Over the past three years, Virginia has mainstreamed its energy policy, focusing it on solar and wind power generation. The Department of Environmental Quality has set a target of 5.5 GW of renewable energy by 2022, of which at least 3 GW must be deployed. In the past two years, the state has deployed solar-powered, gigawatt-scale power in the dwarf years.
Virginia is targeting 30% renewable energy by 2030 and 100% renewable energy by 2050. While most construction so far has been on the utility scale, the state also has significant incentives for solar and energy storage at the residential and commercial levels.
Virginia uses a traditional net metering program, meaning a solar customer will receive a credit on their bill for any excess electricity sent back to the grid. All residential customers with systems below 20 kW are charged the full retail rate. Non-residential projects can receive up to 1 MW of retail net metering and up to 500 kW of agricultural customers.
Virginia, like many states, has a property tax exemption for solar energy. While a home’s value will likely increase after going solar, Zillow estimates an average of 4%, property taxes won’t be assessed on that value increase. A residential property tax exemption earlier this year increased the system size to 25 kW.
In 2020, the Virginia Clean Economy Act was passed, which mandates the state obtain at least 1% of its energy from solar power through a renewable portfolio standard. To encourage this, the state established a solar renewable energy credit (SREC) program. A credit is given to the solar consumer for each megawatt-hour produced by the system. Virginia SRECs are currently priced at about $50 per month, with a price cap of $75.
The Virginia Clean Economy Act was a major step in the state’s energy transition. It is expected to create up to 13,000 jobs a year, generate approximately $70 billion in net benefits for residents and generate savings of up to $3,500 per household over the next 30 years. It also put caps on electricity bills, closed loopholes in energy monopolies and added energy efficiency programs for marginalized communities.
Federal incentives will make solar even more affordable for Virginians. The Investment Tax Credit was recently extended by 30% for the next decade. Credit also applies to battery energy storage.
A full list of solar and clean energy incentives can be found here.
Another policy development that solar advocates took issue with this year was the creation of a $55-a-month “shared solar” minimum bill. Similar to community solar, shared solar allows customers to plug in some off-site solar generation when rooftop solar isn’t a viable option. The $55 minimum bill is the highest in the country for good measure.
The approved legislation also determines the rate for promissory note loans within the program. $0.11765/kW to customers; however, Dominion Energy’s customers pay upwards of $0.124/kWh for conventional electricity, and rates continue to rise. Generally, community or shared solar programs offer savings on the bill or at least price parity with the market, but under this program, the economics are not particularly attractive to residential customers.
“We did not pass legislation to create a program that exists in name only,” a group of pro-solar state senators wrote in a letter to the commission. “(The shared solar program) has to be done with the basic assumption that the program is supposed to work. A competitive shared solar program is a new and exciting frontier for Virginia, and we encourage industry and advocates to give serious consideration to the information it provides about success in other markets.
Dominion argued that the higher payment was intended to compensate for the “cost shift” that non-participants would receive as a result of the program. The company has not yet provided evidence of how much non-participating costs will change.
The “cost shift” argument is standard in the monopoly utility playbook for eliminating distributed solar projects and third-party involvement in their areas. Read about California’s fight against the cost-shifting argument and the exposure of its false assumptions here.
“It is correct that the record does not show evidence indicating exactly what cost changes would occur under Dominion’s proposed minimum bill or other proposed minimum bills,” SCC Hearing Examiner Mathias Roussy wrote.
Although not yet installed, the most notable project in the state is among the largest solar installations in the world. The Randolph Solar project is an 800 MW renewable energy titan with an estimated cost of over $800 million. This July, Charlotte County, Virginia officials voted to grant a conditional use permit to SolUnesco’s planned 21,000-acre project in the southern part of the county.
Construction is scheduled for the second quarter of 2025 and could take up to 2 years for a crew of 700 workers to complete. The project is expected to generate $311 million in revenue to the county over its planned 35-year life. Even if the permit is granted, SolUnesco still needs approval from the State Corporations Commission, which it expects in 2024 after the company has completed environmental impact studies as well as other pre-construction site and viability assessments.
Solar power is an increasingly important part of Virginia’s grid. As of Q1 2022, the Solar Energy Industries Association (SEIA) says the state has installed about 3.8 GW of solar capacity. This would rank 10th in the country in terms of placement. In 2021, it took the 4th place in the country in terms of utility-scale projects.
The state has 179 solar companies, nearly 5,000 jobs and has invested more than $4 billion in solar technology to date, according to SEIA. The state has 28,095 solar projects installed, and SEIA projects another 4.1 GW will be installed over the next five years.
Virginia currently has enough solar energy to power more than 427,000 homes, which is on track to have 3.6 million homes powered by renewable energy by 2050.
Our last stop on the US pv magazine 50 state solar tour took us to West Virginia, and next we’ll head to North Carolina, another east coast solar leader.
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