SolarReviews | Virginia Solar Power Rebates and Incentives

Solar Power Rebates, Tax Credits and Solar Panel Incentives in Virginia; 2012 Update

Tennessee Valley Authority (TVA) and participating power distributors of TVA power offer a production-based incentive program to homeowners and businesses for the installation of solar power systems. TVA will purchase 100% of the output from a qualifying PV system at a premium of $0.12 per kilowatt-hour (kWh) on top of the retail electricity price. Given the average retail price of electricity in Virginia is 9 cents then this means that you will get paid 21 cents for your power you feed back into the grid. TVA will retain all rights to any renewable energy credits (including tradable renewable credits or green tags) or other associated benefits of energy generated from the renewable nature of the system. Payment is made in the form of a credit issued by the local power company on the monthly power bill for the home or business where the generation system is located. If a qualifying system produces more electricity than the customer consumes, payment for any excess credits will be issued either monthly or annually, at the discretion of the power company. All new participants in the Generation Partners program will receive a $1,000 incentive to offset the upfront cost. The contract term is 10 years. Qualifying systems must have a minimum output of 500 watts and a maximum output of 50 kilowatts (kW)

Up front Incentive

Under the same TVA Generation Partners Program you also get a rebate of $1,000 off the upfront cost of a system.

30% Federal Tax credit

The 30% federal tax credit is available until 2016 for installations of solar power systems in Virginia So given the above what do the economics of purchasing solar panels for your home in Virginia look like:

Size of System (kw)  

5

Space required (square feet)

650

     
Price of system per watt  

$3.50

Price of power (marginal cost high usage kwh's) $ per kwh  

0.09

Average daily kwh produced per 1 kw of solar  

3.3

Total average daily production  

16.5

Total Price (before incentives)  

$17,500.00

Federal Tax Credit  

$5,250.00

State Tax Credit    
Utility Rebate under the TVA Generation Partners program  

1000

     
Actual out of pocket cost after incentives claimed  

$11,250.00

     
Annual Power production  

6022.5

Total Annual Energy savings based on net metering at 1:1  

542.025

Value of TVA production incentive (assuming 50% of power exported to the grid)  

632.3625

Total Annual Return  

1174.3875

Annual Return on Investment  

10%

Payback Time assuming 7% annual increase in power prices   8 years

  Given that money in the bank is only paying 2-3% at the moment then a 10% return on something seems pretty good. Especially when you consider that it will add value to your house. This extra house value is not included in the calculation above and so in reality the return would be much better than 10%.

Mid -Sized Generation Incentive program in Virginia

There is also a small incentive for larger generators above the 50 kw cap that is on the Generation Partners Program. However, the level of incentive is only quite small, around 5 cents per kwh in 2012 on average and the TVA takes the benefit of any environmental credits or SREC's that the system may become entitled too.    


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