Virginia Laws and Incentives
Listed below are the summaries of all current Virginia laws, incentives, regulations, funding opportunities, and other initiatives related to alternative fuels and vehicles, advanced technologies, or air quality. You can go directly to summaries of:
Transit Emissions Reduction Grants
The Virginia Department of Rail and Public Transportation’s (DRPT) Making Efficient + Responsible Investments in Transit (MERIT) program provides funding for capital improvement projects, including the purchase or lease of new plug-in electric or hybrid electric vehicles. Funding amounts vary based on the project type.
In addition, as part of the MERIT program, the Clean Transportation Voucher Program (Program) offers grants of up to 100% of the incremental cost for transit agencies to replace model year 2009 or older Class 7 and Class 8 diesel transit buses with all-electric buses and up to 100% of the purchase cost of associated charging infrastructure. Awards are capped at $500,000 per electric bus, including charging infrastructure. The Program is funded by Virginia's portion of the Volkswagen Environmental Mitigation Trust.
Point of Contact
Air Quality Planner, Volkswagen Settlement Agreements
Virginia Department of Environmental Quality
Phone: (804) 698-4130
Government Alternative Fuel Vehicle (AFV) Incentive
The Virginia Department of Mines, Minerals and Energy, in collaboration with the Virginia Department of Transportation, offers up to $10,000 to state agencies and local governments for the incremental cost of new or converted AFVs. To be eligible, vehicles must comply with Buy America provisions or qualify for a waiver from the U.S. Department of Transportation Federal Highway Administration, and must be garaged in areas of air quality nonattainment, as recognized by the federal Congestion Mitigation and Air Quality Improvement (CMAQ) program. Current funding applications are due July 1, 2020. For more information, see the Virginia CMAQ Incentive Program website.
Point of Contact
Virginia Department of Mines, Minerals, and Energy
Phone: (804) 692-3224
Port Drayage Truck Replacement and Retrofit Incentive
The Virginia Port Authority, in partnership with Virginia Clean Cities, offers regional Congestion Mitigation and Air Quality Improvement funds to retire aging drayage trucks and replace them with modern clean diesel vehicles. This program provides 50% of the cost to purchase new clean diesel drayage trucks, up to $30,000. Funding is not available for this incentive, but applicants may apply to join the program waitlist (verified March 2020). For more information, including eligible vehicles, see the Green Operator website.
Biodiesel Production Tax Credit
Qualified biodiesel and green diesel producers are eligible for a tax credit of $0.01 per gallon of biodiesel or renewable diesel fuels produced. This credit is available for producers who generate up to two million gallons of biodiesel or renewable 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. For more information, see the Virginia Department of Taxation website. (Reference Virginia Code 58.1-439.12:02)
Agriculture and Forestry Biofuel Production Grants
The Agriculture and Forestry Industries Development Fund provides grants to promote and develop the agriculture and forestry industry in Virginia and create or expand value-added facilities, including qualified biofuel production facilities. Individual grants may not exceed $500,000 or 25% of qualified capital expenditures. Eligible applicants include local governments and other Virginia political subdivisions working with qualified businesses. Additional terms and conditions apply. For more information, see the Virginia Department of Agriculture and Consumer Services website. (Reference Virginia Code 3.2-304)
High Occupancy Vehicle (HOV) Lane Exemption
Alternative fuel vehicles (AFVs) displaying the Virginia Clean Special Fuel license plate may use Virginia HOV lanes on specified areas of I-64, I-264, the Dulles Toll Road, and in the City of Alexandria, regardless of the number of occupants. For HOV lanes serving the I-66 corridor, only registered vehicles displaying Clean Special Fuel license plates issued before July 1, 2011, are exempt from HOV lane requirements. Eligible vehicles include dedicated AFVs; see the Virginia Department of Motor Vehicles website for a complete list of qualifying vehicles. The annual fee for Clean Special Fuel license plates is $25 in addition to the prescribed fee for commonwealth license plates. This exemption expires September 30, 2025. For more information, see the Virginia Department of Transportation HOV Lanes website. (Reference Virginia Code 33.2-501 and 46.2-749.3)
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, 2021. For more information, see the Virginia Department of Taxation website. (Reference Virginia Code 58.1-439.12:05)
Biofuel Feedstock Registration Exemption
Individuals that transport waste kitchen grease for conversion to biofuel are exempt from both the Virginia Department of Health registration and the associated annual application fee. This exemption applies to individuals transporting the waste kitchen grease for their own consumption in a container with a capacity of no more than 275 gallons, and to kitchen grease transportation to a biofuel production facility. Eligible facilities may not have a production capacity over 500 gallons per day of biofuel nor possess or control more than 1,320 gallons of kitchen grease, biofuel feedstock derived from kitchen grease, or biofuel at any one time. Other restrictions and requirements apply. For more information, see the Virginia Department of Agriculture and Consumer Services website. (Reference Virginia Code 3.2-5508 through 3.2-5516)
Alternative Fuel and Hybrid Electric Vehicle (HEV) Emissions Testing Exemption
Vehicles powered exclusively by natural gas, propane, hydrogen, a combination of compressed natural gas and hydrogen, or electricity are exempt from the Virginia emissions inspection program. 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. For more information, including a list of HEVs that qualify, see the Virginia Department of Motor Vehicles Emissions Inspections website. (Reference Virginia Code 46.2-1177 through 46.2-1178 and 46.2-749.3)
Idle Reduction and Natural Gas Vehicle (NGV) 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 550 pounds (lbs.) to compensate for the added weight of the idle reduction technology. Furthermore, any NGV may exceed the limits by up to 2,000 lbs. To be eligible for the weight exemption, certification of the weight of the auxiliary power unit or proof that the vehicle operates on natural gas, and a demonstration that the vehicle is fully functional must be available to law enforcement officials. (Reference Virginia Code 46.2-1129.1 and 46.2-1129.2)
Alternative Fuel Tax Exemption
Alternative fuel is exempt from taxes if it is sold to a government entity for its exclusive use, a non-profit charitable organization for the purpose of providing charitable services for low-income medical patients, or produced by an agricultural operation and used exclusively for farm use or vehicles of that producer. (Reference Virginia Code 58.1-2250)
Plug-In Electric Vehicle (PEV) Time-of-Use (TOU) Rate – Appalachian Power Company
Appalachian Power Company offers a TOU rate to residential customers that own a PEV. Off-peak hours are 8pm to 6am on weekdays and all day on Saturdays and Sundays. Eligible customers must have a meter that is capable of separately identifying PEV usage. For more information, including billing rates and additional service conditions, see the Appalachian Power Company Virginia Rates & Tariffs website. This service is experimental and only available until September 12, 2023.
Clean Transportation Technology Investment Funding - Center for Innovative Technology (CIT)
CIT’s Commonwealth Energy Fund (CEF) provides early-stage investment funds for Virginia-based technology, life science, and clean technology companies. Eligible clean transportation technologies may include vehicles, components, batteries, and fuel cells, in addition to biofuels. For more information, see the CEF website.
Laws and Regulations
Electric Vehicle (EV) Rebate Program Working Group
The Virginia Department of Mines, Minerals, and Energy in collaboration with the Department of Environmental Quality, Department of Taxation, and the Department of Motor Vehicles will convene a working group to evaluate the feasibility of an EV rebate program. The working group will:
- Review methods for structuring and administering an EV rebate program;
- Review funding options;
- Evaluate vehicle sales data in states that offer EV rebates,
- Identify metrics for evaluating an EV rebate program for incentives under $4,500, and;
- Recommend incentives for low-income individuals.
Natural Gas Vehicle (NGV) Technician Certification
The Virginia Department of Professional and Occupational Regulation (DPOR) administers a program to certify NGV mechanics and technicians. For application and certification information, see the DPOR Natural Gas Automobile Mechanics and Technicians Advisory Board website. (Reference Virginia Code 54.1-2355 through 54.1-2358 and Virginia Administrative Code 18-120-50)
Aftermarket Electric Vehicle (EV) Conversion Regulations
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 Virginia safety inspector that the conversion to electric propulsion is complete and proof that the vehicle has passed a Virginia safety inspection. The inspector may charge a fee, not to exceed $40, in addition to any fee imposed for Virginia 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." For more information, see the DMV Titling a Converted EV website. (Reference Virginia Code 46.2-602.3, 46.2-625, and 46.2-1001.1)
Electric Vehicle Supply Equipment (EVSE) Policies for Associations
Homeowners associations (HOAs) or condominium associations may not prohibit the installation of an EVSE for personal use within the EVSE owner’s designated parking space. HOAs may establish restrictions on the number, size, placement, manner of installation, and insurance requirements for the EVSE if it is installed on the exterior of the property or in a common area. HOAs are not liable for the EVSE.A condominium association may prohibit the installation of an EVSE if it is not technically feasible or practical due to safety risks, structural issues, or engineering conditions. Condominiums may establish requirements on the manner of installation, architectural design, insurance requirements, and community-related expenses for the EVSE. (Reference Senate Bill 630, 2020, and Virginia Code 55.1-1823.1, 55.1-1962.1, and 55.1-2139.1)
Utility Company Electric Vehicle Supply Equipment (EVSE) Requirement
Utilities must establish electric distribution grid transformation projects that facilitate the integration of electrical facilities and infrastructure necessary to support EVSE. Utilities will petition the State Corporation Commission for program approval and will receive a final order within six months of the petition filing.(Reference Senate Bill 851, 2020, and Virginia Code 56-576 and 56-585.1)
Alternative Fuel School Bus 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)
Public Utility Definition
An entity that is not a public utility, public service corporation, or public service company that provides retail plug-in electric vehicle (PEV) charging services is not defined as a public utility and may sell electricity if the electricity is used solely for transportation purchases and the entity 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 56-1.2:1 and 56-232.2:1)
Public Entity Retail Plug-In Electric Vehicle (PEV) Infrastructure Authorization
Any state government entity, as well as any locality, public institution of higher education, or school boards, may operate retail fee-based PEV charging infrastructure on its property. A locality may restrict use to employees of the locality and authorized visitors and may install signage that details these restrictions. Retail fee-based PEV charging provided by DGS, DMV, and DOT must be offered at rates similar to those in competitive areas. PEV charging infrastructure access must be restricted to employees, students, and authorized visitors only during school hours, and must be accompanied by appropriate signage. (Reference Virginia Code 22.1-131, 56-1.2, 56-1.2:1, 56-232.2:1, and 2.2-614.5)
Biodiesel and Renewable Diesel Definitions
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. Renewable 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. (Reference Virginia Code 58.1-439.12:02)
Alternative Fuel and Vehicle Tax
Alternative fuels used to operate on-road vehicles are taxed at a rate of $0.162 per gasoline gallon equivalent (GGE). Alternative fuels are taxed at the same rate as gasoline and gasohol (5.1% of the statewide average wholesale price of a gallon of self-serve unleaded regular gasoline). Refer to the Virginia Department of Motor Vehicles (DMV) Fuels Tax Rates and Alternative Fuels Conversion website for fuel-specific GGE calculations.All-electric vehicles (EVs) registered in Virginia are subject to a $64.00 annual license tax at time of registration. For more information, see the Virginia DMV Electric Vehicles website. (Reference Virginia Code 58.1-2217 and 58.1-2249)
Alternative Fuel Provider 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 (DMV). For more information, see the DMV Fuels Tax Licensing website. (Reference Virginia Code 58.1-2244)
Ethanol Production Equipment Tax Exemption Authorization
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)
Alternative Fuel Vehicle (AFV) Tax Reduction Authorization
Local governments may reduce personal property taxes paid on AFVs and low-speed vehicles. AFVs include vehicles that operate using natural gas, liquefied petroleum gas or propane, hydrogen, or electricity. (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
A low-speed vehicle is defined as a four-wheeled electrically- or gas-powered vehicle capable of achieving a maximum speed of at least 20 miles per hour (mph) but not greater than 25 mph. The vehicle must comply with safety standards specified in Title 49 of the Code of Federal Regulations, section 571.500. Low-speed vehicles titled and registered with the Virginia Department of Motor Vehicles (DMV) must display designated DMV license plates. Low-speed vehicles may not operate on roads with posted speed limits of more than 35 mph or on roads where the Virginia Department of Transportation or the local governing body has prohibited their use. (Reference Virginia Code 46.2-100, 46.2-908.2, 46.2-908.3, and 46.2-711)
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 (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; assess the impact of federal clean air standards; 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. The Department of Mines, Minerals and Energy must submit the Plan to the governor, the State Corporation Commission, and the General Assembly by October 1 of each year following the election of a new governor. For more information, see the Virginia Energy Plan website.
(Reference Virginia Code 67-101 and 67-102)
Alternative Fuel School Bus Regulations
The Virginia Board of Education may not unreasonably limit the authority of any local school division to purchase and use school buses powered by or converted to compressed natural gas or other alternative fuels.
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 alternative fuel vehicle and indicate the type of alternative fuel used.
(Reference Virginia Code 22.1-177 and 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)