Two Virginia lawmakers are seeking to expand the availability of shared solar in Virginia, including by introducing it to Appalachian Power customers.
A shared-solar program, also sometimes called community solar, allows a customer to buy electricity from a solar company and receive credit for it on their electric bill, even if they don’t have panels of their own for reasons such as being unable to afford them, living in a neighborhood with lots of shade or living in an apartment.
Advocates promote shared solar as a way for electricity customers to save money and access solar energy, but electric utilities have expressed concerns about non-participating customers picking up the cost of those savings.
“What I liked about community solar,” Sen. Scott Surovell, D-Fairfax County, said in an interview Friday, “was that in a perfect world, I would love to be able to go install solar panels on the roof of my home or the roof of my building where my law firm leases space.
“But at my home, the tree canopy is too heavy, and I’m not interested in cutting down a bunch of 100-year-old oak trees. At my law firm, we just signed a three-year lease and I’m not going to make a 20-year investment in solar panels when we’ve only got a three-year lease on the roof. … Community solar allows people and businesses who feel very strongly about using renewable energy in their home or their business, it gives them that option when they’re physically not capable of doing it.”
Del. Richard “Rip” Sullivan Jr., D-Fairfax County, noted that all of the solar generation capacity in Dominion Energy’s pilot shared-solar program, which was established by the Virginia General Assembly in 2020, has been awarded to various developers.
“The shared-solar program is working remarkably well — so well that it’s actually full,” Sullivan said during a press conference Friday hosted by the grassroots civic engagement organization Network NOVA and featuring multiple legislators speaking on a variety of topics.
Appalachian Power, the state’s second-largest utility behind Dominion, does not have a shared-solar program, nor does Old Dominion Power, a subsidiary of Kentucky Utilities that serves far Southwest Virginia.
[Disclosure: Dominion is one of our donors, but donors have no say in news decisions; see our policy.]
This year, legislators will consider Sullivan’s House Bill 106 and House Bill 108, and Surovell’s companion legislation Senate Bill 253 and Senate Bill 255.
Each lawmaker is proposing establishing a shared-solar program that would be available to Appalachian Power’s more than 500,000 Virginia customers.
Appalachian customers have seen several price hikes in recent years. A recent SCC report showed their average monthly bills increased around $35 between July 2022 and July 2023, to about $158, and another $16 average monthly increase is set to take effect at the end of this month.
Surovell said Friday that Appalachian Power has a different service territory and customer demographics than Dominion does.
“They can’t have an identical approach,” he said.
Last year, proposed legislation to introduce shared solar to Appalachian customers failed to pass. Asked about this year’s bills, Appalachian spokesperson George Porter said the utility doesn’t publicly comment on active legislation.
“Our position continues to be that Appalachian Power provides renewable energy to all of its customers and continues to seek additional wind and solar energy as we move to a clean energy future,” Porter said.
Besides establishing a shared-solar program for Appalachian customers, the lawmakers propose increasing the size of Dominion’s program — which is currently capped at 150 megawatts with a provision potentially allowing another 50 megawatts — and reducing a monthly minimum amount that Dominion’s shared-solar subscribers must pay.
While similar, the two legislators’ bills have some differences, including that Sullivan’s would set both utilities’ program caps at “at least 10 percent of each utility’s adjusted Virginia peak load,” while Surovell’s bills enumerate a new cap of 450 megawatts for Dominion and a cap of 75 megawatts for Appalachian.
Among the bigger points of contention regarding Dominion’s program has been the minimum monthly bill that subscribers must pay, which the State Corporation Commission set at $55.10 per month in 2022 and which increased to about $62 last year to reflect increased service costs.
“The minimum bill is probably the hardest issue to reach consensus on,” Surovell said.
The SCC’s goal was to ensure that program subscribers continue to pay a “fair share” toward distribution and transmission expenses in order to minimize costs shifted onto customers who don’t participate in shared solar.
This year, Sullivan’s and Surovell’s bills would set the minimum based on “the amount of kilowatt-hours billed by the utility” plus some necessary costs, while keeping the exemptions for low-income customers.
Dominion spokesperson Aaron Ruby said that change would take the monthly minimum for an average customer who uses 1,000 kilowatt-hours of electricity per month, and is subscribed to that much from a shared-solar program, down to about $19.
“This legislation, as written, would allow these companies and their subscribing customers to essentially use the power grid for free and to shift all of the costs of operating the power grid onto all of the other customers who aren’t participating in the program, to the tune of at least $100 million a year,” Ruby said.
Ruby said recovering distribution and transmission costs is necessary because shared-solar customers are still depending on the electrical grid and on the utility for reliable power.
“The cost of operating the grid doesn’t disappear when you subscribe to a program like this,” Ruby said.
Increasing the capacity of Dominion’s shared-solar program, he said, would only further amplify the utility’s concerns about who pays to support power distribution and transmission.
“The more subscribers, the more cost-shifting onto customers who aren’t subscribing,” Ruby said.
Among the utility’s other concerns about the shared-solar program, Ruby said, is that the legislation as filed would allow solar developers to sell electricity in Virginia without the same SCC regulation of their expenses, prices, and profit margins under which Dominion and Appalachian Power operate.
“This legislation would exempt these solar providers from any of that oversight and any of those obligations that regulated utilities have,” he said.
Proponents of expanding access to Dominion’s shared-solar program say Dominion’s monthly minimum is among the highest in the country and makes the program effective only for low-income customers, who are exempt from the requirement.
“You have a significant chunk of would-be participants who are taken out of the market,” said Greg Habeeb, president of Gentry Locke Consulting and a lobbyist for Atlanta-based solar developer Dimension Renewable Energy.
Dimension has 14 Virginia shared-solar projects at various stages in the approval and construction process — including a 5-megawatt facility recently completed in Waynesboro and a 3.125-megawatt facility planned for South Boston — and focuses on serving low-income customers.
Its projects are among more than 45 shared-solar facilities that have been awarded a portion of Dominion Energy’s program capacity or are on a wait list. Of the 12 Dimension projects that have been awarded capacity, half are expected to be operational by this spring, said Brandon Smithwood, Dimension’s senior director of policy.
Smithwood said if a shared-solar program were established in Appalachian Power territory, the company would be interested in pursuing projects there.
Dimension is among more than 70 entities that have filed for licensure under the shared-solar program, according to the SCC.
Smithwood said he estimates his company’s low-income customers will save approximately 10% on their electric bills, but the savings are only viable because those customers are exempt from the minimum requirement.
“We think that this is a scalable program for low-income Virginians, but if the state wants to diversify it, then the minimum bill needs to change,” Smithwood said.
He pointed to a November 2023 study, prepared by Montreal-based Dunsky Energy + Climate Advisors for the Coalition for Community Solar Access, which says Dominion’s shared-solar subscribers are being undercompensated for participating in the program.
The Coalition for Community Solar Access is a national trade association representing more than 100 solar companies, businesses and nonprofits.
The study says shared solar benefits utilities not just by reducing how much energy they must generate but also by reducing how much money they must invest in the distribution and transmission of electricity.
It concludes by predicting that if shared solar were extended into Appalachian Power territory and expanded to 2,000 megawatts between Appalachian and Dominion, the minimum bill could be reduced by 80% and still provide $365 million in benefits to the utilities between 2024 and 2050.
As the SCC considered the monthly minimum in 2022, Dominion sought a higher amount that would vary based on usage but would come to approximately $74 for an average customer’s usage of 1,000 kilowatt-hours per month. The Coalition for Community Solar Access and others sought a fixed minimum of $7.58.
After a state regulator recommended the $55.10 figure in early 2022, Sullivan, Surovell, and state Sen. Emmett Hanger Jr., R-Augusta County, wrote the SCC a letter saying that such a high amount would hamper the success of the shared-solar program in Virginia.
“The minimum bill is required to help alleviate potential cost shifts associated with the shared solar program but should be implemented with an underlying assumption that the program needs to work,” the lawmakers wrote, noting that “we did not pass legislation to create a program that exists in name only.”
Surovell said Friday that he thinks that when the SCC set out to determine what was in the public’s best interest as it considered where to set the minimum bill, it focused primarily on costs.
“They were not able to account for things like improvements to grid infrastructure, improvements to reliability, the benefits of a more distributed energy generation network or the reduced societal costs associated with clean energy,” he said. “From my perspective, all of those things have quantifiable benefits that should have been taken into account with the minimum bill, but the SCC didn’t do it.”
This year’s General Assembly features Democratic majorities in both the House of Delegates and the state Senate, while Republican Gov. Glenn Youngkin holds the veto pen.
Smithwood said he thinks expanding shared solar will have bipartisan support.
It will help Virginia equitably meet its clean energy goals, which is important to Democrats, Smithwood said. Meanwhile, increasing access to shared solar is part of Youngkin’s “all of the above” energy plan.
Furthermore, shared-solar facilities generally are smaller than the larger solar facilities that have drawn pushback in some counties.
“This is a farmer’s back 40, not 1,000 acres,” Smithwood said.
Ruby, of Dominion Energy, said the utility has been engaged in conversations with lawmakers about its concerns regarding the legislation as it was filed.
“We’re having a good dialogue with the sponsors,” he said.