How Net Metering Works in Virginia

According to the Office of Energy Efficiency and Renewable Energy, the sunlight that shines on the Earth in an hour and a half could power the entire planet for a full year. Utility customers in Virginia are harnessing this energy to reduce their electric bills and improve sustainability through a process called net metering. 

If you’re considering adding a solar panel array to your home, you’ll want to understand how this billing process works and the benefits you can expect from net metering. 

Understanding Solar Energy and Net Metering

Solar panels offer a sustainable solution to your energy needs. Here’s a detailed look at the science behind solar panels and how they connect to your Virginia utility company to offer savings with net metering: 

What is Solar Energy?

Solar panels capture energy from the sun and convert it into usable electricity. When panels are exposed to photons, photovoltaic cells in these panels absorb electromagnetic radiation and transform it into direct current (DC) power. Then, an inverter converts DC power into alternating current (AC) energy, which your home uses to run appliances, lights, and other devices. 

What is Net Metering?

If your rooftop receives ample sunlight during the day, there’s a good chance your solar panels will collect more energy than you can use. Net metering ensures this power doesn’t go to waste. With this billing arrangement, excess electricity is sent back to the grid. In turn, your utility company credits your account for the surplus energy you generate, offsetting future electricity use. 

Basic net metering programs are geared toward homeowners, but renters and commercial entities can also take advantage of these billing practices. Virtual net metering allows renters in Virginia to receive energy credits for off-site community solar facilities, while aggregate net metering provides reimbursements for farmers and other agricultural businesses. 

How Solar Panels and Net Metering Work Together

States like Virginia that incorporate net metering programs into their utility systems help ensure that solar setups remain efficient even when homes produce more power than they consume. Without net metering, you could lose excess energy created during ideal conditions. These systems maximize personal efficiency and minimize overall strain on the grid. 

Net Metering Laws and Regulations in Virginia

In 2023, Virginia was among the top ten solar energy producers in the US, thanks in part to the state’s adoption of net metering protocols. 

Virginia’s Net Metering Eligibility Requirements

According to Virginia law, homeowners participating in the state’s net metering program must meet specific requirements for eligibility, including owning or operating a residential solar energy system no larger than 25 kW. This system must be interconnected with an electric cooperative or investor-owned utility company’s electrical grid and include a bidirectional meter to measure energy consumption and production. 

The Solar Energy Credit Process

Solar panel setups generate various amounts of electricity throughout the day and the year. They are weather-dependent, so your system will likely produce more energy when the weather is warm and the sun is shining. In turn, many homes use more electricity from the grid during cold, overcast winter months. To simplify the billing process, credits for surplus energy (measured in kilowatt-hours, or kWh) roll over from month to month, so you can enjoy the perks throughout the year. 

As of 2024, utility companies in the Commonwealth offer monthly credit rates equaling the full value of a customer’s contribution to the electrical grid. Annual credit rates equal the rate of avoided costs through solar energy production. Under these net metering protocols, the average residential solar panel system in Virginia pays for itself within 9 to 15 years of activation. However, this may not be the case in 2025 and beyond. 

Many hailed the 2020 Virginia Clean Economy Act as a victory for renewable energy, but it put the fate of net metering into the hands of traditional utility companies. In May 2024, the State Corporation Commission (SCC) issued an order requiring Virginia’s two leading electric companies, Appalachian Power Company (APCo) and Dominion Energy, to submit proposals regarding the future of net metering reimbursements. 

Utility companies hope to lower the rates at which they repurchase energy from customers. Instead of the current 1:1 ratio, they would reduce buy-back rates while maintaining existing fees for grid-sourced electricity. APCo has requested a 70% reduction in net metering reimbursements. Dominion Energy must respond to the SCC filing by May 2025. 

Virginia Net Metering Caps

Individual limitations on net metering customers in Virginia require solar panel installations to remain within 150% of anticipated energy needs based on previous utility usage. 

On a larger scale, utility companies in Virginia set a cap on the amount of energy that can come from net metering. This figure is around 6% of the previous year’s peak usage for both electric cooperatives and investor-owned utility companies. 

Benefits of Net Metering for Virginia Homeowners

Although the future may hold changes for net metering customers in Virginia, there are still plenty of benefits to look forward to. 

Savings on Electricity Bills

In 2024, the retail rate for electricity in Virginia sits around $0.11 per kWh, meaning that current net metering customers receive this amount in return for each kWh they send to the grid. Depending on the size of your solar array, this figure could deliver a substantial return on your investment. 

Despite potential changes, existing customers should continue receiving full retail reimbursement for up to 25 years. 

Environmental Benefits

Installing a solar panel array can reduce your personal carbon footprint and lower Virginia’s overall reliance on fossil fuels. As you generate renewable solar energy, you alleviate the strain placed on the electrical grid, particularly during peak hours. 

Energy Independence and Resilience

Virginia utility customers hoping to minimize their reliance on the grid can enjoy more control over their energy needs by adopting net metering along with their solar panels. This may be especially important during periods of high demand. 

Is Net Metering Right for You?

Net metering is an excellent way for Virginia residents to make the most of their solar arrays and put their rooftops to work. Here are a few considerations to keep in mind: 

Evaluate Your Home’s Solar Potential

Every house is different, and some are better suited to accommodate a rooftop solar array than others. Your home’s orientation, shading, and climate can determine its ability to generate ample solar energy. 

However, structures with older roofs may require reinforcement or replacement before they can hold the weight of a comprehensive solar panel system, and roofs with an extreme slope may not offer enough support.

Weighing the Costs and Benefits

Your solar panel array is a financial investment. While you’ll need to pay the applicable upfront costs, your system should pay for itself over time through energy generation as well as state and federal tax incentives and rebates. These systems can help you save 20% to 100% on monthly energy bills and may even increase the value of your home. 

Consulting a Solar Energy Provider

A qualified solar energy provider can help you maximize your savings potential under Virginia’s net metering program by assessing your solar site and energy needs. These experts can offer personalized estimates and guide you through your options to choose the best panels for your home. Professional solar installation also ensures that your system meets state and local requirements. 

Make Use of Virginia’s Net Metering Program

Utility customers in Virginia can enjoy a host of benefits through the Commonwealth’s net metering policies, including reduced energy bills and increased sustainability. And while you might consider waiting to see what the future has in store for this program, you’ll want to act fast to ensure your stake in the full retail rates currently offered by utility companies. Remember, existing net metering customer-generators will continue to reap the rewards for decades to come despite the proposed changes. 
If you’re ready to embrace alternative energy solutions, Solar Energy World is here to help. Contact us today for a free solar estimate!unted system, Solar Energy World is here to help! Contact us today for a free solar estimate!fficient and environmentally friendly, setting a strong foundation for the years ahead.