Smart Virginia homeowners know that going solar is a great deal. It’s beneficial for home value, helps move us toward cleaner air, and pays for itself. Your investment in renewable energy at home unlocks net energy metering, and here we’ll talk about why Virginia law allows it, how it works, and how long you can count on it being around. If you’re planning a solar project soon, be sure your project is unlocking net metering in Virginia.
Virginia’s net metering laws and rules
Virginia utilities like Dominion Power and Appalachian Power serve large numbers of customers and are owned by investors. Each is the only option for electric service in the territories that it covers, and other entities like electric cooperatives and municipalities provide service outside those areas. Dominion and APCo customers may install solar at their property and interconnect it to the grid, with the help of an experienced and licensed contractor like Ipsun Solar.
Of course, the customer benefits from remaining connected to the grid for energy from their provider whenever it’s night or it’s cloudy. But it’s also helpful in reverse. If the solar system is producing a lot of energy when the home or building is not using much, then the surplus can flow out through the meter over lines to serve neighbors. These meters installed at solar locations are upgraded with a bidirectional feature, to account for credit on the customer’s bill in compensation for extra solar they’ve exported. As long as the grid is up, net metering works when you need it.
How much credit does the utility provide for net metered solar? It’s the same exact value that energy would cost at retail rate. In APCo, it’s about 16 cents per kilowatt hour, and in Dominion it fluctuates between about 11 and 13 cents as the residential rates vary.
This one-to-one relationship is as good as it gets for the solar customer because each watt-hour sent out takes an equal amount off of the usage charges on their bill.
That’s how net metering basically works. The solar installer takes care of all utility interconnection paperwork in order to get the system approved to run on time. Net metering has some rules in Virginia. First, the largest system size permitted to interconnect with net metering is 25 kW, which has been expanded over recent years for reasons like electric vehicle charging, and taking advantage of homes built with large unobstructed rooftops to allow solar system sizes in this range.
Another rule is what we call the annual “zero-out”. The way this rule works is that starting from the date a solar system begins service, known as its permission to operate or PTO date, a one-year clock starts. During this first year solar credits can roll over month-to-month but at the end of this first year, any credit must no longer remain on the account, and could vanish, sometimes a little and sometimes a lot. This tends to only impact customers with solar arrays sized for about 100% offset (or more, which is sometimes allowed). If the customer’s zero-out date is based on a mid to late spring PTO, it will fall then every year, so that they risk losing saved up spring credits going into the summer air conditioning season. If this policy has impacted you, Dominion’s net metering desk may be able to provide you a one-time date change to end your annual rollover at a more favorable time to reduce lost credit (but keep in mind this is a case by case basis and not something your installer can change.)
Electric cooperatives may have somewhat different net metering options and rates to discuss with your solar energy consultant as you consider solar, and will need to adjust their total limits for solar capacity added to their system in the coming years as they near applicable caps.
To sum up, Virginia’s utilities’ solar net metering has been set at full credit for years, and combined with reductions in panel cost and a growing amount of installer know-how has led to strong increases in solar built across the state particularly in Dominion’s service areas, as this graph of cumulative solar in Northern Virginia shows.
But for how long?
Virginia net metered solar is currently worth full retail credit to the customer. But if you’ve read Ipsun Solar’s blog before there may be a bell ringing in your head, that many states that used to provide full value metering for solar now credit the customer a lot less.
These examples show a trend across the country where utilities, unsatisfied with their net metering deals, or policy makers, convinced that solar installations cause non-solar customers to pay more, have changed the metering rules to provide less credit.
The new crediting amount often originates from a bit of math that utilities do to determine the cost to them that the solar customer helps avoid. To our way of thinking, that’s a limited methodology, leaving out how solar reduces the need for costly new power generation facilities and grid congestion. (Virginia tried to estimate the value of solar here ten years ago but during the preliminary framework process the utilities discontinued their participation and the study committee couldn’t specify the value of solar as intended.)
The point is, any cut to net metering credit unfortunately takes a large part of the incentive to go solar away in the Virginia market.
How would things look different? We only need to look to California for a clue: There would still be solar projects built, however, they would be designed to avoid exporting solar, potentially using energy storage or fewer panels. Like in the early days of solar technology adoption, new solar projects might again comprise mostly ”true believers” in clean energy rather than average homeowners because they would be somewhat less affordable, with full value net metering out of the picture.
Believe us, we know that DMV area residents see enough hype on a daily basis and we wish we didn’t need to add to that. But the practical fact is that on May 1, 2025 we’re going to see Dominion’s proposal submitted before the State Corporation Commission pertaining to net metering changes.
The good news is that a process will follow where existing solar customers and potential solar customers can comment on the proposal and be heard. Those in favor and against full value net metering will have a chance to give input before new rules are finalized, and if net metering battles across the country are any indication, the more voices engage in this process the better for solar. Solar advocates point out that there’s likely to be “grandfathering,” where existing solar customers can continue full credit net metering but it should not be understood as permanent. (Solar for low income projects will also have the option to use the old rules for full NEM credit.)
Appalachian Power’s proposal along these lines actually came out two months ago, and is floating an approach where credit used in the same hour it was exported is worth full value but outside that hour is only worth ¼ of that, and existing customers can enjoy an extension of the old rules for 25 years.
Unlock net metering for your solar through 2025
Virginia solar installations can continue unlocking max value through full credit net metering in 2024 and 2025. But to conclude this discussion, no one guarantees that level credit past next year, so to homeowners who were waiting, better get going.
Frankly, this is our call to encourage all readers to check in with family, friends and neighbors you know about getting a solar quote now, to grab attractive net metering before it could be gone. Thanks to all of our 2024 new customers for helping us keep a brisk pace going into an uncertain period, and hopefully serve hundreds more and lock-in savings, before any net metering changes strike in Virginia.
