Top Takeaways
1-to-1 Net Metering
Excess NEM credits on your Anniversary Date may carry over, be forfeited, or an annual cash out can be requested
Systems sized over 15 kW AC in Dominion VA are subject to Standby/Demand Charges
1-to-1 Net Metering
Virginia legislation requires utilities to provide 1-to-1 net metering. Net metering is when the utility subtracts or "nets" excess production with consumption at the same price per kilowatt-hour ($/kWh) they charge, called the retail rate.
Each kilowatt-hour (kWh) the solar system produces will first power your home. Any excess solar energy sent to the utility grid will receive a kWh credit on your electric bill. Production and consumption (delivered and received) will offset each other 1-to-1. Any excess kWh credits will rollover month to month until you need them in a 'NEM bank,' or until your 12-month Net Metering Period.
Sample NEM Bills
Dominion Energy Virginia
Dominion Energy Virginia
Appalachian Power
Appalachian Power
Remaining Utility Bill
Even if solar provides 100% of your electricity needs, you will still have a utility bill to recover fixed customer charges and taxes that all consumers contribute to operate the grid (~$8 per month). In addition, you will have a separate LightReach bill for the solar system production.
12-month Net Metering Period
Excess NEM credits rollover month to month until your consumption exceeds your production, or until your 12-month Net Metering Period. This may also be called an Anniversary Date. In Virginia, your Anniversary Date is the date "beginning with the first meter reading date following the date of final interconnection from your utility." This is likely the date the utility granted Permission to Operate the solar system or close to it.
If you have any accumulated excess credits at the end of your Net Metering Period, -- not everyone will-- a few different things could happen based on Virginia's net metering policy.
Option 1 - Carry Over to next year
Accumulated NEM credits may be carried forward into the next 12-month Net Metering Period to the extent that the banked NEM credits carrying forward do not exceed the total billed kWh consumption from the utility for the current 12-month period...Best Scenario
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This means if your system produces more annual kWh than your home uses, you can carry forward NEM credits to the next 12-month period.
For example, the system produces 10,000 kWh in the year and you consumed 12,000 kWh. Net 2,000 kWh will be purchased from the utility. Depending on your Anniversary Date, you may have excess credits that will be able to rollover to the next 12-month cycle.
Carrying forward to the next NEM year is preferred as it avoids a kWh purchase at the retail utility rate (over 14 cents/kWh).
Tariff excerpt:
Option 2 - Overgeneration Forfeited
If your billed kWh consumption from the utility for the current NEM period is less than your accumulated excess credits, then you risk losing those credits at the Anniversary Date.
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For example, your system produces 10,000 kWh in the year and you only consumed 9,000 kWh. Then, -1,000 kWh credits are at risk of being forfeited.
Option 3 - Cash Out
If you sign a Power Purchase Agreement with the utility, the utility is mandated to pay you for those excess credits at a low wholesale rate (~3-4 cents per kWh).
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Signing a Power Purchase Agreement with the utility is not recommended unless your system is oversized for the foreseeable future.
You can request a PPA from your utility Dominion Virginia or Appalachian Power. Be sure to request a 'PPA without a REC purchase' as Palmetto LightReach already owns the RECs as outlined in your LightReach agreement.
Learn more in the Net Metering Guides created by Dominion Virginia and Appalachian Power.
FAQs
Can the Anniversary Date be changed?
Can the Anniversary Date be changed?
Changing the date should not be necessary in VA if your system is does not produce more than your annual consumption. If it's not over generating, excess NEM credits can carry forward to the next 12-month NEM period.
Appalachian Power does not currently allow a date change.
Dominion Energy Virginia does allow the Anniversary Date to be changed. Contact Dominion to request it. Typically, February is the best month if you want to see most of your NEM credits utilized in the same year. Often any banked NEM credits will be consumed in the winter months when production is lower leading to March being a good start month.
Should I sign the utility's 'PPA with REC purchase?'
Should I sign the utility's 'PPA with REC purchase?'
Palmetto LightReach does not recommend rushing into requesting the utility's PPA. Wait at least 11-12 months to see if your system over generates for the year. Only request a PPA with your utility if your system is oversized to produce more than you consume annually for the foreseeable future. Otherwise, the utility will carry the excess credits into the next NEM period.
If you continually over produce each month, signing a PPA will ensure that you will not lose any excess generation you have built up at the end of your net metering period. However, they will be credited at a low avoided cost rate (~3-4 cents/kWh). If you're in Dominion, be sure to change your Anniversary Date first to a month like February when you have less excess credits.
If you have a smaller system producing less than your annual kWh usage, and you expect to use most, if not all, of the renewable energy you generate throughout the year, signing a PPA with the utility is NOT recommended. Utilizing kWh in the NEM bank avoids purchasing a kWh at the utility's retail rate (~over 13 cents/kWh)
How do Time of Use rates work with NEM?
How do Time of Use rates work with NEM?
Virginia's net metering policy requires banking to be tracked separately per TOU period. Excess On-Peak credits net only with future On-Peak consumption. Excess Off-Peak credits can only offset future Off-Peak consumption.
Time of Use (TOU) rates are generally not recommended with NEM in Virginia for most solar customers. More than likely, you will end up with excess On-Peak credits at the end of the 12-month NEM period while being billed monthly for Off-Peak consumption.
Standby Charges for Systems Over 15 kW
Dominion Energy Virginia allows residential systems to be sized as large as 25 kW AC. However, systems over 15 kW AC are subject to Standby Charges also known as Demand Charges. Demand Charges can get costly, therefore, Palmetto LightReach does not recommend installing a system over 15 kW AC in Dominion VA.
The Standby/Demand Charge applies in Dominion VA only.
What's a demand charge?
What's a demand charge?
A demand charge is based on the peak amount of energy you use from the utility grid at any given moment in the month. The Demand/Standby Charge is not calculated based on your solar system production just whether or not you are subject to a demand fee at all.
Your electric bill is always based on total kWh (kilowatt hours) used throughout the month measured as $ per kWh. With a demand charge, a fee will be added based on the highest aggregate electric usage at one point in time measured as $ per kW (kilowatt).
For example, if you had your air conditioner, lights, EV charging, hot tub, and more on all at once, even if just for 30 minutes, that could become your peak usage measurement for the whole month. With a demand rate, you do not want to 'tower your power' instead spread out your consumption throughout the day and night.
Your utility will track your demand usage over each day of the month and multiply your highest peak demand, on any single day, by the demand charge ($/kW). Typical demand usage in a residential home with gas heating in Virginia is 2-3 kW in the winter and 3-6 kW in the summer. Unfortunately, Dominion's demand charge is not just limited to on-peak hours. If you charge an EV overnight, that usage could become your peak demand measurement along with everything else running at the same time.
The Standby Charge in Dominion's Schedule 1 as of November 2025 is $6.34/kW in total comprised of:
$3.42/kW for Distribution
$1.32/kW for Transmission
$1.60/kW for Rider T1
Energy kWh = Power (kW) * Time
For example, if your peak usage is 4 kWh for 30 minutes during 1 day in the month, then your power is 4 kW. The total charge for 4 kW would be $6.34/kW * 4 kW = $25.36.
NEM credits do not apply to Standby/Demand Charges.