Deputy Secretary, Virginia Department of Commerce and Labor
Director, Virginia Department of Energy
September 16, 2022
Re: Virginia Energy Plan: Community Solar offers opportunities for energy savings, spur economic activity, and increase grid reliability and resiliency
Dear Deputy Secretary Jenkins and Director Warren:
As a leading developer, financier, and asset manager of solar plus storage assets across the nation, Distributed Solar Development LLC (DSD Renewables) appreciates the opportunity to provide comments on the Virginia Energy Plan for your consideration. Currently, solar is the largest job source for all electric power generation in Virginia. With forward-looking policy and regulatory framework, incentive structures, and clear direction from the administration, Virginia is poised to become a leader in clean energy innovation that creates jobs, spurs new economic opportunities, and provides transformational energy solutions to the business community.
Our commitment to Virginia
DSD is a very active solar developer across all active Community Shared Solar markets, and has institutional experience in commercial and industrial, and municipal installations across the United States. Virginia is a promising new market for both Community Shared Solar and Behind the Meter (BTM) projects. DSD is currently engaged in various negotiations to develop BTM projects and acquire ownership of Community Shared Solar assets. As such, DSD strongly believes that a comprehensive and implementable energy plan will create viable and financeable programs. Our comments below primarily focus on Community Shared Solar program, and we trust other industry leaders and energy advocates will provide detailed comments on other crucial topics.
We commend Virginia for enabling a community shared solar program. However, to provide long-term certainty to solar developers such as DSD and ensure the benefits of community solar continue for all Virginians, it is imperative that the current program be made permanent. Moving towards a permanent community solar program will also aid Virginia’s long-term energy planning process. DSD also recommends program size cap that is vetted by energy developers, advocates, state leadership, and other stakeholders. Moving towards a permanent program will keep Virginia competitive and infuse new private capital in the state. Virginia’s neighboring states such as Maryland, Delaware, and New Jersey are also beginning to explore permanent community solar programs.
While DSD recognizes that a certain level of charge to cover incremental utility infrastructure and service costs is justified, we urge Virginia to earnestly account for grid benefits that shared solar programs create while calculating the minimum bill requirements. As a best practice, the total amount of the minimum bill should not exceed two times the basic customer charge. Making minimum bill charges exorbitant will not only deter customers from participating in the share solar program, but it will also impede Virginia from realizing other grid benefits such as increased resiliency and reliability. DSD agrees with other solar stakeholders that $25/month as a minimum bill requirement is fair and reasonable and assures that both the shared solar customers and the utility are fairly compensated.
For a shared solar program that allows for financeable projects, DSD believes it is necessary to ease the financial fitness requirements of the SCC licensure process and Dominion project registration. This will commensurately match the financial risk of shared solar projects in relation to other energy products such as retail supply. Importantly, in other established programs, a bond and application fee are utilized in addition to penalties for default to ensure that developers comply with program rules and act in good faith. Shifting to this model will help incentivize greater development in shared solar projects in Virginia without exposing customers or Dominion to increased risk.
DSD strongly believed that Virginia utilities’ rate structures must evolve to keep up with the evolving electricity resource mix. Time of use (TOU) rates is one such mechanism for utilities to effectively respond to the increased level of customer-sided energy production. Mechanisms such as TOUs become even more crucial as new solar, storage, and electric vehicle charging infrastructure (EVCI) are added to the grid. Lack of a modernized rate structure will create inefficiencies between an evolving grid and customer needs.
In addition to the above points, Virginia should work towards removing any impediments to clean energy development. These can range from land-use restrictions for solar development, onerous permitting process, and other soft costs that increase project costs and timeline. On land use, having clear guidelines on what lands are suitable for solar development can save solar developer’s time and resources. On the contrary, lack of clear guidelines and individual county ordinances can slow down development cycles and increase business costs.
On another crucial topic of stormwater management, the new Department of Environmental Quality (DEQ) stormwater guidance that treats solar panels as impervious can impose new burdens on solar developers. We agree with CHESSA’s position that DEQ change its grandfathering provision in Guidance Memo No. 22-2012 to use the trigger used by the General Assembly in House Bill 206 or Section 58.1-3660.
DSD would also like to see Virginia incentivize solar project development on under-utilized sites such as rooftops, brownfields, low-income communities etc. A targeted approach like this will meet dual goals – new solar development and revitalization of marginalized lands, rooftop spaces, and underserved communities.
Lengthy interconnection queues dramatically increase project costs and timelines. We appreciate the current efforts undergoing in Virginia to streamline interconnection process. Ensuring reasonable timelines and adequate cost-sharing mechanisms will go a long way to continue new solar investments in the states.
Virginia already has a strong renewable portfolio standard (RPS). The next key aspect should be accounting that the targets laid out in the Virginia Clean Economy Act are met in a timely fashion. DSD also recommends that Virginia go a step further and identify and address any bottlenecks to RPS implementation as listed in points 4, 5, and 7 above.
Virginia has tremendous potential to lead the clean energy sector. By drawing on its advantages of a strong and skilled workforce, innovative landscape, and business friendly environment, Virginia must move towards a clean and modernized grid that provides solutions to the evolving needs of the business community, various institutions, and communities. We applaud Governor Youngkin for taking this crucial step of developing a state energy plan. Please let us know if we can further assist Virginia's energy planning process.
Senior Director, Policy
Distributed Solar Development LLC