Barriers to Solar Energy Must be Eliminated

The recent energy legislation, “Grid Transformation and Security Act” (SB966), has a number of significant flaws. It failed to set a sufficiently high target for solar. It also failed to remove a variety of barriers to third-party solar generation. The 2018 Energy Plan must review these barriers and recommend legislative remedies and other reforms so that solar becomes a greater perecent of VA energy at a faster pace. Remedies and reforms are especially critical to open the market for investment in distributed solar. How to do this:

• Remove the 1% cap on net metered solar. Net metering reduces the need for utilities to build expensive new generation facilities, reduces carbon in the grid and increases grid resiliance.The legislative cap on the amount of net metered solar in a utility territory stymies investment and threatens the viability of the rooftop solar installation business, which has created tens of thousands of jobs in other states. The 2018 Energy Plan should recommend repeal of the 1% cap.

• Clarify that third-party financing through power purchase agreements (PPAs) for customer-sited solar is legal. Under a third-party PPA, a solar developer owns and operates a solar facility on customer’s property and then sells the electrical output to the customer. The customer gets access to solar without incurring up-front costs.  While it appears that the PPAs are legal under the Virginia Code, the utilities have taken the position that PPA’s are only permissible as pilot programs. This has severely restricted the opportunity for third parties to pursue PPAs. The 2018 Energy Plan should recommend a legislative provision to clarify that third-party financing through PPAs is legal.

• Permit local governments to install solar facilities of up to 5 MW on government-owned property and use the electricity for government-owned buildings. Current law limits the output of a solar facility on government-owned properties to on-site use or use on contiguous property, and imposes a 1 MW cap on any project. The 2018 Energy Plan should recommend legislation that would allow local governments to credit up to 5 MW of output of a solar array located on government-owned property where there is no electric load – such as in the case of a closed landfill – to other government-owned properties within the same jurisdiction, such as schools or municipal buildings. This would enable local governments to host arrays on their properties above 1 MW and provide tax savings to residents.

• The Virginia Code permits farm customers to aggregate their meters thereby enabling them to put solar on one building (such as a barn) and attribute the output to other buildings on the farm. However, other customers do not have this flexibility and must limit use of the output of a solar array to one meter on the same property. The 2018 Energy Plan should recommend that the Virginia Code be amended to permit all customers to use the output of their solar array on buildings they own located on the same or adjacent property. 

• Allow customers to install a net-metered solar facility larger than that necessary to meet the previous 12 months of demand. Currently, customers can only install a net-metered solar facility that is designed to meet the previous 12 months of demand. This restriction prevents a customer from sizing a facility to meet future demand from, for example, purchases of electric vehicles or home additions. The 2018 Energy plan should recommend repeal of limitations currently imposed by the Virginia Code.

• Allow owner/operators of multi-family residential and commercial buildings to install a solar facility on the building or surrounding property and sell the output to tenants whether or not they are individually metered, without being treated as a utility. Under the Virginia Code, owners or operators are prohibited from installing solar facilities on multi-family residential as well as commercial buildings and selling the output to tenants without being treated as a utility. This restriction especially hurts low and moderate-income tenants of apartment buildings who would like the same access to onsite solar enjoyed by owners of single-family homes.

• Eliminate standby charges on residential solar facilities between 10 and 20 kW. Because of the growing popularity of electric vehicles, customers need larger residential solar systems. Standby charges act as a tax on the larger systems making them economically prohibitive. These charges, therefore, harm ratepayers by restricting the addition of privately-funded, clean peak power to the grid. The 2018 Energy Plan should recommend that the Virginia Code be amended to eliminate standby charges on residential solar facilities between 10 and 20 kW.