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Virginia Incentives and Laws

Listed below are the summaries of all current Virginia incentives, laws, regulations, funding opportunities, and other initiatives related to alternative fuels and vehicles, advanced technologies, or air quality. You can go directly to summaries of:

• State Incentives (11)
• Utility/Private Incentives (3)
• Laws and Regulations (18)

State Incentives

Biodiesel Production Tax Credit

Qualified biodiesel and green diesel producers are eligible for a tax credit of $0.01 per gallon of biodiesel or green diesel fuels produced. This credit is available for producers who generate up to two million gallons of biodiesel or green diesel fuel per year. The annual credit may not exceed $5,000, and producers are only eligible for the credit for the first three years of production. The Virginia Department of Mines, Minerals and Energy must certify qualified producers. (Reference Virginia Code 58.1-439.12:02)

Biofuels Production Grants

The Biofuels Production Incentive Grant Program provides grants to producers of advanced biofuels, specifically fuels derived from any cellulose, hemicellulose, or lignin from renewable biomass or algae. A qualified advanced biofuels producer is eligible for a grant of $0.125 for each gallon of neat (100%) advanced biofuel sold. A producer of non-advanced biofuels, including biodiesel, green diesel, and ethanol fuel, is eligible for a grant of $0.10 per gallon of neat biofuel sold in the commonwealth. To qualify, a producer must have begun selling neat biofuels on or after January 1, 2008, and must have produced at least one million gallons of neat biofuels before September 30, 2011. If a producer began selling neat biofuels before January 1, 2008, the producer is only eligible for a grant if its production of neat biofuels for the given calendar year exceeds its production in the 2007 calendar year by at least one million gallons and, in future years, continues to meet or exceed that amount. Each producer is only eligible for six calendar years of grants. This program expires June 30, 2017. (Reference Virginia Code 45.1-393 and 45.1-394)

Alternative Fuels Grants and Loans

The Alternative Fuels Revolving Fund is used to distribute loans and grants to municipal, county, and commonwealth government agencies to support alternative fuel vehicle (AFV) programs; pay for AFV maintenance, operation, evaluation, or testing; pay for vehicle conversions; or improve alternative fuel infrastructure. Eligible alternative fuels include electricity, hydrogen, and natural gas. Projects with a funding match are given priority in the evaluation process. (Reference Virginia Code 33.1-223.4 and 33.1-223.7)

High Occupancy Vehicle (HOV) Lane Exemption

Alternative fuel vehicles (AFVs) displaying the Virginia Clean Special Fuels license plate may use Virginia HOV lanes, regardless of the number of occupants. For HOV lanes serving the I-95/I-395 corridor, only registered vehicles displaying Clean Special Fuels license plates issued before July 1, 2006, are exempt from HOV lane requirements. For HOV lanes serving the I-66 corridor, only registered vehicles displaying Clean Special Fuels license plates issued before July 1, 2011, are exempt from HOV lane requirements. Eligible vehicles include dedicated AFVs and some hybrid electric vehicles; see the Virginia Department of Motor Vehicles website for a complete list of qualifying vehicles. The annual fee for Clean Special Fuels license plates is $25 in addition to the prescribed fee for commonwealth license plates. (Reference House Bill 85, 2012, and Virginia Code 33.1-46.2 and 46.2-749.3)

Alternative Fuel Job Creation Tax Credit

Businesses involved in alternative fuel vehicle (AFV) and component manufacturing, alternative fueling equipment component manufacturing, AFV conversions, and advanced biofuels production are eligible for a job creation tax credit of up to $700 per full-time employee. The credit is allowed in the taxable year in which the job is created and in each of the two succeeding years in which the job is continued. Qualified AFVs include vehicles that operate using natural gas, propane, hydrogen, electricity, or advanced biofuels. This credit is effective for taxable years through December 31, 2014. (Reference Virginia Code 58.1-439.1)

Green Jobs Tax Credit

Qualified employers are eligible for a $500 tax credit for each new green job created that offers a salary of at least $50,000, for up to 350 jobs per employer. The credit is allowed for the first five years that the job is continuously filled. For the purposes of this tax credit, a green job is defined as employment in industries relating to renewable or alternative energy, including hydrogen and fuel cell technology, landfill gas, and biofuels. The tax credit expires on January 1, 2015. (Reference Virginia Code 58.1-439.12:05)

Alternative Fuel Vehicle (AFV) and Fueling Infrastructure Loans

The Virginia Board of Education may use funding from the Literary Fund to provide loans to school boards that convert school buses to operate on alternative fuels or construct alternative fueling stations. (Reference Virginia Code 22.1-146)

Ethanol Production Equipment Tax Exemption

A county, city, or town may exempt, partially exempt, or set a lower tax rate for qualified equipment used by farmers or farm cooperatives to produce ethanol, provided that the ethanol feedstock consists primarily of farm products. (Reference Virginia Code 58.1-3505)

Biofuel Feedstock Registration Exemption

Individuals that transport waste kitchen grease for conversion to biofuel are exempt from Virginia Department of Health registration and the associated annual application fee of $100 per vehicle. This exemption only applies if the individual transports the waste kitchen grease in a container with a capacity of less than 275 gallons; and possesses no more than 1,320 gallons of waste kitchen grease, biofuel feedstock derived from kitchen grease, or biofuel at any one time, excluding biofuel contained in vehicle fuel tanks. Other restrictions apply. (Reference Virginia Code 3.2-5508 through 3.2-5516)

Alternative Fuel and Hybrid Electric Vehicle (HEV) Emissions Testing Exemption

The Virginia emissions inspection program, which requires biennial inspections of motor vehicles, does not apply to vehicles powered by compressed or liquefied natural gas, liquefied petroleum gas (propane), hydrogen, a combination of compressed natural gas and hydrogen, or electricity. Qualified HEVs with U.S. Environmental Protection Agency fuel economy ratings of at least 50 miles per gallon (city) are also exempt from the emissions inspection program unless remote sensing devices indicate the HEV may not meet current emissions standards. (Reference Virginia Code 46.2-1177 through 46.2-1178)

Idle Reduction Weight Exemption

Any motor vehicle equipped with an auxiliary power unit or other idle reduction technology may exceed the gross, single axle, tandem axle, or bridge formula weight limits by up to 400 pounds to compensate for the added weight of the idle reduction technology. (Reference Virginia Code 46.2-1129.1)

Utility/Private Incentives

Plug-In Electric Vehicle (PEV) Charging Rate Reduction - Virginia Dominion Power

Virginia Dominion Power offers two rates for residential customers who own qualified PEVs: the Electric Vehicle Pricing Plan and the Electric Vehicle + Home Pricing Plan. The Electric Vehicle Pricing plan allows PEV owners to take advantage of lower rates during off-peak hours. Under this plan, customers must install an additional meter specifically for their electric vehicle supply equipment (EVSE); Dominion will provide this meter at no charge. The Electric Vehicle + Home Pricing Plan is a whole-house pricing plan in which the customer's EVSE is treated as another appliance. Dominion will provide a new meter at no charge to record energy usage in 30-minute intervals, allowing Dominion to apply pricing based on time of day and encourage customers to charge their PEV during off-peak hours as hours much as possible. PEV pricing plans are expected to expire on November 30, 2014. For more information, see the Virginia Dominion Plug-In Electric Vehicles website.

Electric Vehicle Supply Equipment (EVSE) Incentive - Coulomb Technologies

Coulomb Technologies' ChargePoint America offers EVSE at no cost to individuals in the Washington, DC metropolitan area, including Northern Virginia. To be eligible for free home charging stations, individuals living within the specified area must purchase a qualified plug-in electric vehicle. Application information is available on the ChargePoint America website. In most cases, installation will be paid for by the EVSE owner; some cities, states, and utilities, however, will provide funding towards installation costs. All participants in the ChargePoint America program must agree to anonymous data collection after installation. Additional restrictions may apply.

Electric Vehicle Supply Equipment (EVSE) Incentive - ECOtality

Through the EV Project, ECOtality offers EVSE at no cost to individuals in the Washington, DC metropolitan area. To be eligible for free home charging stations, individuals living within the specified areas must purchase a qualified plug-in electric vehicle (PEV). Individuals purchasing an eligible PEV should apply at the dealership at the time of vehicle purchase. The EV Project incentive program will also cover most, if not all, of the costs of EVSE installation. All participants in the EV Project incentive program must agree to anonymous data collection after installation. Additional restrictions may apply.

Laws and Regulations

Aftermarket Electric Vehicle (EV) Conversion Regulations

Effective October 1, 2012, any motor vehicle, other than a motorcycle, that has been modified to replace the internal combustion engine with an electric propulsion system must be titled by and registered with the Virginia Department of Motor Vehicles (DMV) as a converted EV. DMV converted EV registration requires certification by a certified Virginia safety inspector that the conversion to electric propulsion is complete and proof that the vehicle has passed a Virginia safety inspection. The inspector must verify that the internal combustion engine and fuel tank have been removed, a traction battery has been installed that is separate from the vehicle's original auxiliary battery system, and an electric motor has been installed to drive the wheels of the vehicle. The inspector is not liable for the quality of the conversion, but they are responsible for the accuracy of the safety inspection. Converted EVs must be equipped with special equipment, including high voltage cables, a temperature monitoring system for traction batteries other than lead acid batteries, and labeling on three sides of the vehicle identifying it as "Converted Electric." Once established, federal minimum equipment and safety standards for converted EVs will also apply. (Reference House Bill 780, 2012, and Virginia Code 46.2-602.3, 46.2-625, 46.2-1001.1)

Alternative Fuel Vehicle (AFV) Fund

The AFV Conversion Fund (Fund) is created to assist commonwealth agencies with the incremental cost of commonwealth-owned AFVs, both original equipment manufacturer vehicles and aftermarket conversions. Funding may be used in conjunction with or as matching funds for any eligible federal grants for the same purpose. The Virginia Department of General Services and the Department of Mines, Minerals and Energy must establish guidelines for contributions and reimbursements from the Fund for the purchase or conversion of commonwealth-owned vehicles. The Fund will include appropriations from the Virginia General Assembly as well as donations, grants, in-kind contributions, and other funding. (Reference (Reference Senate Bill 485, 2012, and Virginia Code 2.2-1176.1)

Alternative Fuel Public-Private Partnerships

The Virginia Offices of the Secretary of Administration and the Secretary of Natural Resources released a public-private partnership solicitation outlining their interest in forming partnerships with and among alternative fuel providers, infrastructure developers, vehicle manufacturers, and other alternative fuel industry stakeholders to expand fueling infrastructure and to support alternative fuel use in the commonwealth fleet. By May 2012, the Virginia Department of General Services and the Department of Mines, Minerals, and Energy must make a recommendation on whether the commonwealth should establish more formal public-private partnership agreements to accomplish the overall goal of transitioning commonwealth vehicles to alternative fuels. (Reference Executive Order 36, 2011)

Authorization for Plug-In Electric Vehicle Charging Rate Incentives

The Virginia State Corporation Commission (SCC) directs public utilities to evaluate time-differentiated rates and other incentives to encourage off-peak all-electric (EV) and plug-in hybrid electric vehicle charging. The SCC may authorize public utilities to conduct pilot programs to determine the feasibility and implications of offering off-peak rates and other incentives. Pilot programs may include voluntary load control options, rate structures with financial incentives, rebates, or other incentives that offset the cost of purchasing or installing electric vehicle supply equipment for users who elect off-peak rate structures. An electric utility that participates in an approved pilot program may be entitled to recover annually the costs of its participation in any pilot program conducted on or after January 1, 2011. (Reference House Bill 2105, 2011, and Virginia Code 56-232.2)

Retail Electric Vehicle (EV) Charging Regulations

Retail PEV charging services provided by an individual who is not a public utility, public service corporation, or public service company, do not constitute the retail sale of electricity if the electricity is used solely for transportation purposes and the person providing the PEV charging service has procured the electricity from an authorized public utility. The Virginia State Corporation Commission may not set the rates, charges, or fees for retail PEV charging services provided by non-utilities. (Reference Virginia Code 56-1.2 and 56-232.2:1)

Alternative Fuel and Fuel-Efficient Vehicle Acquisition Plan

Virginia Department of General Services (DGS) policies and procedures must include guidelines for the purchase of fuel-efficient, low emissions, commonwealth-owned vehicles, as well as guidelines for leasing vehicles that give a preference to compact, fuel-efficient, and low emissions vehicles. By January 1, 2012, DGS was required to establish a plan to replace commonwealth-owned or operated vehicles with vehicles that operate using natural gas, electricity, or other alternative fuels, to the greatest extent reasonable, considering available infrastructure, vehicle location and use, capital and operating costs, and potential for fuel savings. All commonwealth agencies and institutions must cooperate with DGS in developing and implementing the plan. (Reference Virginia Code 2.2-1176 and Executive Order 19, 2010)

Biodiesel and Green Diesel Fuel Use Requirement

Commonwealth agencies and institutions must procure only diesel fuel containing at least 2% biodiesel (B2) or green diesel fuel for use in on-road diesel internal combustion engines; this requirement does not apply if supply is not readily available or the cost of the fuel exceeds the cost of conventional diesel by 5% or more. The Virginia Department of General Services must establish conditions under which commonwealth agencies and institutions may procure these blended fuels, taking into consideration the availability of the fuel and cost of biodiesel compared to diesel fuel. (Reference Virginia Code 2.2-1111 and Executive Order 19, 2010)

Alternative Fuel Research and Development Funding

The Virginia Universities Clean Energy Development and Economic Stimulus Foundation will identify, obtain, disburse, and administer funding for alternative fuel and related technology research, development, and commercialization. The funds may be distributed as grants, loans, or through other methods. (Reference Virginia Code 23-300 through 23-303)

Biofuels and Green Diesel Definitions

Advanced biofuels are defined as fuels derived from any cellulose, hemicellulose, or lignin from renewable biomass or algae. Biofuels are defined as neat biodiesel, green diesel, or ethanol fuels that are not blended with a conventional fuel such as gasoline or diesel. Biodiesel is defined as a fuel composed of mono-alkyl esters of long-chain fatty acids derived from vegetable oils or animal fats that is designated B100 and meets the requirements of ASTM D6751. Green diesel is a fuel produced from non-fossil renewable resources, including agricultural or silvicultural plants; animal fats; residue and waste generated from the production, processing, and marketing of agricultural products, silvicultural products; and other renewable resources; that meets applicable ASTM specifications. Ethanol is defined as denatured alcohol fuel that is derived from agricultural products or other renewable resources and meets applicable ASTM standards. (Reference Virginia Code 45.1-394 and 58.1-439.12:02)

Alternative Fuels and Electric Vehicle (EV) Tax

Liquid alternative fuels used to operate on-road vehicles are taxed at a rate of $0.175 per gallon. EVs registered in Virginia are subject to a $50.00 per vehicle annual license tax. (Reference House Bill 1248, 2012, and Virginia Code 58.1-2249)

Alternative Fuel License

Alternative fuel providers, bulk users, and retailers, or any person who fuels an alternative fuel vehicle from a private source that does not pay the alternative fuels tax must obtain an alternative fuel license from the Virginia Department of Motor Vehicles. (Reference Virginia Code 58.1-2244)

Provision for Alternative Fuel Vehicle (AFV) Tax Reduction

Local governments may reduce personal property taxes paid on AFVs, specifically vehicles that operate using natural gas, liquefied petroleum gas or propane, hydrogen, or electricity, including low-speed vehicles. (Reference Virginia Code 58.1-3506)

Compressed Natural Gas (CNG) Deregulation

The Virginia State Corporation Commission may refrain from regulating and setting rates, charges, and fees for retail CNG service provided by corporations other than public service corporations. (Reference Virginia Code 56-232.2)

Low-Speed Vehicle Access to Roadways

Low-speed vehicles may not operate on roads with posted speed limits of more than 35 miles per hour or on roads where the Virginia Department of Transportation or the local governing body has prohibited their use. A low-speed vehicle is defined as a four-wheeled electrically-powered vehicle capable of achieving a maximum speed of at least 20 miles per hour but not greater than 25 miles per hour. The vehicle must comply with safety standards specified in Title 49 of the Code of Federal Regulations, section 571.500. (Reference Virginia Code 46.2-100, 46.2-908.2, and 46.2-908.3)

Idle Reduction Requirement

Motor vehicles licensed for commercial or public service may not idle for more than three minutes in commercial or residential urban areas, unless the engine is providing auxiliary power for purposes other than heating or air conditioning. Tour buses and diesel vehicles are not permitted to idle for more than 10 minutes. (Reference Virginia Administrative Code 9-5-40-5670(C))

State Energy Plan

The Virginia Energy Plan assesses the commonwealth's primary energy sources and recommends actions to meet the following goals: make Virginia the energy capital of the East Coast by expanding traditional and alternative energy production, jobs, and investment, and increasing energy conservation and efficiency; expand public education about Virginia's energy production and consumption, its effect on the economy, and methods to increase energy efficiency; and maximize investment in clean energy research and development. The plan includes policies to promote alternative fuel and efficient vehicle use, encourage efficient driving techniques, and reduce vehicle miles traveled. (Reference Virginia Code 67-101, 67-102, 67-500, 67-501, 67-800, 67-801)

Alternative Fuel Vehicle (AFV) Signs

The Virginia Board of Education may provide for the display of signs or other markings on school buses using alternative fuels to identify the vehicle as an AFV and indicate the type of alternative fuel used. (Reference Virginia Code 46.2-1089.1)

Fuel-Efficient Driving Training

Commonwealth-approved driver education programs must include fuel-efficient driving practices as a curriculum component. (Reference Virginia Code 22.1-205)