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Virginia House Dem Leader David Toscano: Solar Power Continues To Grow in Virginia

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From Virginia House Democratic Leader David Toscano:

 

Solar Power Continues To Grow in Virginia

December 10, 2016

Dominion Power just announced a major expansion of solar generation in Virginia. This announcement comes on the heels of several other significant developments in the field. Partnering with the University of Virginia and the Darden School of Business, Dominion will construct a 21-megawatt project (dubbed the Hollyfield Solar Project) in King William County; the University will purchase all of the power generated. In mid-November, Dominion announced plans to acquire four 20-megawatt projects from Virginia Solar LLC, and one 100-megawatt project from Community Energy Solar; they will develop these facilities in Buckingham, New Kent, Powhatan, Southampton, and Sussex Counties. These acquisitions were prompted largely by the demands of Amazon Web Services that the company be able to purchase more electricity from renewable resources. Dominion’s alliance with Amazon will include the two largest solar farms in the mid-Atlantic.
Solar in Our Community

Locally, Albemarle County Schools recently dedicated a solar project built by Secure Futures, LLC, that will generate 1.1 megawatts per year from panels installed at six schools, about 22 percent of the schools’ energy requirements. Dominion announced a partnership with  the University of Virginia through the company’s Solar Partnership Program, an initiative modeled on a bill of mine that passed several sessions ago (HB 1686) to install arrays owned by the utility on the roofs of Ruffner Hall and the University Bookstore. Dominion will lease the rooftops from UVA. It is estimated that the total kilowatts generated would produce energy at peak output to power 91 homes.

Demand for Solar Brightens
Although Virginia lags behind many other states in renewable energy development, these new projects indicate that the market for renewables continues to expand as more consumers demand clean energy for their homes, and companies and new businesses locating here help push solar. More players have entered the market, including several member-owned electric co-ops, who see benefits in solar. When municipalities, large institutions like UVA, and large companies (such as Microsoft, Amazon, Walmart, and Ikea) demand more renewable energy, the market responds. And, as the market responds, the costs of building solar and wind rapidly decline.  Independent of Trump’s election, the economic prospects for coal as an energy source grow dimmer by the day as the disruptive technology of renewables takes the market by storm.

As of January 2014, there were approximately 18 megawatts of installed solar energy generation in the entire Commonwealth; as of mid-October 2015, there were nearly 800 megawatts of projects under development in Virginia.

While these announcements show that the industry gets stronger with each day, we have a long way to go. Virginia still lags behind the majority of states, and we must change statewide policies to encourage solar development, especially larger installations.

For more information about the development of solar in Virginia and across the country, please review my recent post entitled “Give Me the Warm Power of the Sun.”
Legislation Needed to Power Solar Development
In the upcoming General Assembly session, expect to see numerous proposals designed to spur more solar in Virginia. Despite the rhetoric of restoring coal as an energy source, the sheer economics are increasingly problematic. Dominion will not likely build any new coal-fired plants and the costs of solar will continue to drop.

The question for Virginia, then, is how far are we willing to go?  Outside of residential use, solar expansion will likely focus on building larger facilities that simply generate “green” electrons and send them directly to the grid (some call this “utility scale solar”). Those electrons are mixed with electrons generated from gas and coal-fired plants and are then delivered, in an undifferentiated form, to consumers. In this model, consumers have no way of knowing whether their electrons come from a “green” source. But there are other alternatives to consider, including what some call “distributed power.” In this model, the solar energy is first consumed by the generating facility itself “behind the meter,” with the balance then sold off to the utility and placed onto the grid. This model may not be as profitable to the utilities, but it definitely is more economical and empowering for the generator, whether that is the local Walmart or a group of farmers with solar panels on their property. This approach recognizes the principle that each energy consumer should be able to control its choice of electrons and how they are generated to power their homes and institutions. In the long term, giving consumers more choice and control by removing the regulatory barriers that discourage them from generating and consuming their own power will allow the private market to work better while encouraging more solar in Virginia. At present, there are caps imposed on the use of “net metering,” the process by which a customer-generator, such as a homeowner, is paid for electricity generated over and above what the customer uses. There are also restrictions on the use of Power Purchase Agreements, arrangements by which a consumer could contract with a solar developer (not a utility) to build a solar array and then consume and/or sell energy to utilities.

For solar to truly take hold in Virginia, the legislature will need to remove the impediments that presently constrain the market. We will see how far policymakers are willing to move when we return to Richmond this January.

  • Elaine Owens

    One of the main drivers behind the increase in solar installations, the Federal Solar Investment Tax Credit, will begin to sunset in 2019. Right now, that tax credit (which allows individuals and businesses, including utilities, to have a dollar-for-dollar credit against taxes owed) is 30% of the cost of a completed solar installation. In 2020 it drops to 26% and then 22% in 2021. The credit of 22% can still be claimed if construction began in 2021. In 2023 the entire residential tax credit disappears, and the credit for businesses and utilities drops to 10% permanently. I’ll bet there will be quite a battle by the utilities to keep caps on net metering, using the excuse that they provide the grid through which the energy produced flows. It’ll be interesting to see what comes out of the GA, if anything.

  • Quizzical

    Thanks, this is good news and is good for morale.