Bacon's Rebellion

A Good Year for Retail Solar in Virginia

It’s not everything environmentalists wanted, but a new law will create new retail solar options for consumers. Photo credit: VA SUN

So, you want to help save the world from global warming but you’re stymied from installing solar panels atop your house. Maybe you rent the place. Maybe trees are shading the roof. Maybe you’re planning to move soon. Or maybe you just don’t have the money.

There are many reasons why even the most zealous green power advocates are stuck buying the same regular, garden-variety electricity as everyone else. But now, thanks to legislation passed in the 2017 General Assembly session, Virginia energy consumers soon will have a new option — subscribing to solar power rather than owning it outright.

SB 1393 requires Dominion Virginia Power and Appalachian Power to create solar programs in which the utilities bundle electricity from community solar projects — typically small solar farms or large rooftop arrays — and resell it to customers. Under the new plans, customers pay monthly knowing that their dollars are supporting development of solar facilities near where they live. If more customers subscribe, more solar farms will be built.

The scheme benefits small-scale solar developers as well. They don’t have to worry about signing up subscribers and the hassle that goes with billing and collections. It’s up to us to develop a program that’s attractive to subscribers,” says Katharine Bond, senior policy advisor for Dominion. The arrangement even works for rate payers who have no interest in going green. Says Bond: “The only people who bear the cost are those who elect to participate.”

The legislation represents a genuine step forward for retail solar in Virginia. “At the end of the day, I think it’s a really good policy that will benefit Virginians,” says Mike Town, executive director of the Virginia League of Conservation Voters. Equally important is the way in which utilities, solar developers and environmental groups sat down to work it out. “It’s precedent setting. It will lay the groundwork for progress down the road.”

While Virginia’s utilities are building large, utility-scale solar projects, state laws and regulations have made it all but impossible for independent developers to create smaller projects and sell electricity to individual businesses and households. Every year solar backers have submitted bills in the General Assembly to open up the market, and every year the legislation has been beaten back. Utilities have opposed measures that would cut into their monopoly in retail electricity sales.

In the 2016 General Assembly session, legislators submitted several retail solar bills that failed to pass. This time, lawmakers asked the utilities and solar industry to work on a compromise and come back with a proposal that would fare better in 2017. Dominion Virginia Power, Appalachian Power, and Virginia’s electric co-ops sat down with representatives of the solar energy to negotiate legislation that would let independent solar developers into the game.

Mark E. Rubin, director of the Virginia Center for Consensus Building at Virginia Commonwealth University, was hired to facilitate the dialogue. As the industry groups approached agreement, Rubin invited environmentalist groups to join the conversation. They injected important perspectives that would win the support of the environmental lobby.

“I think the general view was that this process turned out to be a helpful way to get together and work through issues,” Rubin says. “Just the idea that you had different stakeholders siting around the table having very candid, very productive discussions was a big deal in and of itself.”

The legislation doesn’t make everyone happy. In theory, existing Virginia law allows independent companies to sell renewable electricity to customers if neither Dominion nor Apco have tariffs to do so. Delaware-based Direct Energy filed a petition last year for declaratory judgment with the State Corporation Commission, asking the regulatory body to clarify the company’s rights under Virginia law to sell electricity to Dominion and Apco customers. The SCC ruled earlier this year that it could, but only as long as the utilities weren’t doing it. If utilities entered the market, Direct Energy could continue serving existing customers but couldn’t sign up new ones.

“It can take months or years of marketing for a third-party supplier to build up enough of a customer base to make the whole effort worthwhile, so the SCC’s ruling makes the Virginia residential market much less attractive,” writes Ivy Main, editor of the Virginia chapter of the Sierra Club’s “Power for the People” blog.

But environmental and solar-industry players participating in the collaborative process say that half a loaf is better than none.

“This is a pretty big win,” says Will Cleveland, staff attorney with the Southern Environmental Law Center. “The model they chose isn’t necessarily the model we would have advocated, but it’s a perfectly acceptable model. … If you want to subscribe to the program, it’s easy in-easy out. The solar rate is frozen. It will not rise. … We think that the rate will be very competitive with normal rates.”

“We spend a lot of time talking about all the things that Dominion doesn’t do right, and deservedly so,” says Towns with the Virginia League of Conservation Vogers. “But if you’re a resident and have big trees in front of your house, you can be part of the solar revolution. … It’s good for the market, good for the environment, good for the rate payer.”

People want the ability to band together to build their own communal facilities. “I have to tell them that’s not legal,” says Aaron Sutch, program director of VA SUN, a non-profit that runs solar co-ops that negotiate with installers for better rates. But “at the end of the day, [SB 1393] is a positive step in the right direction.”

The General Assembly passed two other bills that move solar energy forward incrementally. One bill allows farmers to use up to 25 percent of their land for a solar generating facility and lets them sell surplus energy not consumed by the farm to their utility. A second measure increases the capacity of small renewable projects — from 100 to 150 MW — that is exempt from environmental review by the State Corporation Commission.

The same collaborative process that led to SB 1383 can serve as the basis for working out solutions to other seemingly intractable issues, and the discussions with Rubin are continuing. One big outstanding issue, he says, is net metering — a billing mechanism that credits individual solar owners with surplus electricity they feed into the grid. Owners want utilities to pay them the retail rate; utilities want to pay them the wholesale rate.

“It’s a very complicated issue,” says Rubin. “We talked about it some last time and didn’t get there. But folks were encouraged by the tenor of the discussion.”

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