Bills could expand shared solar programs in Dominion, Appalachian Power territories

News Room
11 Min Read

Two bills that would expand the public’s access to shared solar in Virginia are awaiting a signature from Republican Gov. Glenn Youngkin.

Shared solar is a program in which solar developers allow people who may be unable to install solar panels on their property to pay a subscription fee to receive energy from their facility. The facilities must generate no more than five megawatts.

The program was created for Dominion Energy customers in 2022 to give property owners whose roofs are unsuitable to hold panels, or who reside on lots that don’t garner enough sunlight to produce electricity, the option of using renewable energy.

But the program was limited to just 150 megawatts of electricity and required a minimum bill charge to cover the costs for distribution and transmission services; low-income subscribers were exempt from paying.

As a result, two years since the program was created, only low-income subscribers have signed up for the program.

This year’s bills would increase the number of projects allowable under the shared solar program in Dominion territory, and also add measures that could lower the minimum charge. A separate bill would create a shared solar program in Appalachian Power Company territory throughout Southwest Virginia.

Del. Rip Sullivan, who carried this year’s bill to change the Dominion program, said the initial iteration of the shared solar program brought “ solar developers who were not in Virginia into Virginia,” which created job and improved access to renewable energy sources in the state. Sen. Scott Surovell, D-Fairfax, carried the companion to Sullivan’s bill, and the measure to start Appalachian Power’s program.

In his 2022 energy plan, Youngkin called for removing barriers to smaller solar projects being spread throughout the grid, “including shared solar.”

“The Governor is closely reviewing the legislation and budget language sent to his desk,” Youngkin spokesman Christian Martinez said. “As stated in the All-American, All-of-the-Above Energy Plan, he believes in commonsense energy policy, including flexibility in our laws and regulations to meet the accelerated energy demands of Virginians and foster innovative energy solutions.”

‘Incremental progress’

According to filings with Dominion’s regulators at the State Corporation Commission, Dominion’s shared solar program reached capacity in May of last year.

The commission is allowed to expand the program by an additional 50 megawatts, once determining at least 30% of them, or 45 megawatts, have been claimed by low-income customers. But a case with regulators to decide that expansion is still pending.

Originally, this year’s bills would have expanded the program to allow for far more megawatts equal to 10% of Dominion’s peak load, but they were scaled back, allowing the program to increase to 200 megawatts. There’s also an opportunity for an additional energy boost.

Once they determine that customers have subscribed to 90% of that 200 megawatts, the commission can expand the program by an additional 150 megawatts, according to the legislation, with up to half of that expansion serving low-income customers.

“Where we ended up, we view it as incremental progress to continuing to move the market forward,” said Charlie Coggeshall, mid-atlantic regional director of the Coalition for Community Solar Access, a group that advocates for shared solar use. “It was a lot of negotiating to find a place where we were comfortable. It says a lot that we achieved a major compromise.”

The other change the bill would bring to the Dominion program is language that orders the SCC to “calculate the benefits of shared solar to the electric grid and to the Commonwealth and deduct such benefits from other costs,” to determine the minimum bill.

As it stands now, the minimum bill — typically $55.10 — is necessary, Dominion says, to cover the cost of the grid’s distribution and transmission services to deliver electricity from the shared solar facilities that may be miles away from the user.

Without the minimum bill, the shared solar subscribers see reductions in their bill from using renewable energy while other customers pay to maintain the grid, the utility has argued.

But that typical $55.10 amount is a barrier to people subscribing to shared solar since it will negate any possible energy savings, said Southern Environmental Law Center staff attorney Josephus Allmond, unless affluent people have the means for it, which is “certainly not the majority of Virginians.”

The bill also includes language to conduct an analysis of other benefits, including the renewable energy credits, or RECs, that the solar project developers will have to give to Dominion, which must purchase them to meet renewable energy portfolio standards in the Virginia Clean Economy Act.

A report from CSSA released ahead of the session found that the utility and ratepayers could see savings from an expanded shared solar program, in part, by reducing the need to build new generation sources.

“Also, solar energy produces few externalities like cancer, pollution, climate change,” Surovell said. “All those benefits need to be calculated into reducing the minimum bill.”

Though the bill passed out of the legislature, some opposition came from some lawmakers, like Sen. Mark Obenshain, R-Rockingham, who argued the new minimum bill calculation is “still shifting to the rate base benefits that are just impossible to quantify,” such as climate change.

Katharine Bond, Dominion vice president for public policy & state affairs, said in testimony on earlier versions of the bill the utility had a concern over seeing the projects in the first trench of the program getting completed before expanding it. But in a Feb. 9 Senate Commerce and Labor Committee, Bond stated the utility’s support for the bill, noting that the bill had language stating the SCC will determine shared solar participants ”pay their fare share and minimize the cost shift to non-participating customers.”

A workgroup to determine the amount and form of incentives for shared solar projects that can be built on rooftops, or on previously disturbed lands like former coal mines called brownfields is another provision that emerged this session. Bills separate from Sullivan and Surovell’s that would expand those incentives are now awaiting signature from the governor.

“We think these small projects are just what we should be looking at more to preserve prime farmland and forestland,” said Allmond in committee testimony.

A new Appalachian Power program

The separate bill from Surovell creates an entirely new program for Appalachian Power Company with a cap of 50 megawatts.

Peter Anderson, director of state energy policy at the environmental nonprofit Appalachian Voices, echoed sentiments similar to Coggeshall in response to the bill’s passage.

“People in Southwest Virginia have already waited too long for access to shared solar, and the establishment of a program will provide proof of concept and something to build on,” Anderson said.

There will be a minimum bill in the Appalachian Power program, the amount of which the SCC will have to determine as it does with the Dominion program ,while including the new calculations. But one difference with the APCo program is that low-income customers are not exempt from that cost and will instead receive a 10% discount.

“We would have preferred a larger program and a minimum bill exemption in the new APCo program to really signal that every Virginian can benefit from these smaller, distributed solar facilities,” Anderson said. His group is aware of a number of APCo customers who are interested in the program, he said, as well as at least one nonprofit that will consider a subscription and local governments who have spoken up about the program.

Without the low-income exemption, Coggeshall said, “it just places all pressure on the minimum bill proceeding” to determine if subscribing is a viable option for participants, but his group is still excited by the progress.

Appalachian Power is “pleased” with the bill, utility spokeswoman Teresa Hall stated, adding the cost shifting was a concern for the company.

“The minimum bill is critical to ensure that shared solar participants pay for their share of the grid, so that these costs aren’t shifted to other ratepayers,” said Hall. “Ultimately, if the costs of clean energy initiatives aren’t fairly distributed we will not be able to achieve our goals.”

Virginia Mercury is part of States Newsroom, a nonprofit news network supported by grants and a coalition of donors as a 501c(3) public charity. Virginia Mercury maintains editorial independence. Contact Editor Samantha Willis for questions: [email protected]. Follow Virginia Mercury on Facebook and Twitter.

Share This Article
Leave a comment

Leave a Reply

Your email address will not be published. Required fields are marked *