In 2020, the General Assembly passed legislation creating Virginia’s first shared solar program to enable an option for Virginians to lower their energy costs while creating jobs and establishing a more resilient energy system. The State Corporation Commission (SCC) is responsible for implementing our legislation and issued an order in July that will prevent thousands of Virginians and small businesses from accessing it.
Two-thirds of Americans and most small businesses cannot install rooftop solar panels because they do not own or control their roofs due to leases, homeowners’ association rules or live in neighborhoods with less than adequate sunlight. We passed shared solar legislation because we wanted all Virginians and small businesses to have equal access to clean, cost-saving solar power. The SCC’s July order will prevent that from happening. [Editor’s note: The bill, as passed, wound up applying only to customers in Dominion Energy territory].
Shared solar affords individuals and businesses the freedom to participate in solar programs and cost-savings that otherwise would not be available by allowing subscribers to offset their monthly electricity bills with a portion of output from a small grouping of solar panels. Shared solar projects have a small environmental footprint because they are limited by law to 5 megawatts or around 30 acres, making them easier to permit and less at odds with our rural communities. These projects increase consumer choice, drive economic development, create jobs and grid resiliency.
A 2020 study by VCU’s Center for Urban and Regional Analysis looked at the benefits of growing Virginia’s solar industry, including shared solar and found that the industry would support over 46,000 direct and indirect local jobs and more than $7 billion in total economic impact. Farmers and landowners would benefit from an estimated $30,000 annual lease payment for each five-megawatt project.
Unfortunately, in July, Virginia’s SCC’s final order proposed a punitive “minimum bill” for shared solar subscribers that makes shared solar unworkable for anyone required to pay a minimum bill. It has been challenged because the shared solar law was passed with the intended purpose of establishing program economics comparable to Virginia’ existing rooftop solar net metering rules.
Minimum bills are intended to be fixed to ensure program participants pay their fair share to use and have access to the energy grid. However, the SCC created a fee structure that will penalize shared solar users by charging more than what it costs to simply sustain the grid, and will discourage instead of promote shared solar subscription.
Our intent was to establish a shared solar program that provides all consumers equal opportunity to participate directly in clean energy generated in their communities by third party providers — regardless of their income, where they live, or what type of residence they call home or building in which they operate their business.
Since our bill’s passage, the economy has suffered from record inflation and a global energy crisis with the most recent Consumer Price Index showing electricity prices are up 13.7 percent over last year. Utility gas services are up 38.4 percent and Dominion customers are already seeing a significant increase in their energy bills of approximately $14.93 per 1,000kw of usage due to higher fuel prices and other factors. What’s more concerning is that these are not the only price increases being proposed. Consumers are likely to see even greater price hikes going forward.
Shared solar should be a way for subscribers to save on their energy bills. This is core to shared solar markets in the dozen or so successful competitive markets established outside Virginia.
For example, South Carolina utility regulators rejected Dominion’s price hike of a proposed monthly bill of around $50, which targeted customers with rooftop solar and set a $13.50 monthly minimum bill. I hope our regulators share the same sound judgment.
The SCC’s proposed minimum bill structure will stifle solar developers’ interest in the fledgling Virginia shared solar program before it ever gets off the ground. We cannot let that happen and this tax on the sun needs to be reconsidered either by lawmakers or the SCC.