Virginia law expands shared solar into coal country, but key details still have to be worked out

In 2022, a revitalized proposal to establish a communal solar initiative in Southwest Virginia finally gained traction this year.

The General Assembly approved two bills (SB 255, HB 108) instructing utility regulators to establish Appalachian Power’s first 50-megawatt program by January 1.

Despite the program’s relatively small scale as outlined in the new legislation, Charlie Coggeshall, the Mid-Atlantic regional director for the Coalition for Community Solar Access, is pleased with the progress made in a region that has traditionally relied on the coal industry.

“Our expectations had to be tempered significantly,” Coggeshall said.

“But we got to a place where we’re putting a stake in the ground in Southwest Virginia, a win for continuing the advancement of shared solar in Virginia.”

The timeline for when Appalachian Power customers will be able to subscribe is still uncertain.

The utility is required to provide tariff information and fulfill other related requirements by July 1, 2025.

The Senate and House of Delegates have approved separate bills, SB 253 and HB 106, to expand Dominion Energy’s current shared solar program from 200 MW to 350 MW.

Shared solar, also known as community solar, enables Virginians to buy solar power through subscriptions to off-site arrays owned by third-party entities.

This is particularly beneficial for customers who cannot afford rooftop panels, residents with shaded southern exposure or homeowner association restrictions, as well as apartment renters and condominium owners.

Subscribers can earn credits on their monthly electric bills and contribute to the cost of constructing the shared array.

There are hopes that future programs for investor-owned utilities will provide incentives for shared solar projects on underused surfaces like rooftops, landfills, and brownfields, or those that integrate solar with agriculture ventures.

The Virginia Department of Energy will establish a stakeholder group to determine the specifics of these incentives.

Despite previous setbacks, advocates are determined to see the implementation of a viable model that attracts both subscribers and solar developers through the State Corporation Commission.

“I’m over the moon that we are establishing shared solar in Appalachian Power territory,” Anderson said. “But my fear is that if we don’t have demonstration projects to build from, we’ll have to go back and rewrite the bill.”

There has been a long-standing debate over the “minimum bill” in Dominion’s shared solar program.

This fee, set at $55 in 2022, is intended to cover the program’s implementation costs and the use of the utility’s grid infrastructure.

However, lower-income participants are exempt from paying this fee.

Advocates argue that such a high charge could deter wealthier residents from enrolling in a renewable energy initiative meant to save customers money.

As a result, since the program began enrolling participants on July 1, this has been the case.

In contrast, the Appalachian Power program also includes a minimum bill but does not offer an exemption for lower-income customers.

“This makes it risky for solar project developers,” Coggeshall said.

“With Dominion, at least developers can be somewhat confident about building a project that’s 100 percent for low- and middle-income customers.

Appalachian Power doesn’t have that kind of backstop.

“Still, the interest is there. I have coalition members asking me about Southwest Virginia.

I tell them the economics are to be determined. We won’t know for about a year.”

The responsibility of setting the minimum fee for Appalachian Power lies with utility regulators. During this session, the utility advocated for changes to the legislation in order to prevent non-participating customers from being affected by the costs of incorporating shared solar.

“This issue is specifically listed within the bill as a factor the SCC must consider when determining the minimum bill,” spokeswoman Teresa Hamilton Hall said.

“Appalachian Power worked hard to get this language inserted in the legislation, and we believe the SCC will be mindful of the financial impacts to non-participating ratepayers when making decisions.” 

Advocates will be analyzing the docket to ensure a fair minimum bill is set, and they are also encouraged by the new Dominion law, which mandates regulators to reevaluate the current $55 minimum bill for market-rate subscribers.

The commission is required to assess the benefits of shared solar to the electric grid and the state, and subtract those benefits from other costs.

Regulators must outline each cost, benefit, or value used to determine the minimum charge.

This law essentially demands a reassessment of the minimum bill, as other states already acknowledge that shared solar and other distributed generation projects assist utilities in offsetting the cost of transmitting and generating power, according to Coggeshall.

“Dominion has failed to look at the other side of the ledger and ask what the benefits of solar really are,” he said.

“This law is forcing that discussion. Nothing is guaranteed. It’s still going to be a big fight.”

Anderson mentioned that it will be interesting to observe how the three-member SCC, with two new commissioners, will approach the task of determining a value for solar energy that will influence the minimum bill.

“The commission is where the rubber meets the road,” he said. “I’m an optimist. We’ll take our swings in front of the commission.

My fingers are crossed and I’m hopeful we get projects in the ground.”

Robin Dutta, the interim executive director of the Chesapeake Solar and Storage Association, mentioned that the inclusion of shared solar in Republican Gov.

Glenn Youngkin’s 2022 Energy Plan has given it a higher level of importance among lawmakers.

The focus is on making small progress rather than big advancements.

“It’s a great example of how clean energy should be bipartisan because it’s a step forward in building an equitable clean-energy economy,” he said. “Seeing the program expand in megawatts and territory is valuable.”

He stated that preventing any growth since the initial authorization of shared solar legislation would have been the worst possible outcome.

In 2020, Sen. Scott Surovell, a strong supporter of shared solar in Fairfax County, introduced the original legislation, reluctantly setting Dominion’s program cap at 150 MW.

This cap could be extended to 200 MW if at least 30% of the participants were classified as lower income.

No project could exceed 5 MW in size.

To date, Dominion has approved 41 shared solar projects totaling nearly 150 MW, as indicated on its website.

Enrollment for these projects began on July 1, 2020, when the law came into effect.

An additional 15 projects, totaling over 60 MW, are on Dominion’s waiting list.

Under the new law, half of the extra 150 MW in Dominion’s territory can serve lower-income subscribers.

However, the remaining 75 MW must be divided between market-rate and lower-income subscribers.

A change in the Dominion program now allows the utility to retain the renewable energy credits from each project to meet the state’s renewable portfolio standards.

Appalachian Power will also benefit from retaining its renewable energy credits.

“Before, developers in Dominion territory could do anything at all with the credits,” Coggeshall said.

“Monetizing the credits helped developers recover costs of building projects, so that’s a lost economic advantage.

That change might provide ammunition to regulators to lower the minimum bill.”

“Virginia is not New York,” he concluded.

“It has been a roller coaster trying to strike a balance to meet Virginia where it is at instead of where we want it to be.”

Source Virginia