, considerably below the national average of $2.77 per watt. Lower equipment costs mean greater upfront savings.
Current incentives like the federal tax credit can reduce solar installation costs by up to 30%. This credit alone saves the average 6 kW system around $5,000.
Virginia‘s net metering policy lets homeowners receive bill credits at the full retail electricity rate for excess power sent to the grid. This further maximizes savings.
Solar can reduce a Virginia home‘s electric bill by 50% or more. For the average home, that‘s around $1,100 in annual savings.
Over the lifetime of a solar system, Virginia homeowners can save $15,000 to $30,000 in electricity costs.
With smart planning and claiming available incentives, you can maximize returns on your solar investment. Keep reading to learn the best ways to save.
Calculate Your Potential Savings with Solar in Virginia
The first step to strategize your solar savings is calculating the right system size for your home. Follow this process:
Review electricity bills – Analyze your kWh usage over the past year. This shows your monthly and annual usage. Look for seasonal fluctuations and trends.
Estimate your system size – Use an online solar calculator to enter your location and average usage to get a recommended system size in kW.
For example, a Virginia home using 12,000 kWh/year may need a 5 kW solar panel system.
Understand sizing factors – Consider future electricity needs, especially if you plan on buying an EV or hot tub. Oversizing your system slightly prepares you for increased demand.
Optimize system design – Your installer will assess your roof and suggest optimizing system design for maximum sunlight exposure. Things like tilt, direction, and spacing impact energy production.
Once you‘ve calculated the right solar system size for your energy usage, you can estimate just how much you can save long-term.
Estimating Your Solar Savings
To determine potential savings, account for:
- Federal tax credit – 30% of total system cost
- Electricity bill savings – Reduce current bill by 50-100%
- Electricity rates – Project 3-6% annual increases over system lifetime
- Net metering – Offset future bills through excess energy credits
- Solar incentives – Other state/local incentives like VA property tax exemption
Online solar calculators use these factors to provide a detailed savings estimate for your property based on your electricity profile and chosen system size.
For a 5 kW system costing $12,500 before incentives, a Virginia homeowner could save:
- $3,750 from federal tax credit
- $1,350/year from utility bill reduction
- $8,000 over 20 years from rising energy rates
- $10,000 over 20 years from net metering credits
Total 25-year savings = $23,750
Track your energy use monthly before installing solar. This gives the most accurate savings estimate.
How Federal and State Incentives Save You Money
Virginia offers a suite of incentives that directly reduce the cost of going solar:
Federal Solar Tax Credit
The federal investment tax credit (ITC) remains the biggest incentive, providing a 26% tax credit for systems installed in 2022 and 2023. This will fall to 22% in 2024 before expiring. The credit applies to all system costs, including:
- Solar panels and racking
- Inverters and electrical components
- Labor costs for installation
- Permits and inspection fees
- Sales taxes
There is no cap on the amount you can claim. To qualify, you must own the system rather than lease it.
The average 6 kW solar system costs around $16,000 in Virginia after all incentives. With the ITC, you immediately save around $4,160 on your taxes – reducing the out-of-pocket cost by 26%.
Virginia Property Tax Exemption
Virginia offers a 100% property tax exemption on the added value solar panels give your home.
To qualify, you must own the solar system outright. This saves homeowners around 4% annually on the increased assessed value, which can add up to over $3,000 in savings over 20 years.
This exemption lasts for 25 years and is renewable. Contact your local assessor‘s office to claim the exemption.
Net Metering in Virginia
Virginia has mandatory statewide net metering, requiring utilities to provide bill credits for excess solar energy fed into the grid. This provides additional savings over time.
The credit rate equals the full retail electricity rate, which is often around 12¢/kWh. Compare this to buying grid electricity at 12¢/kWh and selling at 2¢/kWh in states lacking net metering.
This policy ensures you maximize the value of solar energy you produce. Excess credits roll over month-to-month indefinitely. You can choose to receive a check as an added incentive.
Renewable Energy Certificates
For each MWh of renewable energy you generate, you earn a solar renewable energy certificate (SREC). Virginia utilities must purchase SRECs to comply with state renewable portfolio standards.
Sell your SRECs on the open market for added income. Revenue from SRECs ranges widely, from $40 – $400 per certificate. Use this extra annual income to pay down solar loans faster.
Utilizing both federal and state incentives maximizes savings and shortens your solar payback period.
Estimate Your Upfront Solar Costs
While incentives help offset the total price, what‘s the initial investment to budget for solar in Virginia?
Here are the main costs to account for:
- Solar panels – $1.25-$1.75 per watt
- Inverters – $0.25-$0.35 per watt
- Racking and mounts – Up to $0.50 per watt
- Electrical system upgrades – $1,000-$5,000
- Meters and monitoring – $500-$2,500
- Battery storage (optional) – $8,000-$16,000
- Installation labor – Up to $1,000 per kW
- Permits and inspection – $200-$500
- System design – Up to $1,000
A 6 kW solar system runs around $15,000-$18,000 before incentives in Virginia.
Get quotes from 3-4 local installers to understand all-in costs. Ask about additional fees and financing options to minimize your out-of-pocket expense.
How Long Does it Take to Pay Off Your Solar System?
The payback period refers to the time it takes your energy savings to completely offset the cost of solar panel installation and earn you net profit.
Let‘s use the example 6 kW system from earlier costing $18,000 pre-incentive:
- Federal tax credit saves $4,680
- Yearly energy bill savings of $1,350
With $13,320 to recoup after incentives, the payback period is:
$13,320 system cost / $1,350 annual savings = 9-10 years
This doesn’t account for rising electricity rates, net metering credits, and SREC revenues that improve return on investment.
Payback periods in Virginia range from 6-12 years. The lower the upfront cost, the faster you earn a return from electricity savings. This makes financing options ideal if you don’t want to pay entirely upfront.
Financing: Make Solar Affordable Upfront
While you enjoy long-term savings, high upfront costs can limit solar adoption. Financing makes solar more affordable.
Here are 3 financing options to reduce your initial outlay:
Banks or credit unions offer solar-specific loans allowing 12+ years for repayment. This spreads costs over time rather than paying fully upfront.
With a $15,000 system, a 12-year 6% loan gives you monthly payments under $150. This consistent, predictable amount is easier to budget than a massive one-time fee.
Look for no prepayment penalties so you can pay the loan off early as savings accumulate. Home equity loans are another option, but note that they put your house at risk in the case of default.
With community or shared solar, multiple homeowners split the cost of an offsite solar installation. You pay a lower monthly fee for your portion of energy produced. This lets you go solar with zero upfront installation costs.
Virginia‘s shared solar program is still in development but expects to provide easy, affordable solar access to homeowners statewide.
Solar leases and power purchase agreements (PPAs) allow third parties to install and own the solar system on your property at little to no cost. But you don’t benefit from incentives and energy savings potential is lower.
While lease payments are often less than your utility bill, third-party ownership means you don’t own the system. Do your math to see if buying is better than leasing long-term.
Getting quotes with multiple financing options will help determine the best approach for your budget.
Go Solar for Under $10,000
Is it possible to install solar for less than $10,000 in Virginia? Yes, if you follow some key tips:
Size your system to cover 60-80% of your needs rather than 100%. Right-sizing saves money.
Shop end-of-year sales when solar companies offer discounts to clear inventory.
Buy materials directly when possible. DIY racking and electrical saves thousands.
Choose lower-cost equipment like thin film panels which run around 15% cheaper.
Seek local installer deals through energy efficiency programs or bulk community purchases.
Ask installers about refurbished or used equipment which can cut 20% off panel pricing.
Prioritize the federal tax credit and Virginia property tax exemption to lower net system cost. With the right combination of strategies, Virginia homeowners absolutely can go solar for under $10,000.
Maximize Solar Savings: Key Takeaways
Analyze your electricity usage and size your solar system accordingly. Oversize slightly to account for future energy needs.
Use online tools and get installer quotes to estimate your long-term savings based on system production, electricity rates, and incentives.
Take full advantage of federal tax credits before they decrease. Own your system to qualify.
Leverage Virginia‘s net metering policy and property tax exemption for extra savings over time.
Explore loans, shared solar, and third-party leasing to reduce hefty upfront costs associated with solar purchase.
With smart planning and low equipment pricing, installing solar for under $10,000 in Virginia is achievable.
Is now the time to harness the sun’s power and maximize savings? Reach out to Virginia solar providers for your free system quote today!