It is good to see that solar energy is finally gaining a toehold in Virginia’s energy mix, but there is much more that needs to be done to encourage the use of solar in the state and to level the playing field for individuals and businesses who want to play their part in shifting society toward clean, sustainable energy sources.
Unfortunately, Virginia’s current legislative and regulatory framework is designed more to protect utility company profits than the public interest. It is important to note that the only supportable justification for state-sanctioned monopolies is in service of the public interest, but in Virginia, we seem to have gotten this backwards: ratepayers have become subservient to the utility companies whose lobbyists provide a steady stream of money and disinformation to our legislators.
Over the past couple of years, solar development in Virginia has become heavily skewed toward utility-scale projects which are designed to provide guaranteed rates of return for utility companies while impeding the deployment of distributed solar solutions by residents and businesses. To rectify this situation, a number of steps need to be taken:
1. Virginia should explicitly recognize that individuals and businesses have the right to deploy grid-connected net-metered solar-electric generation facilities on their own property (a.k.a. “distributed solar”), subject to reasonable but flexible guidelines on system size and appropriate technical review. The current limit on system capacity of “100% of the previous year’s usage” is far too restrictive and should, at a minimum, be doubled.
2. Owners of distributed solar generation facilities should receive fair retail value for any surplus electricity that they contribute to the grid. Under current practice, net-metered system owners are reimbursed for annualized surplus generation at wholesale rates, if at all; the utility company then resells that electricity to other customers at retail rates, effectively profiting from the private investments of their customers. This is just plain wrong.
3. Eliminate the 1% cap on net-metered contributions to the grid. This limit is technically indefensible — several other states already have far more distributed capacity in place — and will ensure that distributed solar never achieves its potential in Virginia. This cap serves only to protect utility companies’ market share and to discourage widespread adoption of distributed solar.
4. Raise the system size for which standby charges apply to at least 20 kW. The main effect of the current rule (10 kW) is to discourage deployment of systems which are appropriately sized to meet the energy needs of large residences and small businesses.
5. Many homeowners and small business owners in Virginia would like to “go solar” but are presently unable to do so, either because their sites are not suitable or because they cannot afford the large up-front costs. Recognizing that deployment of as much solar capacity as is technically feasible is in the public interest, Virginia should explicitly allow customers to buy into shared facilities (solar co-ops & true community solar installations) and to participate in solar leasing agreements with third parties. Furthermore, customers who own multiple sites within the same utility company jurisdiction should be allowed to credit surplus generation at one site against usage at other sites.
6. To further address the affordability issue, Virginia should establish a publicly financed low- or no-interest solar loan fund to enable homeowners and small businesses to spread the cost of solar installations out over a longer period of time, similar to the way in which autos or homes are financed, but with little-to-no interest expense.
7. Virginia should set aggressive, mandatory requirements for renewables in the state’s overall energy mix, with a robust in-state SREC market. This approach has been spectacularly effective in other jurisdictions as demonstrated by plummeting SREC prices, and is a key component in fostering small-to-medium scale solar installations.
8. Large-scale solar farms have large-scale impacts on the land and should be subject to careful evaluation regarding the best and highest use of a particular parcel, as well as stringent environmental review. In particular, destruction of woodlands and other important habitat for the construction of solar farms should be prohibited. Virginia has already sacrificed much of its land area to development and suburban sprawl. Solar siting policy should therefore steer deployment toward areas that have already been disturbed, e.g., residential and commercial rooftops, solar awnings over parking lots, unused or exhausted agricultural land, etc.
9. Virginia’s utility companies should be required to invest in grid modernization in order to, among other things, support distributed generation from renewable sources. The technology associated with electricity generation and distribution is evolving rapidly, and old models are quickly becoming obsolete. It is clear that on-site and neighborhood energy storage systems will be an important component in a modern electrical grid, and that distributed generation and storage can improve resiliency against increasingly severe weather events. Virginia’s energy policy should mandate these types of solutions and encourage innovation.
In addition to other benefits, widespread adoption of distributed solar in Virginia will result in many good technical jobs and will be an enticement for forward-looking companies to do business in the state. Virginia has been slow to adopt solar, and current state policies, while improving somewhat, continue to impede development of the industry within the state. New approaches and new mindsets are required, and the 2018 Virginia Energy Plan provides an opportunity for an important course correction.