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Solar Power

Solar power is a method of harnessing the sun's energy to generate electricity or for heating purposes. There are a variety of technologies that have been developed to take advantage of solar energy. Different types of solar power include:

  • Photovoltaic (solar cell) systems: Convert sunlight directly into electricity
  • Concentrating solar systems: Use reflective materials to utilize the sun's heat to produce electricity
  • Passive solar heating and daylighting: Use solar energy to heat and light buildings
  • Solar hot water: Heat water with solar energy
  • Solar process heat and space heating and cooling: Industrial uses of the sun's heat

For information on the Solar Regulatory Advisory Panel (RAP) and other regulatory information, visit DEQ's Solar Energy page.

Financial Incentives for Solar Power

Corporate Tax Credit for Solar Water Heat, Solar Space Heat, Solar Thermal Electric, Solar Thermal Process Heat, and Photovoltaics
Potential Applicants: Commercial, Industrial, and Utilities

Tax credit on federal income tax equal to 30% of expenditures, with no maximum credit limit stated. Eligible solar energy property includes equipment that uses solar energy to generate electricity, to heat or cool (or provide hot water for use in) a structure, or to provide solar process heat. (Passive solar systems and solar pool-heating systems are not eligible.) Hybrid solar lighting systems are those that use solar energy to illuminate the inside of a structure using fiber-optic distributed sunlight.  

Residential Tax Credit for Solar Water Heating or Photovoltaic Systems
Potential Applicants: Homeowners who place qualified systems on a residence from January 1, 2006 to December 31, 2016

Tax credit on federal income tax for 30% of qualified expenditures on photovoltaic systems placed in service after December 31, 2008 with no maximum (maximum of $2000 for systems placed in service between January 1, 2006 and December 31, 2008). Photovoltaic systems must provide electricity for the residence.

Tax credit on federal income tax for 30% of qualified expenditures of solar water heating systems with a maximum of $2,000 in any tax year. Solar hot water systems must provide at least half of the energy used by the system to heat the water and the equipment must be certified for performance by the Solar Rating Certification Corporation (SRCC). This tax credit is not available for expenses related to swimming pools and hot tubs.


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Virginia Department of
Environmental Quality
P.O. Box 1105
Richmond, VA 23218
(804) 698-4000

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