The latest Dominion Energy rate increase will raise long-term electricity costs for Virginia homeowners: the SCC-approved increase adds $11.24 a month to the average residential bill starting in 2026, with another $2.36 a month in 2027.
This Dominion Energy rate increase, the utility’s first base rate change since 1992, is prompting more Virginia homeowners to look at solar, since panels let you generate your own electricity instead of buying all of it from the grid. As utility rates rise, the electricity a home’s solar system produces generally becomes more valuable relative to what it would otherwise cost to buy.
This guide explains why Dominion Energy rates are increasing, what the increase means for your bill, and how to think about solar in that context, without promising a specific savings number, since that depends on your usage, roof, and financing.
Why Are Dominion Energy Rates Increasing?
Several factors are driving Dominion Energy’s current rate increases:
- A base rate increase, the first since 1992. The State Corporation Commission (SCC) approved Dominion Energy’s request for a base rate increase, something the company hadn’t raised since 1992. Prior bill increases in recent years came mostly through separate riders (line items tied to specific projects).
- Infrastructure and grid modernization. Investment in generation, transmission, and distribution infrastructure to maintain reliability.
- Rising fuel and operating costs, including labor, materials, and equipment like transformers and utility poles.
- Regulatory approval through the SCC’s rate case process, which reviews and adjusts what Dominion Energy is permitted to charge.
- Growing electricity demand, including data center load growth. Data centers have requested roughly 70 gigawatts of new interconnection capacity in Dominion Energy’s territory, nearly three times the grid’s all-time peak demand, according to Dominion’s own filings with the State Corporation Commission.
| 2026–2027 Base Rate Increase | Amount |
| 2026 increase (average residential bill) | +$11.24/month |
| 2027 increase (average residential bill) | +$2.36/month |
| First base rate increase since | 1992 |
How Dominion Energy Rate Increases Affect Virginia Homeowners
For most homeowners, this shows up as:
- Higher monthly electric bills, on top of any separate fuel-rate or rider changes, which are billed and adjusted on their own schedule
- Long-term household budgeting pressure, since these are ongoing rate changes
- Seasonal spikes during high-usage months (winter heating, summer cooling) that compound with the rate increase
- A larger dollar impact for high-energy-use households, since rate increases generally scale with how much electricity you use
Are data centers the main reason my residential bill is going up?
Data center growth is a well-documented factor in Virginia’s rising electricity demand, but it’s not the only driver. Fuel costs, infrastructure investment, and the first base rate change since 1992 also contribute, which is why homeowners considering EV charger installation services should also consider how future electricity demand and utility rates may affect their household energy costs.
In response to data center-driven demand specifically, the Virginia SCC approved a new rate class (GS-5) for large-load customers over 25 megawatts, mostly data centers, requiring 14-year contracts and monthly minimum charges covering at least 85% of their contracted transmission and distribution demand (plus 60% of generation demand), effective January 1, 2027, so those costs can’t be shifted onto other ratepayers if a data center ends up using less power than it reserved (source: Virginia SCC, ‘SCC Data Center Initiatives’ fact sheet and its final order in Dominion’s 2025 biennial review, Case No. PUR-2025-00058).
Why Rising Electricity Rates Make Solar More Valuable
- Solar offsets electricity you would otherwise purchase from the grid. Every kilowatt-hour your system produces and you use, or credit through net metering, is a kilowatt-hour you’re not buying at Dominion Energy’s current rate. For homeowners comparing solar companies in Virginia, this can be an important part of understanding how solar can reduce reliance on utility-purchased electricity.
- As utility rates rise, each unit of self-generated electricity effectively becomes more valuable, since it’s displacing a more expensive purchase than it was before the increase.
- Solar reduces reliance on utility-generated electricity. You remain connected to the grid, and most systems are sized to offset a meaningful share of usage.
Savings depend on several variables that are different for every home: your electricity usage, your system size, how you finance it, current and future utility rates, and how your system performs once installed. Anyone giving you a single guaranteed savings number without asking about these factors first isn’t giving you a complete picture.
Can Higher Utility Rates Shorten Solar Payback?
Rising electricity costs can improve the return on investment for residential solar panels Virginia homeowners, since each avoided kilowatt-hour becomes more valuable as utility rates increase. That said, the payback period varies significantly by household and depends on your system cost, energy usage and offset, financing structure, and how electricity rates change over the life of your system, so there isn’t one fixed number that applies to every Virginia homeowner.
Can Solar Protect Homeowners From Future Rate Increases?
- Long-term cost stability. Your solar system’s cost is largely fixed once installed, while utility rates can continue to change through future rate cases.
- Reduced exposure to future rate increases. You’re still connected to the grid and subject to net metering terms, so this is a hedge.
- Battery storage adds resilience, particularly for backup power during an outage, though it’s a separate consideration from rate protection specifically, see our Battery Storage guide.
- Accurate system design matters. A system sized to your usage is what determines how much of this protection you get.
Is Solar Still Worth It in Virginia?
Between rising Dominion Energy rates, Virginia’s Net Metering program, financing options, and long-term ownership economics, many Virginia homeowners still find solar economically worthwhile, but this depends on your specific situation.
One important, plain fact: the federal residential solar tax credit (Section 25D, 30%) expired for systems placed in service after December 31, 2025, under the One Big Beautiful Bill Act. No new residential federal credit is available for 2026 installations. Homeowners should evaluate solar based on overall economics, usage, rates, financing, and incentives that remain in place. For the fuller treatment of this question, see Is Solar Worth It in Virginia?
Convert Solar has been designing systems around this exact question for Virginia homeowners for 14 years, with 8,500+ Virginia installations and an in-house team of NABCEP-certified installers who size every system from a homeowner’s usage, the accurate sizing that determines whether “is it worth it” holds up for a specific home.
Understanding Virginia Net Metering
Net Metering lets homeowners with solar earn a credit for excess electricity their system sends back to the grid, generally at the full retail rate which is what makes solar more valuable as electricity rates climb, since each credited kilowatt-hour is worth more over time.
Is Dominion Energy changing net metering rules in Virginia?
The Virginia SCC issued its final ruling on April 30, 2026, rejecting Dominion Energy’s proposed net metering cuts. The 1:1 retail-rate credit and customer ownership of SRECs remain in place, with only a small administrative fee ($1/month) added for new net-metering customers.
Future filings are always possible, so it’s worth confirming current terms with Dominion Energy or the SCC before installing, but as of this ruling, net metering in Virginia remains intact on favorable terms.
Did Dominion Energy raise their rates for Virginia?
Yes, but it’s worth separating two different things that are easy to conflate: the base rate increase ($11.24/month in 2026, $2.36/month in 2027) is a separate SCC proceeding from the net metering ruling described above, which rejected the cuts Dominion Energy had proposed. Rates went up; net metering terms did not get worse.
Should You Consider Solar Before Electricity Rates Rise Again?
If you’re weighing whether now is the right time, a few things are worth thinking through:
- Home suitability — roof orientation, shading, and structural condition
- Roof condition and age — an aging roof is generally worth addressing before, not after, a solar installation
- Your household’s electricity usage — the basis for sizing a system correctly
- Your long-term plans for the home — how long you expect to own it factors into the economics
A no-obligation solar assessment, based on your usage and roof, is the most accurate way to see what these numbers look like for your specific home.
Rising electricity rates are outside any individual homeowner’s control, but how you respond to them isn’t. If you want to see what Dominion Energy’s rate increases mean for your specific home, request a no-obligation solar assessment from Convert Solar based on your usage and roof.
FAQs
Why are Dominion Energy bills increasing?
A combination of factors: the first base rate increase since 1992, rising fuel and infrastructure costs, regulatory approval through the SCC’s rate case process, and growing electricity demand, including data center load growth in Dominion Energy’s territory.
How much are Dominion Energy rates going up?
The SCC-approved base rate increase adds $11.24/month to the average residential bill starting in 2026, and an additional $2.36/month in 2027. Approved rates can be updated in future proceedings, so confirm current figures with Dominion Energy directly.
Can solar protect me from future rate hikes?
Solar can reduce your exposure to future utility rate increases by letting you generate some of your own electricity, though you remain connected to the grid and subject to net metering terms, it’s a hedge.
What is net metering in Virginia?
Net metering credits homeowners for excess solar electricity sent back to the grid, generally at the full retail rate, lowering the effective cost of the electricity you draw from the grid at other times.
Is Dominion Energy changing net metering rules in Virginia?
The Virginia SCC’s April 30, 2026 ruling rejected Dominion Energy’s proposed net metering cuts, preserving the 1:1 credit rate and customer ownership of SRECs, with a small new administrative fee for new customers. Confirm current terms before installing, since future filings are possible.
Are data centers the main reason my residential bill is going up?
Data center growth is a significant, well-documented factor; data centers have requested roughly 70 gigawatts of new interconnection capacity in Dominion Energy’s territory, per Dominion’s own SCC filings, but it’s one of several factors alongside infrastructure costs, fuel costs, and the base rate increase itself.
Does Virginia allow solar power purchase agreements (PPAs)?
Virginia has a legal pathway for third-party PPAs, but it’s structured as a pilot program limited to systems between 50 kW and 3 MW, commercial and institutional scale. This is different from the small residential PPAs offered in some other states.
What tax incentives are available for Virginia solar buyers?
The federal 30% tax credit expired for systems placed in service after December 31, 2025. Virginia-specific mechanisms that remain in place include Net Metering, the state property and sales tax exemptions on solar equipment, and SREC income, see our Virginia solar savings guide for details.
What can I do if I cannot afford my electricity bill?
Dominion Energy’s EnergyShare program offers year-round bill payment assistance plus free weatherization for qualifying customers. The federal LIHEAP program and Virginia’s PIPP (Percentage of Income Payment Program) are also available, contact Dominion Energy or dial 211 for a referral.
Do solar panels increase home value in Virginia?
Many buyers view solar as a value-add, and Virginia’s property tax exemption means any added value doesn’t raise your tax bill, but we don’t have a Virginia-specific, independently verified percentage to cite here, so we’d rather not give you an unsupported number.
