August 21, 2018
Virginia Department of Mines, Minerals, and Energy
Attn: Al Christopher
Sun Tribe Solar’s Comments to the Virginia Energy Plan
Sun Tribe Solar is pleased to submit the following recommendations focused on maximizing job growth in the energy sector for consideration to Governor Northam’s Virginia Energy Plan.
Sun Tribe Solar proposes three actions to grow solar jobs in Virginia:
ACTION #1: ISSUE LOCAL PROCUREMENT GUIDANCE FOR UTILITY-SCALE SOLAR PROJECTS
Over the next three years, roughly $3B will be invested in the construction of over 3,000MW of utility-scale solar by Virginia IOUs to meet targets established by SB966. This represents a tremendous job growth opportunity. Given the speed at which the demand was created through SB966, out-of-state firms in more mature solar markets are the likely the beneficiaries of this business opportunity. In-state firms possess the technical skill to participate in this market opportunity and are able to offer competitive prices. However, absent guidance from policy makers, utilities are unlikely to move away from long-standing national relationships to deliver these projects, minimizing the local job growth opportunity. By guiding this procurement toward Virginia firms, we can accelerate the growth Virginia solar companies at no additional cost to the ratepayer, positioning Virginia’s clean energy economy to not only deliver on its own state goals, but also building the industry’s capacity to become a net exporter of those services to surrounding states.
Pass guidance on utility-scale solar procurement by IOUs to require 75% of SB966 procurement targets to be engineered and constructed by Virginia companies.
ACTION #2: ESTABLISH WHOLESALE DISTRIBUTED GENERATION MARKET
Wholesale Distributed Generation (WDG) refers to distributed generation systems that connect to the distribution grid and sell the electricity they produce to the local utility to serve local energy demand. This market does not exist in Virginia.
Virginia primarily relies on large-scale, fossil fuel and nuclear power plants, located far from the communities where energy demand is greatest. This centralized approach requires the long-distance transmission of energy from central power plants to the local distribution grids where the energy is actually used. Recent policy and regulation has focused on replacing our aging fossil fuel and nuclear electricity generation infrastructure with correspondingly large-scale renewable power facilities and related infrastructure. However, energy produced and sold at the distribution level represents the greatest near-term job growth opportunity in Virginia. In contrast to large-scale renewable energy projects, wholesale distributed projects become “shovel-ready” within months. WDG projects utilize significantly more local labor than utility-scale solar and produce low-cost energy for rate payers by avoiding costs associated with transmission. These relatively small projects can be deployed on existing buildings, avoiding the long time horizons associated with the development of large-scale renewable projects. Importantly, a WDG marketplace allows access to clean energy opportunity to a whole new class of business owners, commercial and industrial landlords who do not currently have a way to participate in the clean energy economy. Lastly, investments in generation at the distribution level make our grid more resilient and less vulnerable to attack or disaster.
Urge the legislature and SCC to engage in a transparent, multi-stakeholder process with the goal of establishing a Feed-in-Tariff Pilot Program for Wholesale Distributed Generation. Compensation for WDG should include all the benefits DG provides to the grid including but not limited to energy, capacity, ancillary services, environmental attributes, and avoided costs of transmission infrastructure. This pilot program would allow necessary data to be gathered to determine the economic value of those WDG benefits. For the purposes of the pilot program, an economic value of WDG job creation would be legislated and directed to the SCC for consideration in ratemaking. To create a viable market and associated job growth, market value of WDG must exceed .07/kWh. Proposed pilot program details below:
This Pilot Program is not a replacement for commercial net metering, but is meant to be a proof of concept. Data on the installations shall be collected by DMME and shall be accessible to all stakeholders. Data points to be collected by DMME shall include: System size (AC and DC), date of interconnection, GPS coordinates of POI, substation, interval data of generation.
The pilot program explores the path to market for non-owner-occupied building owners and serves as a complement for the 5,500MW of utility-scale renewables slated for procurement.
ACTION #3: INCREASE THE MAXIMUM ALLOWABLE SIZE FOR DISTRIBUTED GENERATION SYSTEMS
Current regulation limits the size of distributed generation systems to lesser of the trailing 12 months of consumption and 1MWac per meter. This arbitrarily limits the size of on-site solar systems for Virginia’s large commercial and industrial entities where consumption regularly exceeds the output of 1MWac systems. The ability to install larger on-site solar systems will improve the economic outcomes for system owners, increasing demand and expanding the market. Additional job growth in the solar industry will be required to meet this demand.
The 1MWac per meter size limit on distributed generation be removed and the trailing 12 months of consumption be used to determine maximum allowable system size.