Solar Incentives in US States: Virginia

From pv magazine United States

In the past three years, Virginia has pivoted its energy policy, focusing squarely on solar and wind power development. The Department of Environmental Quality has set a target of 5.5 GW of renewable energy, of which at least 3 GW should be under development by 2022. In the past two years, the state has deployed gigawatts of solar power capacity, which has dwarfed the previous years.

Virginia is targeting 30% renewable energy by 2030 and 100% by 2050. Although much of the construction has been done at utility scale, the state also has significant incentives for solar power and energy storage to residential and commercial level.

incentives
Virginia employs a traditional net metering program, which means a solar customer will receive a credit on their bill for any excess electricity sent to the grid. All residential customers with systems less than 20 kW receive a full retail rate. Non-residential projects can receive retail net metering up to 1 MW, and agricultural customers up to 500 kW.

Virginia, like many states, also has a property tax exemption for solar energy. Although the price of a home is likely to increase after solar is installed, according to Zillow an average of 4%, property taxes will not be calculated on that increase in value. Earlier this year, the residential property tax exemption increased the size of its system to 25 kw.

In 2020, the Virginia Clean Economy Act was passed, which requires the state, through a renewable portfolio standard, to have at least 1% of its energy come from solar resources. To encourage this, the state created a Solar Renewable Energy Credits (SREC) program. For every megawatt-hour produced by a system, a credit is allocated to a solar customer. Virginia SRECs are currently valued at about $50 a month, with the maximum price being $75.

Virginia’s Clean Economy Act was a big step in the state’s energy transition. It is expected to create up to 13,000 jobs a year, produce nearly $70 billion in net benefits for residents, and generate up to $3,500 in savings for each household over the next 30 years. He also capped electricity bills, closed loopholes for energy monopolies, and added energy efficiency programs for underserved communities.

Federal incentives will further drive the value of solar power to Virginians. The investment tax credit has recently been extended for the next decade by 30%. The credit also applies to battery energy storage.

Shared plot?
Another policy development this year that solar advocates ran into trouble with was the establishment of a minimum “shared solar” bill of $55 a month. Solar sharing, similar to community solar, allows customers to contract for a portion of external solar generation when rooftop solar is not an appropriate option. The $55 minimum bill is the highest in the country by a long shot.

The approved legislation also establishes the rate of bill credits under the program. Customers receive $0.11765/kWh; however, Dominion Energy customers pay more than $0.124/kWh for traditional electricity, and rates continue to rise. Shared or community solar programs generally offer savings on the bill or at least price parity with the market, but in this program, the economics are not particularly attractive to residential customers.

“We have not passed legislation to create a program that exists in name only,” a group of pro-solar state senators wrote in a letter to the committee. “(The solar energy sharing program) must be implemented on the basis that the program has to work. A competitive shared solar program is an exciting new frontier for Virginia, and we recommend that input from the industry and from solar advocates be carefully considered regarding what has been successful in other markets.”

Dominion argued that the high fee is designed to offset the “change in costs” that non-participants would receive as a result of the program. The company has not yet provided evidence of the magnitude of cost shifting that non-participants would bear.

The “cost shifting” argument is common in the playbook of utility monopolies to stifle distributed solar projects and third-party participation in their territories. Read about California’s struggle with the cost shifting argument and a debunking of its false assumptions here.

“It is true that the record does not include evidence specifying exactly what cost shifting would occur under Dominion’s minimum bill proposal, or any of the other minimum bill proposals,” wrote SCC hearing examiner Mathias Roussy. .

remarkable project
Though not yet installed, the state’s most notable project ranks among the largest solar installations in the world. The Randolph Solar project is an 800 MW renewable energy production titan with an estimated value of over $800 million. This July, the authorities of the county of Charlotte (Virginia) have voted to grant a conditional use permit to the project planned by SolUnesco, which will be developed on an area of ​​21,000 acres in the southern part of the county.

Construction is scheduled for the second quarter of 2025 and can take up to two years for a crew of 700 workers. The project is expected to generate $311 million in revenue for the county over its anticipated 35-year lifespan. Although the permit has been granted, SolUnesco still needs the approval of the State Corporation Commission, which the company expects in 2024, after having carried out environmental impact studies, as well as other pre-construction site and feasibility assessments. .

Deployment
Solar power is an increasingly important part of Virginia’s grid. Through the first quarter of 2022, the Solar Energy Industries Association (SEIA) reports that the state has deployed some 3.8 GW of solar capacity. This would place it 10th in the country in terms of deployment. In 2021 it ranked fourth in the country, driven by utility-scale projects.

The state is home to 179 solar companies, nearly 5,000 jobs, and has invested more than $4 billion in solar technology to date, according to the SEIA. There are 28,095 solar projects installed in the state, and the SEIA expects another 4.1 GW to be installed in the next five years.

There is now enough solar energy to power more than 427,000 homes in Virginia, reaching the goal of having all 3.6 million homes powered by renewable energy by 2050.