A BILL to amend the Code of Virginia by adding in Chapter 19 of Title 45.2 an article numbered 4, consisting of sections numbered 45.2-1918 through 45.2-1922, and by adding in Article 13 of Chapter 3 of Title 58.1 a section numbered 58.1-439.12:13, relating to Department of Energy; Virginia Solar Energy and Battery Energy Storage Systems Program and tax credit; solar energy and battery energy storage projects.
HB1133 would create a new Virginia Solar Energy and Battery Energy Storage Systems Program within the Department of Energy to evaluate and approve certain solar and short-duration battery storage projects for a new state income tax credit. The bill defines three categories of eligible projects: residential, commercial and industrial, and utility-scale. To qualify, projects generally must be newly constructed or placed in service on or after July 1, 2026, meet specified federal Inflation Reduction Act-related criteria, and satisfy minimum storage-duration requirements. The Department of Energy would also be responsible for determining eligible project costs, issuing approval certificates, monitoring credit allocation, and publishing quarterly transparency reports and a public dashboard showing regional and demographic uptake.
The bill adds a refundable, installment-based tax credit for taxable years beginning on or after January 1, 2027, and before January 1, 2032. The credit equals 35 percent of eligible project costs, capped at $6,000 for residential projects, $2.5 million for commercial and industrial projects, and $5 million for utility-scale projects. Credits are earned when a project is placed in service and claimed over five years, with unused amounts refundable, subject to rules that terminate remaining installments if the equipment is sold, removed from service, or moved out of Virginia. The total annual credit allocation would be capped at $50 million per budget cycle, with set-asides and reallocation rules, and the Tax Commissioner would issue implementation guidelines.
In terms of state law, HB1133 would add new sections to Title 45.2 and Title 58.1 of the Code of Virginia, creating both an administrative approval program and a new tax expenditure. It would expand the Department of Energy’s role in certifying projects and would require coordination with the Tax Commissioner on credit administration. The bill also specifies detailed eligible-cost categories for residential, commercial, and utility-scale projects, while excluding a range of unrelated expenses such as general property improvements, speculative land banking, fossil-fuel backup systems, and certain leased residential systems.
The general sentiment reflected in the available legislative history appears cautious rather than strongly supportive or opposed: the bill was continued to the next session in the House Finance Committee by voice vote, and there are no recorded floor votes or committee transcripts provided. That suggests the proposal received enough interest to remain alive, but not enough consensus for immediate advancement. The structure of the bill indicates an effort to promote solar and battery storage deployment while also imposing oversight, cost controls, and reporting requirements.
The main points of contention likely involve the size and design of the tax credit, the $50 million annual cap, and the extent of state involvement in project approval and allocation. Potential concerns may also center on whether the credit is sufficiently targeted, whether the refundable installment structure creates fiscal exposure, and how the Department of Energy will determine eligible costs and prioritize projects. The bill’s requirement that commercial and utility-scale applicants consider participation in a virtual power plant pilot program, and its emphasis on ratepayer cost reduction, may also draw debate from utilities, developers, and fiscal conservatives over program design and public benefit.
HB1133 would amend Virginia law by creating a new Department of Energy-administered solar and battery storage program in Title 45.2 and a new refundable individual and business income tax credit in Title 58.1. It would establish eligibility standards, approval procedures, reporting obligations, and a statewide cap on credits, while directing the Tax Commissioner and Department of Energy to implement the program through guidelines and certification processes. The bill would affect residential solar customers, commercial and industrial developers, utility-scale energy storage projects, and the state agencies responsible for energy policy and tax administration.
The available legislative record suggests a mixed but not overtly polarized reception. The bill was continued to the next session in the House Finance Committee by voice vote, which indicates it did not advance immediately but also did not face a recorded defeat. With no transcripts or roll-call votes provided, the overall tone appears to be one of interest in the policy concept paired with unresolved questions about cost, administration, and program design.
Likely areas of contention include the fiscal impact of a refundable tax credit, the $50 million annual cap, and whether the credit should be available for both residential and large-scale commercial projects. Stakeholders may also disagree over the Department of Energy’s authority to approve projects and define eligible costs, the requirement that commercial and utility-scale applicants opt into or align with a virtual power plant pilot, and the bill’s restrictions on what counts as a qualifying expense. Utilities, solar developers, taxpayers, and budget-focused lawmakers are the most likely groups to hold differing views.