Exemption for Certified Solar Energy

Background

The Virginia General Assembly enacted legislation declaring certified solar energy equipment, facilities, or devices and certified recycling equipment, facilities or devices to be a separate class of property as defined under the Code of Virginia Section 58.1-3661. Chapter 868 of the Loudoun County Codified Ordinances governs the exemption for Certified Solar Energy Equipment.

The Code of Virginia Sections 58.1-3661, 58.1-2606.1 and Chapter 868 of the Loudoun County Codified Ordinances were updated effective January 1, 2023, to make the exemption for solar energy equipment of five megawatts or less the same amount and duration as the exemption for solar energy equipment equaling greater than five megawatts. See the chart below for the amount and duration of the exemption based on the interconnection date.

The Department of Building and Development must certify the application before it is submitted to the Office of the Commissioner of the Revenue Exemptions and Deferrals Division.

The exemption is effective the tax year following the year the application is made. The amount and duration of the exemption are based on the megawatts of the equipment and interconnection date. Solar energy equipment of five megawatts or less that are connected between January 1, 2019, and December 31, 2022, receive an exemption equal to the value of the solar energy equipment and the exemption will be for ten years. Solar energy equipment of five megawatts or less that are connected on or after January 1, 2023, receive a graduated exemption as follows: 80 percent of the assessed value of the solar energy equipment for the first five years, 70 percent for the second five years and 60 percent for the remaining years in service. Solar energy equipment equaling greater than five megawatts and less than 150 megawatts that filed an interconnection request on or after January 1, 2019, receive a graduated exemption as follows: 80 percent of the assessed value of the solar energy equipment for the first five years, 70 percent for the second five years and 60 percent for the remaining years in service.

To receive an exemption, complete the Solar Energy Exemption application and provide the supporting documentation requested to the Department of Building and Development. See the Solar Permits webpage for more information about the permit process.

The application and assistance are available during business hours at the Leesburg office located at the Loudoun County Government Center, 1 Harrison St. SE. If you need assistance, please email the Exemptions and Deferrals Division or call 703-737-8557.

Change in Circumstances after Exemption

Property owners are required to notify the Office of the Commissioner of the Revenue if the solar energy equipment is no longer in service. Property owners may be required to provide supporting documentation the system is still in service, if requested.

Requirements

Certified solar energy equipment, facilities or devices means property certified by the Department of Building and Development to be designed and used primarily for the purpose of collecting, generating, transferring, or storing thermal or electric energy.