Virginia Solar Panels 2023: Pricing & Savings (Full Guide)
By: HomeOtter Team
Mar 30th 2023
Virginia solar panels have been making headlines recently and it's not just because they make great conversation starters at dinner parties. Solar panels in Virginia are becoming increasingly popular because of the benefits they offer to homeowners.
Conventional energy sources in Virginia are becoming carbon intense with every passing day and that too with skyrocketing costs. So as homeowners, you are not going to have it easy from here onwards. Electricity bills are likely to make a bigger dent in your wallet each year. So you know what they say; when the going gets tough – invest in a solar panel. But what about the cost impact?
To answer this million-dollar question, we've compiled a guide that will simplify the whole cost scenario of solar panel installation. Also, it will highlight and discuss the things you should look for when picking a solar system installer.
By the end of this 9-minute read, you’ll not only have a good grasp of associated solar panel costs but you’ll also know the solar financing options available in Virginia and the potential savings you can see on your energy bill.
How Much Do Solar Panels Cost In Virginia?
When you decide to invest your money in an asset, it is obvious you will get down to every nitty-gritty detail about it and solar panel investment is no different. Read below to have all the scoop on the costs of solar panels in Virginia.
1. Average Cost of Solar Panels in Virginia
The cost of installing solar panels in Virginia can vary depending on several factors. However, on average, a solar panel in Virginia will cost you $3.10/watt. This means that a 5kW solar panel system would cost around $15,500 before incentives and rebates.
2. Factors Affecting Solar Panel Cost In Virginia
Let’s now take a look at factors that impact solar panel pricing.
2.1 Size Of The Solar Panel System
Size does matter. Not only when we talk about Godzilla vs Kong but solar panels also. The bigger the size of the solar panel system, the costlier the installation will be. A larger system will have more solar panels that will require even more equipment. Thus driving up the overall costs.
Additionally, you should carefully evaluate your energy needs and available space to determine the appropriate size of the solar panel system.
2.2 Type Of Solar Equipment Used
The type of solar equipment used will impact the cost of installing solar panels. Like all other things, there is a variety of solar panels, inverters, and mounting systems in the market by various manufacturers. And obviously, each will come with its own price point.
Premium-quality equipment will cost you big bucks – but only initially. In the long run, they’ll give you better returns on your investment. How? Two things – amplified performance and longevity. You need to work with reputable solar installation companies that use high-quality equipment to ensure a reliable and efficient solar panel system.
2.3 Labor Costs
Installation complexity and the location of your house will be the deciding factor for the labor costs. It may bring the costs up or down. Virginian residents will have to pay around $0.60 per watt on average as labor costs for their home solar panel installation.
So if we calculate the whole thing, a typical 5-kilowatt solar panel system installation’s labor cost would be around $3,000. It's important to budget for labor costs when evaluating the overall cost of solar panel installation.
2.4 Federal & State Incentives
A sigh of relief for Virginia residents here. Renewable energy systems are at the top of the priority list for both the federal government and the state of Virginia. And that’s the very reason they are offering all sorts of incentives to Virginians, such as tax credits, rebates, and performance-based incentives.
These incentives play a pivotal role in helping to equilibrate the initial cost of installing solar panels. Hence making it more approachable to the masses. Additionally, Virginia offers a clean energy tax credit that can help to further reduce the cost of installation.
2.5 Maintenance Costs
While solar panels require minimal maintenance, they may need occasional cleaning or repairs. On average, solar panel system maintenance will cost around $150 annually. This includes the cost of occasional cleaning and inspections to ensure the system is operating at peak efficiency.
You should factor in these ongoing maintenance costs when evaluating the overall cost of solar panel installation to ensure that you are fully prepared for the investment.
3. Virginia Solar Incentives & Rebates
Virginia’s focus on solar panel growth has made it rank 9th among the states in terms of solar installation growth in 2023. All thanks to the incentives and rebates offered by the government, the total installed solar capacity is 4286 MW which is projected to reach 5757 MW over the next 5 years.
Let’s take a look at these incentives that have marked such tremendous growth in the solar industry of Virginia.
3.1 Federal Tax Credits
Installing solar panels in Virginia not only helps reduce your energy bills but can also help you qualify for various incentives and rebates. One of the most significant incentives for solar panel installation is the federal solar Investment Tax Credit (ITC). This federal solar tax credit allows homeowners to deduct 30% of the total cost of their solar panel system from their federal taxes. This is applicable for solar panels installed between 2022-2032.
To qualify for the federal solar ITC, the solar panel system must be installed and operational by the end of the tax year.
3.2 State Tax Credits
In addition to the federal solar ITC, Virginia offers its own solar incentives and rebate program. The Virginia Residential Clean Energy Credit provides a 30% state tax credit on the total cost of the solar panel system with a capacity of at least three kWh. To qualify for this credit, the solar panel system must be installed by a Virginia contractor and meet eligibility requirements.
3.3 Local Utility Company Incentives
Some local utility companies in Virginia also offer incentives for solar panel installation. For example, Dominion Energy offers its Solar for Students Program, which provides grants to schools and nonprofits for the installation of solar panel systems. These programs can provide additional financial incentives for homeowners and businesses to install solar panels in Virginia.
3.4 Net Metering
The two of the most prominent utility companies, Dominion Energy and Appalachian Power working in Virginia offer a net metering program. The residential and commercial customers of these companies can avail of this program as it allows their customers to receive a credit on their utility bills for the excess energy generated by their solar panel system.
The net metering program in Virginia has a few key regulations that customers need to be aware of. One of these is the maximum system size allowed for net metering is 25 kilowatts. Therefore, it's important to size your solar panel system appropriately and to use the credits before they expire.
Remember that the rates for net metering credits vary with every other company. The best way to go about here is to do your math well. For example, Dominion Energy offers net metering credits at the retail rate, meaning that customers will receive a credit equal to the cost they would have paid for the electricity they generated. On the other hand, Appalachian Power offers net metering credits at a slightly lower rate than the retail rate.
To get the maximum benefits from the incentives and tax credits, it is important to find the right solar panel installation company. That's why we're here to make your life easier. At HomeOtter, we match you with the best solar panel installation companies in Virginia that are experts in navigating these incentives and tax credits so you can reap the maximum benefits.
We don't partner with just any solar company in Virginia. We have a rigorous vetting process to ensure that only the best in the business make it to our panel of elite solar installers. And that's not all. We have an online solar report that's completely free. Yes, you heard that right. In just under 4 minutes, you'll have all the information you need to get your solar panel expedition going.
Now that we are familiar with solar panel costs in Virginia, let’s discuss if the savings from them are worth the effort.
Solar Panel Savings - Is It Worth Getting Solar Panels In Virginia?
Virginia is blessed with abundant sun exposure. If you are looking to save on your energy costs and reduce your carbon footprint, you couldn’t be at a more geographically ideal location. On top of that, the government has made solar paneling even more irresistible by throwing in some major incentive programs. These two factors make investing in a solar panel more worthwhile.
A. Monthly Savings On Electricity Bills In Virginia
Big savings on the monthly electricity bill is an incentive in itself to get solar panels installed in Virginia. If we talk in figures, the average monthly electricity bill in an average household in Virginia touches $124 - 15.89% higher than the national average.
Obviously, this is the average amount of the monthly electric bill we stated. The exact amount will vary from one household to another and will depend on several factors. Generally, this is what you should expect if you live in Virginia – an average saving of $140 per month on electricity bills on a 5-kilowatt solar energy system.
B. Long-Term Savings On Energy Costs In Virginia
In addition to monthly savings, installing solar panels in Virginia can provide significant long-term savings on energy costs. Here’s the big reveal. Just tell us, would you mind saving hefty tens of thousands of dollars on energy costs? That's how much a Virginia resident would put in their piggy bank in the lifespan of a solar energy system.
Homeowners in Virginia can save an average of $42,000 over 25 years by installing a 5-kilowatt solar energy system.
C. Average Payback Period For Virginia Solar Panel Systems
The average payback period for a 5-kilowatt solar energy system in Virginia is 11 years. This means that homeowners can expect to recoup their initial investment within 11 years of installing the solar panels. After this point, homeowners can enjoy significant long-term savings on energy costs.
Additionally, solar panels can increase the value of your home. A solar panel-installed house gets a boost of 4% on its average selling price as compared to the ones without solar energy systems. This means that homeowners can potentially recoup a portion of their initial investment when selling their homes.
Now that we know how much you can save by installing solar panels, let’s take a look at some of the options for getting one.
What Are The Solar Financing Options In Virginia?
With Virginia receiving an average of 4.13 peak sunlight hours per day, having a solar panel system installed is a no-brainer. However, financing solar panels can be a significant investment and it's essential to understand the available options before making a decision.
I. Solar Panel Loans In Virginia
Loans are a popular financing option for solar panel installations in Virginia. The average loan period offered in Virginia varies depending on the lender and loan type. Generally, solar panel loans have a loan period of 5 to 20 years. The stretch of the loan term is directly proportional to the monthly payment amount and the total interest paid over the life of the loan.
The interest rate for solar panel loans in Virginia can range from around 3% to 10%. The borrower's credit score, loan amount, and loan term will play a crucial role in deciding the interest rate.
The maximum loan amount for solar panel loans in Virginia also varies depending on the lender and loan type. At some lending companies, you may be able to bag loans up to $100,000, while at other companies, you may not be able to get a higher quote than $50,000.
Calculate interest rates and loan amount, total period, and all other important details from multiple lenders. When you have first-hand information at hand, comparing and deciding on the best party will become crystal clear and you will have more authority over your decision.
II. Solar Panel Leases In Virginia
The lease term for solar panels in Virginia can range from 10 to 25 years. During the lease term, the solar company owns the solar panel system and you pay a fixed monthly payment for the use of the system.
The monthly lease payment is typically based on the size of the solar panel system and the expected energy production. The monthly payment is usually fixed for the lease term and does not fluctuate based on energy usage or utility rates.
The interest rate for solar panel leases in Virginia can vary depending on the solar company and lease terms. Some Virginia solar panel companies offer leases with low or no upfront costs but higher monthly payments, while others may require an upfront payment with lower monthly payments.
Note that solar panel leases typically have a higher overall cost than purchasing a solar panel system outright or with a loan. However, they can be a good option for customers who do not have the upfront capital to purchase a system or who prefer to have the solar company handle the maintenance and repairs.
III. Solar Power Purchase Agreements
Since we are on the topic of solar panel loans in Virginia, here is another hot piece of information that will come in quite handy. PPA is a contract between the solar company and the homeowner or business owner. According to this, the solar company installs and maintains solar panels on the property and sells the energy produced to the customer at a fixed rate.
The terms of a PPA in Virginia can vary depending on the solar company and the specific agreement. The homeowner is charged a fixed rate per kWh for the electricity produced by the solar panel system. The rate is usually lower than the utility's retail electricity rate. The PPA term typically ranges from 10 to 25 years, depending on the solar company and the agreement terms.
Unlike solar panel loans, the solar company owns and maintains the solar panel system under a PPA. This means that maintenance and repairs become the least of your worries. The solar company takes the headache of all the dirty work since they are responsible for any malfunctioning that may occur in the system.
Virginia Solar Panel Loans Vs. Leases Vs. PPAs - Which Is The Best For You?
One of the biggest advantages of solar panel loans is that homeowners own the system and can benefit from the energy savings and potential increases in home value. However, loans require upfront capital or collateral and the homeowner is responsible for maintenance and repairs.
Solar panel leases require little or no upfront capital and the solar company is responsible for maintenance and repairs. However, leases typically have higher overall costs and the homeowner does not own the system or benefit from potential increases in home value.
PPAs require no upfront capital, and the solar company does all the maintenance and repairs. However, like a lease, the homeowner does not own it nor can benefit from potential property appraisals.
When comparing these 3 financing options, Virginia homeowners should consider their budget, energy usage, and maintenance preferences.
Loans may be the best option for homeowners who can afford upfront capital and want to own the system, while leases and PPAs may be better for homeowners who want to save money on their monthly utility bills without the upfront costs or maintenance responsibilities.
Ultimately, choosing the right financing option for your solar panel system depends on your individual needs and preferences. By comparing offers from multiple solar companies and reading contract terms carefully, you can make an informed decision about which financing option is best for you.
Virginia, the birthplace of America, is not just known for its rich history, but also for its ample sunshine. With solar panel prices dropping by 53% in the last 10 years, it's the perfect time to tap into this natural resource and make the switch to solar energy.
We cannot emphasize more on the importance of your research when it comes to purchasing and installing solar panels. This will lead you to work with a reputable and reliable installer. Make sure to get multiple quotes.
While it all may sound a little too much but don't let this process hold you back from making the switch to solar energy. We at HomeOtter can save you from the hassle and frustration of searching for the right installer. We do all the hard work for you, scrutinizing every solar panel company in Virginia to connect you only with the best out there.
Still not clear about your direction? Worry not, as our free online solar report is the perfect starting point. All you have to do is answer a few simple questions and leave the rest to us. Order your free online solar report today.