Advocates of distributed solar energy in Virginia are watching nervously this summer as electric utilities and the solar industry negotiate the future of net metering, the policy that makes rooftop solar economically viable in a state with no other incentives.
Virginia utilities finally see the value of solar to themselves, which is good news for the solar businesses that build large projects. But the utilities’ enthusiasm does not extend to solar owned by their customers. Dominion Energy Virginia and its fellows see rooftop solar as a threat to their monopoly power that needs to be curtailed, not a contribution to our energy security that they should encourage. But by attacking net metering, they endanger the many small businesses whose bread-and-butter comes from the residential and commercial sector.
The utilities’ own solar plans are fairly modest compared to national trends, but they are practically revolutionary for a state with deep ties to fossil fuels. Dominion Energy Virginia proposes to add 240 MW of solar annually, presumably in addition to projects supplying corporate customers like Amazon. Appalachian Power is looking to add 25 MW of solar in Virginia or West Virginia by the end of 2019. Old Dominion Electric Cooperative (ODEC), which serves most of Virginia’s rural electric cooperatives, announced contracts for two projects totaling 30 MW. (Dominion Energy immediately bought the projects.)
All this activity has helped to fuel a rapid rise in the number of solar jobs in Virginia. (In case you missed it, solar employs more Virginians than coal.) But utility projects represent only part of the potential market in Virginia, especially if residents and businesses are encouraged to invest in solar themselves.
The utilities’ hostility to customers generating their own electricity has led to barriers that hold back the market for distributed solar. These barriers include limits on system sizes, standby charges, program caps and challenges to third-party power purchase agreements (PPAs). (For a full discussion of these barriers, see my 2017 guide to Virginia wind and solar policy.)
Utilities would particularly like to do away with net metering, a program that allows solar owners to feed excess solar power to the grid during the day and then draw power from the grid when the sun isn’t shining, paying only for the net of the power drawn from the grid. Utilities say net metering results in solar owners not paying their fair share of grid upkeep. Solar advocates say everyone benefits when customers invest in solar.
“Value of solar” studies from other states largely support the advocates’ contention that solar owners provide more value to the grid and to their fellow customers than they get in return. Three years ago the Virginia Department of Environmental Quality facilitated the beginnings of a value of solar analysis for Virginia, but the utilities walked away when they didn’t like where it was headed. Without this kind of valuation, utilities and advocates are left talking past each other.
The future of net metering is now a subject for discussion by the Rubin Group, an informal, by-invitation-only committee formed by the utilities and solar industry members in 2016. The project is named for its moderator, Mark Rubin. Although barely a year old and lacking full stakeholder representation, the Rubin Group has achieved almost a quasi-legislative status with the blessing of the chairmen of the House and Senate Commerce and Labor Committees. Last year these committees passed only solar bills that had been negotiated through the Rubin Group (or in one case, that the House chairman himself had introduced), and committee members were discouraged from offering amendments.
But the Group’s lack of transparency and limited input was a mistake, Rubin has since acknowledged. This year the Group expanded to include the Southern Environmental Law Center (SELC) and the Virginia Manufacturer’s Association. In addition, outsiders have been invited to participate in occasional conference calls and meetings.
At the first such meeting in June, Rubin said the Group would work on four other topics besides net metering: implementation of last year’s “community solar” legislation; addressing barriers to large utility-scale projects; meeting the needs of corporate purchasers; and land use issues.
But net metering was the hot-button concern, with most of the attendees urging action to expand opportunities for rooftop solar and remove current limits on net metering. By contrast, utility interests expressed a desire for “alternatives.”
A second stakeholder meeting in July further increased advocates’ concern. Participants report Rubin began the discussion of net metering by saying the Group believed “net metering as it is now operating in Virginia is unsustainable.” Such an assertion prejudges the issue, says Aaron Sutch of VA-SUN, and implies the existence of supporting data that the utilities simply don’t have. “Nearly every every study shows that net metered solar benefits all users of the electric grid by providing power when and where it’s needed most.”
In fact, he pointed out to Rubin in a later email, a 2016 Navigant study commissioned by Dominion “concludes that up to 2,000 MW of distributed solar can be integrated into the [Virginia] grid without major upgrades or system-wide issues,” and with cost savings to ratepayers of $75 per MWh.
Sierra Club volunteer Susan Stillman, who runs the Solarize program for the Town of Vienna, also wrote to the Rubin Group to express her concern that the entire discussion seems to be focused on limiting net metering as a way to discourage distributed solar. “No one ever said what aspect of net metering is not sustainable. How do you solve a problem that you’ve not defined? Net metered solar in Virginia is minuscule so I’m hard pressed to understand that this is a technical issue and that the grid is being harmed.”
Virginia law caps net metered solar at 1% of a utility’s overall electric utility sales. There is no website to tell the public how much net metered solar currently exists—which in itself is a problem—but industry members say we are nowhere near the 1% limit today.
Stillman says net metering is critical to keeping the program simple enough for the average homeowner to understand. “The calculation that every prospective solar customer makes is ‘when will my system be paid off?’ Solar companies know how to approximate this payoff now to a reasonable level of accuracy, and net metering helps with this calculation. When you change net metering so that customers don’t get full retail, a whole new level of FUD (fear, uncertainty and doubt) is introduced making prospective solar customers more uncomfortable and less likely to move forward with the purchase.”
Sutch and Stillman are members of the Virginia Distributed Solar Alliance, a group of solar industry members and advocates who are seeking to expand opportunities for residents and businesses to install solar. Alliance members have made protecting and expanding net metering their top priority this year. Unfortunately, they were not offered a seat at the Rubin Group table.
The Rubin Group is supposed to act only by consensus, and at least two of the members say they are committed to protecting the interests of the distributed solar community. SELC attorney Will Cleveland and Scott Thomasson of the advocacy group Vote Solar, who is also a board member of the solar industry trade group MDV-SEIA, have both said they disagreed with Rubin’s characterization of net metering as unsustainable. Indeed, says Cleveland, the problem with the net metering law is that it is too restrictive.
Utilities like Dominion Energy are used to getting what they want, and no doubt they see the Rubin Group as one more way to achieve their aims. But they’ve been doing very well with it. Last year the Rubin Group helped them expand their ability to build more utility scale solar at lower cost to themselves, for which they gave up nothing in return. This year, the Rubin Group is trying to help them some more through the work of the other subgroups. It seems reasonable that in exchange for all this help, they should return the favor and give small solar companies a chance to expand their businesses, too.
That DG solar advocacy coalitions have re-formed every year in Virginia is perhaps an appropriate reflection of the hive-mind–in the positive sense of Collective Intelligence–that is distributed generation.
This is my open letter to the good folks working on this year’s incarnation of Virginia DG solar advocacy coalitions.
First, to clarify and articulate the net metering policy challenges. Solar DG advocates must be prepared well in advance to respond to attacks on the entire net-metering framework:
Net Metering in Virginia – Current Framework
• 1:1 net metering at retail – up to 20 kW
• Project caps
o Agric. – 500kW
o Non-res – 1MW
• Program cap – annual consumption 1% peak demand
• Project cap limit from 100% prior year’s electricity use
• Stand-by charges – between 10-20kW
The utilities, like most organizations, will keep their legislative strategies concealed until the time is right–usually, when the bill is filed or amendment revealed by the legislator. Since, as Susan so rightly points out, they won’t tip their hand, pro-solar advocates must be prepared to counter a full range of limits on Virginia’s current net-metering framework (see below).
Solar DG advocates need to organize well in advance of January, with a strong coalition, well-articulated messaging and robust legal grounding–we can be sure the utilities are doing this on their part. The hard work of developing and articulating a sound list of policy priorities should be finished by ~Labor Day.
Finding national allies to help develop robust legal strategies will be a challenge for the following reasons: The trend for solar in Virginia has been utility-scale, not DG/net metered, so utilty-scale is where the moneyed interests lie. Within net-metered, the PPA interests have not gained sufficient traction to attract national players. For residential customer-owned, with the VA-Sun, Solarize, and LEAP programs: Are the national offices of these organizations being tapped for their legal chops? Vote Solar is working more closely with Virginia (though we remain invisible in all their communications), but they, too, must allocate scarce resources, and Virginia’s lack of an effective SREC market (aka, “solar doesn’t work in Virginia” ugh) leaves us struggling to get that flywheel turning….
“Commercial” (non-res) DG has enormous potential but not a lot of base right now. Who can best message to legislators the importance of commercial DG, and not to take actions that would strangle the infant in its cradle, as it were? (I still like Debbie Dooley’s principles of property rights and independence from monopoly utilities, but I had my paws slapped before, noting our moderate Republican friends are allergic to tea!!) Someone on the list-serve recently collected names of businesses that had installed solar; that list can be mined for strategic alliances.
Will MDV-SEIA in the Rubin group give strong representation to DG? The biggest Virginia DG developers–especially with roles on the MDV-SEIA board–are best suited to ensuring that essential role of MDV-SEIA is carried out, during preparation and during legislative session.
We know that national organizations such as ALEC are attacking “basic 1:1 net metering”. I believe 1:1 net metering to be most at risk – and to have the most risk to damage the nascent DG solar ascent in the Commonwealth.
Not to be superficial based on the events of the past week, but, if you care about solar in Virginia, I see dark clouds on the horizon…
Okay as a small solar company I am going to do some whining
These are the 3 things that my company face
1) Suniva and Solar World trade dispute
2) VA Sun Solarize, while this is a well intended program, the unintended consequences is that it absorbs jobs that we small companies would have and vacuums out future jobs. I have lost 3 jobs to the Upper Piedmont group and it seems like VA Sun is just a salesman for Sigora
3) Now you add net metering on top of this and we are done