Everybody talks about bringing solar to low-income households. This guy is doing it (and you can, too).

Photo credit Don Crawford for GiveSolar

Regular readers of this blog know I discourage Virginians from spending their money on so-called green energy offerings from Dominion Energy, Appalachian Power, or REC sellers like Arcadia. They might make you feel better about the electricity you use, but the best products do little to put new solar projects on the grid, and the worst are actually counter-productive

There is a better way to put solar on the grid and salve your conscience, while also cutting out the middleman. Take the money you were going to pay to Dominion Energy for its Green Power Program (or are already paying, if I didn’t warn you off soon enough), and give it to someone who will put actual solar panels on actual houses in Virginia.

That someone might be Jeff Heie, whose non-profit, GiveSolar, works with low-income home-builder Habitat for Humanity in Rockingham County, Virginia to outfit Habitat homes with rooftop solar. The homeowner gets a 4-kilowatt system that cuts their electricity bill by $40; they commit to sending half that amount back to GiveSolar to help pay for the cost of solar on future Habitat homes. 

GiveSolar keeps installation costs down by holding solar “barn-raisings” using volunteers from the community and a solar company, Green Hill Solar, that is willing to install at cost. As a result, a 4-kW system can be installed for $5,000, about half price. 

Eventually GiveSolar expects its Solar Seed Fund to be self-funding as owners of Habitat homes send in their $20 per month repayments, but meanwhile the organization needs donations to get the program up and running. Heie hopes to raise $100,000 to put solar on 20 homes.

It sounds like a lot of money, until you consider that Dominion reports it has 30,000 Virginia customers enrolled in its Green Power Program. If all those customers are currently spending an average of just $5 per month on pointless RECs, and if they sent that money to GiveSolar instead, Heie would raise 150% of his goal every month

Indeed, Heie has plans to take his model to other Habitat for Humanity affiliates around Virginia; he told me he has already heard from five that are interested in installing solar. His approach has also won him the support of other nonprofits, including Solar United Neighbors of Virginia, which is helping to raise $20,000 for the first four projects in Rockingham County and has secured a $10,000 matching grant.

There is a huge need for projects like these. Many low-income Virginia residents spend more than 6 percent of their income on electricity and home heating. Legislators have responded with programs providing funding for low-income energy efficiency programs; capping energy costs for customers who qualify under a percentage-of-income calculation; authorizing Dominion to install solar on some low-income homes (with the utility’s usual profit-margin, and without the barn-raising); and establishing a shared solar program that, if successful, will give some low-income residents the ability to buy electricity from community solar facilities. 

But the potential for rooftop solar to lower energy costs and displace fossil fuels is so huge, and these government programs so limited, that there’s still plenty of room for GiveSolar’s inexpensive, hands-on, and self-sustaining approach. The Habitat homeowners who benefit pay the money back over time, creating a virtuous cycle. Donors don’t have to guess whether their money is building solar projects; they can see it happen, and even take part. Neighbors help neighbors, and by doing so, help the planet.

With a federal windfall incoming, Virginia should require school districts to build to green standards

The solar panels powering Arlington, Virginia’s Discovery Elementary School, seen through the windows of a science classroom. Photo by Ivy Main

More than $4.3 billion in federal stimulus dollars will be flowing to Virginia this year as part of the American Rescue Plan, with cities and counties in line for another $2.7 billion. In a joint statement in May, Governor Northam and Democratic leaders laid out spending priorities that included rehabilitating and upgrading the infrastructure in public schools. The General Assembly plans to meet for a special legislative session in August to allocate the funds. In addition to the federal money, Virginia also finds itself in the happy position of having surplus funds of its own to spend.

As it stands now, the federal funds cannot be used for new school construction, a restriction that upsets school officials in areas with aging schools and no budget to replace them. But whether some money is spent on new schools or not, the General Assembly should not just throw dollars out the door and hope for the best. Virginia has an enormous opportunity to improve student health and learning, correct historic injustices, and meet the demands of the climate crisis, but only if the right standards are in place from the outset.

First, funding should be prioritized to Title 1 schools, which are those with at least 40 percent of children from low-income families. Given Virginia’s history of segregation and racism, a high number of Title 1 schools are in Black communities, while others are in parts of rural Virginia that have been left behind economically.  Title 1 schools on average are older and in worse condition than schools in more affluent areas, and the students are more likely to suffer from asthma and other health problems that are exacerbated by mold and poor indoor air quality. Improving indoor air quality and student well-being should be the primary goals for all new or renovated facilities, and it makes sense to start with the students most in need.

Second, while many localities are attracted to the idea of shiny new schools, in most cases it takes less time and costs less to retrofit an old school that is structurally sound than to tear it down and build new. It’s also better for the environment, even if the new school would be built to a “green” standard. Children don’t need new buildings; they need healthy, high-performing buildings. A beautiful remodel of the historic school their parents and grandparents attended could be just what the doctor ordered.

Third, new or renovated schools should be required to meet the highest standards for energy efficiency, including windows, insulation and HVAC. New construction should also be all-electric, as should most renovated buildings. This maximizes taxpayer savings on energy costs over the lifetime of the building, supports the goal of healthy indoor air, and is consistent with Virginia’s commitment to phase out fossil fuels.

Fourth, if the roof will be new or upgraded, it should be made solar-ready, allowing the school to take advantage of third-party power purchase agreements (PPAs) or solar services agreements to install solar panels. Leveraging private capital to pay for the school’s primary energy source stretches construction dollars. These agreements provide financing for solar facilities at no upfront cost and typically save money for schools from the outset. Once the solar panels are paid off, energy bills plummet and savings pile up.

New schools and deep retrofits can even achieve net-zero status affordably, and ought to be required to do so in most cases. Net-zero schools become a source of community pride and offer educational benefits as students learn about energy and how solar panels work. According to a study conducted for Fairfax County Public Schools, the additional upfront cost of building a net-zero-ready school (one that will produce as much energy as it uses once solar panels are added) is only about 5 percent more than standard construction, and the additional cost is recovered through energy savings in under 10 years. Renovating older schools to net-zero costs 11 percent more, but still pays off in 15 years.

Even if we weren’t worried about climate, these standards would make sense for student health and taxpayer savings. Yet today, school districts are not required to build high performance schools, and most don’t. The result is higher operating costs, and in some cases school boards being told that their brand-new schools won’t support solar. Solar companies say it’s probable that solar would be just fine, but this shouldn’t even be an issue. Yet it will continue to be cited as an obstacle if solar-readiness is not made standard.

Our children deserve better. Virginia should seize this year’s historic opportunity to invest in healthy, high-performing schools that are free of fossil fuels and will deliver long-term benefits for taxpayers and the climate.

The SCC’s vanishing trick: turning shared solar into no solar

Photo courtesy of Department of Energy, via Wikimedia Commons.

With Virginia fully committed to the clean energy transition, you would think that by now, residents would be able to check a box on their utility bill to buy solar energy, or at least be able to call up a third-party solar provider to sell them electricity from solar.

Not so. Sure, if you’re fortunate enough to own your own house or commercial building, and it’s in a sunny location and the roof is sound, you can install solar panels for your own use. Renters, though, are completely out of luck, which means almost all lower and moderate-income people are shut out of the solar market.

Actually, we were all supposed to be able to buy solar by now. A 2017 law required utilities to offer a “community solar” program. Utilities would buy electricity from solar facilities and sell it to customers. At least one electric cooperative followed through, but although Dominion Energy, Virginia’s biggest utility, created a program and had it approved by the SCC in 2018, the company has never offered it.

So this year the General Assembly passed two bills that would finally bring the benefits of solar energy to a broader range of customers. One would be community solar but under a different name. It would let anyone buy electricity from a “shared solar” facility, with at least 30 percent of the output reserved for low-income customers.

The other, the leadoff section of the Solar Freedom legislation, would let residents of apartment buildings and condominiums share the output of a solar array located on the premises or next door.

The bills were narrowed in committee to apply only in Dominion Energy territory (and for the multifamily program, to a part of Southwest Virginia served by Kentucky Utilities). Dominion also lobbied successfully for changes to the shared solar bill that raised red flags with solar industry members and advocates. Dominion has a long history of putting barriers in the way of customers who want solar, and the final language of the shared solar legislation pretty much invited that sort of mischief.

Still, it was left to the State Corporation Commission to write rules implementing the programs, so customers had reason to hope Dominion would not be allowed to make the programs unwieldy and expensive.

Ha. What has emerged from the SCC in the form of proposed rules manages to be both incoherent and everything Dominion wants. The reason for that is clear: most of the rules are copied and pasted from proposals Dominion submitted in August.

Adopting the recommendations of a company that failed to follow through on its own program seems like a bad idea. Hasn’t Dominion abdicated its right to tell other companies how to execute community solar?

And of course, with Dominion writing the rules, the programs won’t work. The shared solar option doesn’t kick in until at least 2023, and customers won’t be told what it will cost them. The SCC proposes to hold an “annual proceeding” to decide each year how much subscribers will have to pay in the form of a minimum bill, an amount that can then change from year to year.

This minimum bill is not the eight or nine dollar fixed charge that all customers pay today; it’s a whole new charge representing various of Dominion’s real or imagined costs of doing business, which Dominion says it needs to recover from the subscribers to compensate it for the fact that some other company is now selling them electricity.

How much might this be? No one knows. And because no one knows, it’s also impossible for solar companies or other third-party providers to offer the program. They can’t sell a product whose price is unknown, and banks aren’t going to loan them money to build a solar facility with no assurance that there will be customers.

There are really only two ways to save this program. The SCC could hold an evidentiary hearing upfront to examine the costs Dominion claims it needs to recover and then decide what the minimum bill ought to be. If that number is so high that the program can’t work, the SCC gets the privilege of telling the General Assembly there won’t be a shared solar program after all.

Alternatively, the SCC can follow the lead of states that already have successful programs and set the minimum bill (upfront) at a level that still saves customers money, so projects have a fighting chance of getting off the ground. If Dominion thinks it is losing money on the deal, that’s a claim it can pursue in its next rate case — which is where the dispute belongs.

Either way, the industry needs clarity, and it needs it now.

Multifamily solar: from straightforward to hopeless

The drafters of Solar Freedom thought they’d avoided the mess that threatens to tank the shared solar program. The multifamily provision of Solar Freedom is simply a way to let residents of apartment buildings and other multifamily units enjoy the same benefits available to homeowners who install solar under the net metering program. Instead of putting solar on a roof they own, they can buy the output of solar panels on the roof of the building where they live. It’s not net metering, but that’s the model.

Since the solar is onsite, none of these projects will be big. Keeping it simple and inexpensive is important. The law provides that utilities will credit participating customers for their share of solar at a rate “set such that the shared solar program results in robust project development and shared solar program access for all customer classes.” More specifically, the commission “shall annually calculate the applicable bill credit rate as the effective retail rate of the customer’s rate class, which shall be inclusive of all supply charges, delivery charges, demand charges, fixed charges and any applicable riders or other charges to the customer.”

The law couldn’t be clearer: there is to be no minimum bill, and the utility cannot load up a customer’s bill with lots of miscellaneous extra charges. All those charges that the SCC loads into the shared solar program’s minimum bill are, for the multifamily program, already included in the retail rate.

End of discussion? Not hardly. The SCC’s implementing rules — which are Dominion’s rules — get around this problem by dumping all the minimum bill elements from the shared solar rules onto the program provider instead (that is, the company that owns the solar panels).

Solar Freedom doesn’t actually allow that, either, so the SCC has decided these costs should be part of the one fee the utility is allowed to collect, for “reasonable costs of administering the program.” Never mind that items like “standby generation and balancing costs” have nothing to do with administering the program.

Oh, and the SCC won’t decide what the administrative charge will be until it holds an annual proceeding. And the amount can change every year. So once again, the SCC has designed a program that no solar company will be able to offer.

The SCC rules are so blatantly contrary to the program mandate set out in Solar Freedom that one can’t help but wonder whose side the SCC is on.

It is certainly not the customers’. We want solar.

The SCC is accepting comments on the proposed rules for both the shared solar and multifamily programs through Monday.

This article originally appeared in the Virginia Mercury on October 30, 2020.

Hurricanes mean power outages. Resilience hubs can help.

Satellite imagery shows Hurricane Isabel in 2003

Hurricane Isabel was one of Virginia’s worst natural disasters–and it was only a category 2 storm when it made landfall in North Carolina. Photo credit NOAA National Environmental Satellite, Data, and Information Service (NESDIS)

The National Oceanic and Atmospheric Administration says this year’s hurricane season could set a record for the number of storms big enough to be given names. NOAA now predicts a total of 19 to 25 named storms (winds of 39 mph or greater) in the Atlantic, of which 7 to 11 are likely to become hurricanes. Isaias, a Category 1 hurricane, was already the ninth named storm of this season.

With global warming heating the ocean and making hurricanes worse, states and localities have to prepare not just for the storms but also for their aftermath, when residents are left without power, sometimes for days.

I still have keen and unpleasant memories of 2003’s Hurricane Isabel, one of Virginia’s deadliest and costliest storms. My family was among the 2 million households who lost power.

For eight days we used a camp lantern for light and cooked outside over fires kindled in a Weber grill. We ate our way through the thawing contents of the freezer, then got creative with canned foods. We have a well with an electric pump, so our water supply consisted of what was in the jugs and pots we filled before the storm hit. And without power for our septic pump, we could not put anything down the drain or flush toilets. (My daughters were just hitting their teen years at the time. You can imagine how well they took this.)

Still, we were lucky. We didn’t need power to run a medical device like an oxygen machine or wheelchair, or to keep medicine refrigerated. Firewood and a grill gave us a cooking option we wouldn’t have had if we lived in an apartment, and we owned plenty of jugs and pots to hold water. Most importantly, if it had gotten bad enough we could have left in our car — something many city dwellers don’t have, especially if they are low-income or elderly.

After Isabel, a lot of my neighbors went out and got generators, buying peace of mind for themselves but underscoring how the wealth gap affects even the ability to weather a storm. Yet in these intervening years, electricity has truly become central to everything Americans do. We get our information over the internet; business happens online; cell phones have replaced landlines. In an emergency, having access to electricity can mean the difference between getting help and having none.

The traditional government response to a hurricane warning is to issue evacuation orders and designate emergency shelters, but experience has shown that a lot of people stay put. Some can’t afford to leave or lack transportation. Others have pets they can’t take with them and won’t leave behind, or they fear looters might take advantage of their absence. Distrust of government probably plays a role, too, making some folks prefer to take their chances with a storm than let people in uniform tell them what to do.

And this year, of course, the pandemic will make people even more hesitant to leave home.

The hurricane hunker-downers, and everyone else left without power after a storm, need access to electricity that doesn’t depend on the grid. There weren’t many options 17 years ago, when Isabel hit. Since then, though, the technological innovations that are transforming our energy supply have also created ways to keep the power flowing that don’t require balky, fuel-dependent generators.

Solar panels on a community center, school or other centrally-located and publicly-accessible building can provide continuous power when the sun is shining; adding batteries allows the panels to keep providing power at night and when the grid is down. Even just a few solar panels can power lights and provide cellphone charging. A larger array will run a refrigerator, microwave, television and coffeemaker. If it is large enough, it can even provide heating and cooling.

A site like this might serve as an emergency shelter for evacuees, or be part of a microgrid that includes nearby critical services such as a police or fire station. But it could be just a neighborhood location where people drop by to charge phones and computers, heat food, get news and see familiar faces. This concept is known as a “resilience hub,” and it’s the sort of modest investment that punches above its weight in community benefits. Good emergency planning should include locating a resilience hub wherever people are most likely to suffer in the aftermath of a storm due to lack of mobility, old age, disability or poverty.

The challenge, of course, is that a resilience hub or microgrid requires an upfront investment. Solar panels pay for themselves over time by reducing electricity bills, but someone still has to front the cost. Legislation passed this year makes that much easier, and local governments are already saving money with solar on public buildings across the state.

The battery is more of a problem. If it simply sits around waiting for a power outage, it won’t earn its keep over the 10-15 years of its useful life. A battery that isn’t providing useful services on a regular basis is also bad for the planet, since batteries have an environmental footprint of their own.

But a battery doesn’t need to sit idle. When it is not being used to provide stored energy in a power outage, the battery could provide a range of benefits to the grid, helping to meet peak demand, integrate renewable energy, and provide frequency regulation and other ancillary services. This is such a valuable service to the grid that in Vermont, utility Green Mountain Power pays for much of the cost of batteries in the homes of customers in exchange for the right to use them.

Virginia has no resilience hubs yet, and the fiscal crisis caused by the pandemic means local governments may not have funding for them. However, the Federal Emergency Management Agency (FEMA) is offering $500 million in grants under a program that looks tailor-made for resilience hubs and microgrids that power critical services and other community needs on an emergency basis.

Our utilities could also play an active role. The recently enacted Virginia Clean Economy Act (VCEA) provides all the authority Dominion Energy Virginia and Appalachian Power need to support solar-plus-storage at neighborhood locations. The law permits the utilities to even own the solar, if they want to, if an array meets a 50-kilowatt minimum size.

More importantly, Dominion and Appalachian can own the batteries, or contract with third parties to be able to use them. The VCEA sets out ambitious energy storage targets that include a “goal of installing at least 10 percent of such energy storage projects behind the meter”—a category that includes most customer-sited storage. The VCEA also allows utilities to select storage projects on a basis other than cost if a project “materially advances non-price criteria, including favoring geographic distribution of generating facilities.”

The State Corporation Commission took comments this summer on how to implement the VCEA’s requirements for energy storage. This is a good opportunity for the SCC to look beyond utility-scale projects that deliver storage services to the grid cheaply, but do nothing to provide backup power when the grid goes down. The SCC should insist utilities include storage at resilience hubs in neighborhoods that are most at risk from storms, and where residents are least likely to have other options when the grid goes down.

That probably won’t be near my house, but I’m okay with help going to the communities where it is most needed. This year’s pandemic has exposed the interconnectedness of our lives in ways that usually lie beneath the surface. Whether it’s a virus, a natural disaster, climate change or acts of injustice, we are really all part of the same community.

This article originally appeared in the Virginia Mercury on August 24, 2020.

COVID-19 throws a lemon at Virginia’s plan for an energy transition. It’s time for lemonade.

solar panels on a school roof

The solar panels on Wilson Middle School are saving money for Augusta County taxpayers. Photo courtesy of Secure Futures.

In mid-March, the Virginia General Assembly passed legislation to transition our economy from fossil fuels to clean energy over the coming years. Two weeks later, Virginia shut down in response to the COVID-19 pandemic. Among the businesses whose very existence is now in peril are the energy efficiency companies and solar installers we will be counting on to get us off fossil fuels.

Home weatherization and energy efficiency programs have come to an almost complete halt in Virginia, including programs run by Dominion Energy Virginia. Nationwide, the energy efficiency sector has lost almost 70,000 jobs. Meanwhile, companies that install solar, especially rooftop systems, report plummeting sales. The Solar Energy Industries Association reports that nationally, 55 percent of solar workers are already laid off or suffering cutbacks.

The timing seems terrible — although to be fair, there’s no good time for an economy-crushing, worldwide pandemic. Eventually, however, the virus will run its course or be defeated through vaccine or cure. At that point, we will face a choice: we can stagger blinking out into the sunlight aimlessly wondering now what?, or we can execute the well-developed plan we have spent these weeks and months formulating.

Let’s go with the second option.

First, it’s worth remembering that nothing happening now will change the trajectory of clean energy. Solar and wind had banner years in 2019, continuing their steady march to dominance. Wind has become the largest single source of electricity in two states, Iowa and Kansas. The island of Kauai in Hawaii is now 56 percent powered by renewable energy, mostly solar. Across the U.S. wind, solar and hydro produce more electricity than coal. Wind is the cheapest form of new electric generation nationally; solar takes pride of place in Virginia.

Meanwhile, fossil fuel is even more firmly on its way out. Six of the top seven U.S. coal companies have gone into bankruptcy since 2015. That was before the lockdown sent energy demand down, further hurting high-priced coal.

Fracked gas helped kill coal but is itself vulnerable to price competition from renewables. Odd as it sounds, the collapse in oil prices will make natural gas more expensive. That’s because oil producers in Texas and North Dakota are closing wells that produced natural gas along with oil. The tightening supply of gas may finally make fracking companies in Appalachia profitable, but it means higher prices for utilities. Wind and solar will just keep looking better.

The Trump administration is still trying futilely to hold back the tide, but the U.S. will get a lot farther riding the wave than struggling against it. Congressional leaders should declare the country “all in” on clean energy. Instead of bailing out the highly polluting fossil fuel industries, they should put that money to work creating more jobs and economic development — and actually doing something about climate change — with energy efficiency and renewables.

Congress should return the Investment Tax Credit for solar (and offshore wind) to the 30 percent level in effect last year and keep it there, instead of continuing the phase-out now in effect. Congress should also give solar owners the option of taking the credit as a cash grant, as it did during the last recession, and for the same reason: tax-based incentives are less useful in a recession, when companies can’t use the credits.

Virginia’s Sens. Tim Kaine and Mark Warner have a critical role to play in convincing their colleagues to support solar. So far neither is rising to the task.

On the state level, Northam did the right thing in signing this year’s energy legislation, allowing utilities and industry members to start planning for the future. But the Clean Economy Act gets wind and solar off to a very slow start; Dominion doesn’t have to build Virginia solar for five years yet. And though the new laws remove many policy constraints on customer-sited solar, they offer next to nothing in the way of financial incentives.

Governor Northam should make it clear he intends to make rooftop solar a priority for next year, along with projects on closed landfills, former coal mine areas, and other brownfields, with a special focus on areas hardest-hit economically. He can also encourage corporations that do business in Virginia to meet their sustainability goals with Virginia wind and solar, starting right now.

The governor should also prioritize building efficiency. Virginia will be adopting a new residential building code this year, and if past years are any indication, its energy efficiency provisions will fall short of the most recent model code standard. It’s up to the governor to make sure Virginia adopts the full code.

Local governments are already taking advantage of suddenly-empty buildings to accelerate maintenance and repairs. But it’s a good time to think bigger, with new financing tools available that make energy efficiency retrofits and solar facilities cash-positive right from the start.

Energy performance contracting allows the energy savings to pay for retrofits. The Department of Mines, Minerals and Energy keeps a list of pre-qualified energy service companies and offers expertise to help local government employees navigate the process.

This year’s legislation also greatly expanded local governments’ ability to finance on-site solar through third-party power purchase agreements, effective July 1. The PPAs are structured so that a school district, municipality or any commercial or non-profit customer can have a solar array installed at no cost, paying just for the energy produced.

In December, Fairfax County awarded contracts for PPAs to install solar on more than a hundred sites, including schools and other government buildings. The county’s contract is “rideable,” which allows other counties and cities to piggyback, getting the same terms without the need for new contract negotiations.

Unfortunately, local governments in southwest Virginia are prevented from pursuing PPAs — not by state legislation, which allows it starting July 1, but by a contract with Appalachian Power that governs their electricity purchases from the utility. The contract is up for renewal this year; disgracefully, APCo is refusing to agree to new terms allowing the localities to use solar PPAs. APCo should back off, and let local governments in economically depressed southwest Virginia start saving money and supporting solar jobs this year.

Arlington County has gone beyond on-site solar, contracting for a share of a large solar farm in southern Virginia that will provide more than 80 percent of the electricity for county government operations. It’s a model any locality can adopt.

Virginia residents and businesses also have good reasons to focus on clean energy. The enforced down-time many people are experiencing means more time to research options, and companies are motivated to offer low prices on energy efficiency upgrades and rooftop solar.

The federal government offers more generous tax credits this year than next. Credits for residential energy efficiency equipment and a deduction for energy efficient commercial buildings expire at the end of this year.

The investment tax credit for solar (as well as for geothermal heat pumps, fuel cells and small wind turbines) stands at 26% for projects placed in operation this year, but it will drop to 22% in 2021. It falls to 10% for commercial customers and disappears altogether for residential customers in 2022. If Congress acts to raise the credit to 30%, buyers will get an even bigger boost. If it doesn’t, there will be a rush this year to get projects done by the end of the year, so customers should secure their place in line now.

Virginia nonprofits have helped hundreds of residents and businesses save money on solar and EV chargers through bulk purchasing programs. Virginia Solar United Neighbors just announced a series of virtual information sessions to promote the Arlington Solar EV Co-op. And LEAP, which closed operations temporarily due to the virus, reports it has restarted two programs, Solarize NOVA and Solarize Piedmont.

In an ideal world, the U.S. would already be well along in executing a comprehensive plan for a clean energy transition, one that includes job retraining for workers, and that resists counterproductive efforts to save the fossil fuel industry. But we can do the next best thing, and use the tools of government, the market and consumer choice to speed us in the right direction.

COVID-19 has handed all of us a big, fat lemon. Let’s make some lemonade.

 

A version of this article appeared originally in the Virginia Mercury on April 30, 2020.

 

With a framework for Virginia’s energy transition in place, here’s what happens next

workers installing solar panels on a roof

One expected effect of the Clean Economy Act will be a boom in solar jobs across Virginia. Photo courtesy of NREL.

With Democrats in charge, Virginia passed a suite of bills that establish a sturdy framework for a transition to renewable energy in the electric sector.

At the center of this transformation are the Clean Economy Act, HB1526/SB851, and the Clean Energy and Community Flood Preparedness Act, HB981/SB1027. Other new laws direct further planning, make it easier for customers to install solar, improve the process for siting wind and solar farms, and expand financing options for energy efficiency and renewable energy.

Gov. Ralph Northam has signed some bills already, and has until April 11 to sign the others or send them back to the General Assembly with proposed amendments. Once signed, legislation takes effect on July 1.

I assume the Governor has other things on his mind right now than asking the General Assembly to tinker further with a bill like the Clean Economy Act, though bill opponents may be using the virus pandemic to argue for delay. That would be a self-defeating move; as the economy restarts, Virginia is going to need the infusion of jobs and investment that come with the build-out of clean energy. And one of the strongest arguments in support of our energy transition, after all, is that it will save money for consumers.

So what happens after July 1? How does this all work? Let’s look at the way these major pieces of legislation will change the energy landscape in Virginia.

Virginia joins RGGI, and CO2 emissions start to fall. 

Virginia’s Department of Environmental Quality has already written the regulations that call for Virginia power plants to reduce emissions by 30 percent by 2030. The mechanism for achieving this involves Virginia trading with the Regional Greenhouse Gas Initiative, a regional carbon cap and trade market.

The regulations have been on hold as the result of a budget amendment passed last year, when Republicans still ruled the General Assembly. After July 1, DEQ will be able to implement the regulations, with the commonwealth participating in carbon allowance auctions as early as the last quarter of this year or the first quarter of 2021.

In addition to joining RGGI, the Clean Energy and Community Flood Preparedness Act also allows the commonwealth to earn money from the allowance auctions. The Department of Housing and Community Development will spend 50 percent of auction proceeds on “low-income efficiency programs, including programs for eligible housing developments.”

The Department of Conservation and Recreation will get 45 percent of the auction proceeds to fund flood preparedness and climate change planning and mitigation through the Virginia Community Flood Preparedness Fund. The last 5 percent of proceeds will cover administrative costs, including those for administering the auctions.

Energy efficiency savings become mandatory, not just something to throw money at.

Two years ago, the Grid Transformation and Security Act required Dominion and Appalachian Power to propose more than a billion dollars in energy efficiency spending over 10 years, but the law didn’t say the programs had to actually be effective in lowering electricity demand.

This year that changed. For the first time, Virginia will have an energy efficiency resource standard (EERS) requiring Dominion to achieve a total of 5 percent electricity savings by 2025 (using 2019 as the baseline); APCo must achieve a total of 2 percent savings. The SCC is charged with setting new targets after 2025. At least 15 percent of the costs must go to programs benefiting low-income, elderly or disabled individuals, or veterans.

The EERS comes on top of the low-income energy efficiency spending funded by RGGI auctions.

Dominion and Appalachian Power ramp up renewables and energy storage. 

The Clean Economy Act requires Dominion to build 16,100 megawatts of onshore wind and solar energy, and APCo to build 600 megawatts. The law also contains one of the strongest energy storage mandates in the country: 2,700 MW for Dominion, 400 MW for Appalachian Power.

Beginning in 2020, Dominion and Appalachian must submit annual plans to the SCC for new wind, solar and storage resources. We’ll have a first look at Dominion’s plans just a month from now: the SCC has told the company to take account of the Clean Economy Act and other new laws when it files its 2020 Integrated Resource Plan on May 1.

The legislation provides a strangely long lead time before the utilities must request approval of specific projects: by the end of 2023 for APCo (the first 200 MW) or 2024 for Dominion (the first 3,000 MW). But the build-out then becomes rapid, and the utilities must issue requests for proposals on at least an annual basis.

In addition to the solar and land-based wind, Dominion now has the green light for up to 3,000 MW of offshore wind from the project it is developing off Virginia Beach, and which it plans to bring online beginning in 2024. All told, the Clean Economy Act proclaims up to 5,200 MW of offshore wind by 2034 to be in the public interest.

Dominion’s plans for new gas plants come to a screeching halt.

Before the 2020 legislative session, Dominion’s Integrated Resource Plan included plans for as many as 14 new gas combustion turbines to be built in pairs beginning in 2022. In December, the company announced plans to build four gas peaking units totaling nearly 1,000 MW, to come online in 2023 and 2024.

But that was then, and this is now. The Clean Economy Act prohibits the SCC from issuing a certificate of convenience and necessity for any carbon-emitting generating plant until at least January 1, 2022, when the secretaries of natural resources and commerce and trade submit a report to the General Assembly “on how to achieve 100 percent carbon-free electric energy generation by 2045 at least cost to ratepayers.”

Even with no further moratorium, Dominion will find it hard to sell the SCC on the need for new gas plants on top of all the renewable energy and energy storage mandated in the Clean Economy Act. Solar and battery storage together do the same job that a gas peaker would have done — but they are required, and the gas peaker is not. Meanwhile, the energy efficiency provisions of the act mean demand should start going down, not up.

Dominion has already signaled that it recognizes the days of new gas plants are largely over. On March 24, Dominion filed a request with the SCC to be excused from considering new fossil fuel and nuclear resources in its upcoming Integrated Resource Plan filing, arguing that “significant build-out of natural gas generation facilities is not currently viable” in light of the new legislation.

Fossil fuel and biomass plants start closing.

By 2024, the Clean Economy Act requires the closure of all Dominion or APCo-owned oil-fueled generating plants in Virginia over 500 MW and all coal units other than Dominion’s Virginia City Hybrid plant in Wise County and the Clover Station that Dominion co-owns with Old Dominion Electric Cooperative.

This mandate is less draconian than it sounds; it forces the closure of just two coal units, both at Dominion’s Chesterfield plant. Other Dominion coal plants in Virginia have already been retired or switched to using gas or biomass, and one additional coal plant in West Virginia lies beyond the reach of the legislation. Oil-fired peaking units at Yorktown and Possum Point were already slated for retirement in 2021 and 2022. APCo owns no coal or biomass plants in Virginia.

Although the exceptions might appear to swallow the rule, the truth is that coal plants are too expensive to survive much longer anyway. One indication of this is a March 24 report Dominion filed with the SCC showing its fuel generation sources for 2019: coal has now fallen to below 8 percent of generation.

By 2028, Dominion’s biomass plants must shut down, another victory for consumers. All other carbon-emitting generating units in Virginia owned by Dominion and APCo must close by 2045, including the Virginia City plant and all the gas plants.

As of 2050, no carbon allowances can be awarded to any generating units that emit carbon dioxide, including those owned by the coops and merchant generators, with an exception for units under 25 MW as well as units bigger than 25 MW (if they are owned by politically well-connected multinational paper companies with highly-paid lobbyists).

Solar on schools and other buildings becomes the new normal.

In December, Fairfax County awarded contracts for the installation of solar on up to 130 county-owned schools and other sites, one of the largest such awards in the nation. Using a financing approach called a third-party power purchase agreement (PPA), the county would get the benefits of solar without having to spend money upfront. The contracts were written to be rideable, meaning other Virginia jurisdictions could piggyback on them to achieve cost savings and lower greenhouse gas emissions.

Fairfax County’s projects, along with others across the state, hit a wall when, on Jan. 7, the SCC announced that the 50 MW program cap for PPAs in Dominion territory had been reached. But with the passage of the Clean Economy Act and Solar Freedom legislation, customers will be able to install up to 1,000 MW worth of solar PPAs in Dominion territory and 40 MW in APCo territory.

Fairfax County schools will soon join their counterparts in at least 10 other jurisdictions across the state that have already installed solar. With the PPA cap no longer a barrier, and several other barriers also removed, local governments will increasingly turn to solar to save money and shrink their carbon footprints.

Virginia agencies start working on decarbonizing the rest of the economy. 

In spite of its name, the Clean Economy Act really only tackles the electric sector, with a little spillover into home weatherization. That still leaves three-quarters of the state’s greenhouse gas emissions to be addressed in transportation, buildings, agriculture and industry. Ridding these sectors of greenhouse gas emissions requires different tools and policies.

Other legislation passed this session starts that planning process. SB94(Favola) and HB714 (Reid) establish a policy for the commonwealth to achieve net-zero emissions economy-wide by 2045 (2040 for the electric sector) and require the next Virginia Energy Plan, due in 2022, to identify actions towards achieving the goal. Depending on who the next governor is, we may see little or nothing in the way of new proposals, or we may see proposals for transportation and home electrification, deep building retrofits, net-zero homes and office buildings, carbon sequestration on farm and forest land and innovative solutions for replacing fossil fuels in industrial use.

Collateral effects will drive greenhouse gas emissions even lower.

Proposed new merchant gas plants are likely to go away. With Virginia joining RGGI and all fossil fuel generating plants required to pay for the right to spew carbon pollution, the developers of two huge new merchant gas plants proposed for Charles City County will likely take their projects to some other state, if they pursue them at all.

Neither the 1,600 MW Chickahominy Power Station and the 1,050 C4GT plant a mile away planned to sell power to Virginia utilities; their target is the regional wholesale market, which currently rewards over-building of gas plant capacity even in the absence of demand. The Chickahominy and C4GT developers sought an exemption from RGGI through legislation; the bill passed the Senate but got shot down in the House.

If the C4GT plant goes away, so too should Virginia Natural Gas’ plans for a gas pipeline and compressor stations to supply the plant, the so-called Header Improvement Project.

Other coal plants will close. Although the CEA only requires Dominion to retire two coal units at its Chesterfield Power Station, other coal plants in the state will close by the end of this decade, too. That’s because the economics are so heavily against coal these days that it was just a matter of time before their owners moved to close them.

Adding the cost of carbon allowances under RGGI will speed the process along. That includes the Clover Station, which Dominion owns in partnership with Old Dominion Electric Cooperative (ODEC), and the Virginia City Hybrid Electric plant in Wise County, Dominion’s most expensive coal plant, which should never have been built. 

The Atlantic Coast and Mountain Valley Pipelines find themselves in more trouble than ever. If I had a dollar for every time a Dominion or Mountain Valley spokesperson said, “Our customers desperately need this pipeline,” I would not be worried about the stock market right now.

The fact is that no one was ever sure who those customers might be, other than affiliates of the pipeline owners themselves—and that doesn’t exactly answer the question. With Virginia now on a path away from all fossil fuels, neither pipeline has a path to profitability inside Virginia any longer, if they ever had one.

 

A version of this article originally appeared in the Virginia Mercury on March 31. 

New laws clear away barriers to small solar projects

Edward Hicks’ “Peaceable Kingdom,” Metropolitan Museum of Art. Not shown: the 50 guys with muskets making darn sure the lions don’t try anything.

Virginia General Assembly members have an expression for when opposing interests agree on a bill: they call it “peace in the valley.”

The phrase comes from a gospel song by Thomas A. Dorsey, written for Mahalia Jackson and then later sung by a bunch of white guys including Red Foley and Elvis Presley. The lyrics, written on the eve of World War II, speak of a longing for the peace of the afterlife, where “the bear will be gentle, the wolf will be tame, and the lion will lay down by the lamb.”

I’m not sure the General Assembly has ever inspired anything quite so wonderful as the song describes. More typically, a legislator uses the expression to indicate that a bunch of special interests, having duked it out amongst themselves, have now each gotten everything they thought they could get out of negotiations and so are offering up a compromise that legislators can adopt without having to trouble themselves too much with the details.

So, not exactly the peace of God, but still a pretty good state of affairs from the point of view of committee members who have thirty or forty other bills to deal with that day.

Peace rarely used to characterize bills supporting distributed solar generation. The lion had no reason to lie down by the lamb. Indeed, more typically the lamb was lunch.

But the November election shifted the balance of power in the General Assembly. At first it wasn’t clear how much power the lion and bear were going to have to cede. In fact, no one is quite sure even now where the balance of power lies, even after weeks of intense skirmishing finally produced the flawed but-still-transformational Clean Economy Act. The bill passed, and the parties all claimed victory, but anyone who thinks there might be peace in the energy valley is advised to stick around for next year.

The skirmishing over distributed solar was decidedly less intense. Advocates and utilities achieved peace on a number of provisions removing barriers to rooftop solar, dramatically increasing program caps for third-party power purchase agreements (PPAs), raising the net metering cap, establishing shared solar programs, and making it easier for customers in homeowner’s associations to install solar.

Much work remains. Removing barriers is a necessary first step, but now the challenge is to make small-scale solar a priority for Virginia. The Clean Economy Act focused on cheap utility-scale projects, but an economy that runs primarily on renewables needs solar on places other than farmland. Getting to 100 percent carbon-free energy means putting solar on as many sunny homes and businesses as possible—not to mention government buildings, warehouses, data centers, parking lots, highway rest areas, closed landfills, brownfields, former mining sites and vacant land around airports.

Solar Freedom and the Clean Economy Act

The final version of the Solar Freedom bill, HB572 (Keam) and SB710(McClellan), made eight changes affecting customers of investor-owned utilities. Customers of electric cooperatives are excluded; a law passed last year addressed many of these issues.

• It raises the cap on the total amount of net metered solar allowed from 1 percent currently to 6 percent (broken out as 1 percent for low and moderate income customers and 5 percent for everyone else). This means customers installing rooftop solar will continue getting credit for surplus energy at the retail rate. When net-metered projects reach 3 percent, or in 2024 for APCo or 2025 for Dominion, the State Corporation Commission will conduct a solar study to determine the appropriate rate structure for new net metering customers. Existing net metering customers will not be affected.

• It raises the program cap on third-party power purchase agreements (PPAs). PPAs are the financing mechanism that schools, local governments, universities and other customers have been using to install solar on-site with no money down. The original program cap of 50 MW in Dominion territory was reached this fall, halting projects across the state. In Dominion territory, the limit will now go to 500 MW for jurisdictional customers (that’s most people) and 500 MW for non-jurisdictional customers (including local governments and public schools). The new cap in Appalachian Power territory is 40 MW for all customers, and there will be no limit in Old Dominion Power (Kentucky Utilities) territory. In addition, the legislation broadens who can take advantage of this program to any tax-exempt customer, and all other customers with projects over 50 kW.

• It increases the allowable size of net-metered commercial projects from 1 MW today to 3 MW.

• It increases the allowable size of residential net-metered projects to 25 kW, from 20 kW today.

• It removes standby charges for residential customers with solar facilities of less than 15 kW in Dominion territory, and removes them entirely for customers of Appalachian Power and Old Dominion Power.

• It allows residents of apartment buildings and condominiums in Dominion Energy and Old Dominion Power territories to share the output of on-site solar facilities.

• In Dominion territory, it allows customers to install enough solar to meet 150 percent of their previous year’s demand, recognizing the needs of growing families and EV owners. In APCo territory the limit remains at 100 percent of previous demand.

• Finally, it allows Fairfax County to move forward on a 5 MW solar project on a closed landfill, with the electricity serving government facilities. This will be the first such project in the state.

Solar Freedom overlaps with the Clean Economy Act, HB1526 (Sullivan) and SB851 (McClellan), on several of these provisions, including the net metering cap and PPAs. The Clean Economy Act also creates a Renewable Portfolio Standard (RPS) focused on utility-scale projects, but with a small carve-out for distributed “wind, solar and anaerobic digestion resources of one megawatt or less located in the Commonwealth.” The carve-out is limited to 1 percent of Dominion’s RPS targets. This level is so modest it probably won’t act as a market stimulus, especially for projects not owned by Dominion itself, and the addition of anaerobic digestion should give anyone pause. Also, there is no carve-out in APCo territory.

The failure of the Clean Economy Act to drive small-scale solar growth is a missed opportunity that will need to be addressed in the future if the General Assembly truly wants to achieve a clean energy economy. I recommend taking away the appalling subsidies for paper companies and letting those millions fund distributed solar.

Community solar

The provision in Solar Freedom that allows residents of multifamily buildings to share onsite solar arrays looks favorable to customers but requires an SCC proceeding this year to determine the bill credit rate for subscribers. The rate “shall be set such that the shared solar program results in robust project development and shared solar program access for all customer classes.” Further, “the Commission shall annually calculate the applicable bill credit rate as the effective retail rate of the customer’s rate class, which shall be inclusive of all supply charges, delivery charges, demand charges, fixed charge, and any applicable riders or other charges to the customer.”

While the Solar Freedom provision is restricted to multifamily residential buildings, the General Assembly also passed legislation more generally allowing for third-party owned community solar, rebranded as “shared solar.”

SB629 (Surovell) and HB1634 (Jones) instruct the SCC to set up a shared solar program for customers of Dominion and Old Dominion Power by Jan. 1, 2021. Shared solar projects must be no larger than 5 MW, can be owned by any for profit or nonprofit entity, and require at least three subscribers. The program is capped at a total of 150 MW, with an additional 50 MW possible if the utility demonstrates that 45 MW of shared solar has gone to low-income consumers.

The success of a shared solar program ultimately depends on whether project owners can make money and customers can save money. It remains to be seen whether that will happen. The provisions in these bills are less favorable to customers than the multifamily solar provisions of Solar Freedom. Customers will have to pay a minimum bill amount (waived for low-income customers), and there is no requirement that the bill credit rate be set at a rate than results in “robust project development.”

Finally, HB573 (Keam) requires that community solar projects owned by investor-owned utilities must include higher-cost facilities located in low-income areas.

Homeowner associations

Another successful piece of legislation is HB414 (Delaney) and SB504(Petersen), clarifying the respective rights of homeowners and HOAs when it comes to solar panels.

Since 2014, Virginia law has prohibited HOAs from banning solar panels unless the ban appears in the association’s recorded declaration. However, the law respects the right of HOAs to place “reasonable restrictions” on the size, place, and manner of placement of solar facilities on members’ property.

The fact that the law did not define “reasonable” turned out to be a problem. Some HOAs decided it was “reasonable” to insist solar panels be confined to the rear of a roof, whether there was sunshine back there or not. The result has been acrimony, added expense and blocked projects.

Aaron Sutch of Solar United Neighbors of Virginia estimates that since the 2014 legislation, HOAs have blocked over 300 Virginia installations with a value of over $6 million. Sutch negotiated with lobbyists for homeowners associations to achieve peace in this particular valley.

The new legislation provides that a restriction is not reasonable if it increases the cost of installation of the solar panels by 5 percent over the projected cost of the initially proposed installation, or reduces the energy production by 10 percent below the projected production. The owner must provide documentation prepared by an independent solar panel design specialist to show that the restriction is not reasonable by these criteria.

Other legislation

A few other bills should help customers finance solar panels.

B654 (Guy) authorizes DMME to sponsor a statewide financing program for commercial solar, energy efficiency and stormwater investments. The effect will be to boost the availability of low-interest financing through Commercial Property Assessed Clean Energy (C-PACE) in areas of the state where the locality has not developed a program of its own.

B754 (Marsden) authorizes (though it does not require) electric cooperatives to establish on-bill financing of energy efficiency and renewable energy. The program allows for the costs to be paid for out of the savings these improvements deliver. The coops asked for this authority, so presumably at least one plans to follow through.

Finally, B542 (Edwards) repeals the sunset date on crowdfunding provisions and provides fixes for obstacles to a financing approach that, to my knowledge, has been used only once for solar projects in Virginia.

This article appeared first in the Virginia Mercury on March 18,2020. 

It’s halftime at the GA, and do we ever have a show!

battle scene

Tense negotiations over the Clean Economy Act. (Aniello Falcone, Metropolitan Museum of Art)

Welcome to “Crossover,” the day on which the Virginia House and Senate have to finish the work on their bills and send them over to the other chamber. This is sudden death time; if a bill didn’t get across the finish line in time, it is dead for the year.

In past years, henceforth to be known as “the bad old days,” almost nothing good even got out of committee, much less reached Crossover. Clean energy advocates could pretty much plan vacations for the second half of February.

This year the Democrats are on a tear, especially in the House. Yes, a lot of good bills have been heavily watered down. This is still the Old Dominion, with the emphasis on Dominion. And it is definitely too early to break out the champagne, because the action isn’t over for the bills still in play. But overall, 2020 is shaping up to be a watershed year for clean energy.

BILLS STILL ALIVE

Energy Transition

HB1526/SB851, the Clean Economy Act, has been the subject of intense and continuous negotiation. First there were a bunch of amendments that weakened it; then there were a bunch that strengthened it. It’s been a wild ride, and we may still see more changes during the second half of Session. But it’s alive! (HB1526 passed the House 52-47; Democrats Rasoul and Carter voted no. SB851 passed the Senate on a party-line vote of 21-19.)

SB94 (Favola) rewrites the Commonwealth Energy Policy to bring it in line with Virginia’s commitment to dealing with climate change. The bill sets a target for net-zero greenhouse gas emissions economy wide by 2045, and in the electric sector by 2040. This section of the Code is for the most part merely advisory; nonetheless, it is interesting that Dominion Energy supported the bill. (Passed the Senate 21-18, on party lines.)

Delegate Reid’s HB714 is similar to SB94 but contains added details, some of which have now been incorporated into SB94. (Passed the House 55-45 with a substitute.)

HB672 (Willett) establishes a policy “to prevent and minimize actions that contribute to the detrimental effects of anthropogenic climate change in the Commonwealth.” State agencies are directed to consider climate change in any actions involving state regulation or spending. Local and regional planning commissions are required to consider impacts from and causes of climate change in adapting comprehensive plans. (Passed the House 55-44 with a substitute.)

HB547 (Delaney) establishes the Virginia Energy and Economy Transition Council to develop plans to assist the Commonwealth in transitioning from the use of fossil fuel energy to renewable energy by 2050. The Council is to include members from labor and environmental groups. (Passed the House 54-45.)

RGGI bills, good and bad

The Democratic takeover of the General Assembly means Virginia will finally join the Regional Greenhouse Gas Initiative (RGGI), either according to the regulations written by DEQ or with a system in place that raises money from auctioning carbon allowances.

HB981 (Herring) and SB1027 (Lewis) is called the Clean Energy and Community Flood Preparedness Act. It implements the DEQ carbon regulations and directs DEQ to enter the RGGI auction market. Auction allowances are directed to funds for flood preparedness, energy efficiency and climate change planning and mitigation. We are told this is the Administration’s bill. A similar bill, HB20 (Lindsey), was incorporated into HB981. (HB981 passed the House 53-46. SB1027 passed the Senate 22-18.)

SB992 (Spruill) requires the Air Board to give free allowances for three years to any new power plant that was permitted before June 26, 2019, the effective date of the carbon trading regulations. Essentially it gives special treatment to two planned gas generation plants that aren’t needed and therefore have sketchy economics unless they get this giveaway. Clean energy advocates will be looking to kill this one in the House. (Passed the Senate 27-13. A number of Democrats who should know better voted for the bill.)

RPS

The Clean Economy Act contains a renewable portfolio standard (RPS) requiring utilities to include in their electricity mix a percentage of renewable energy that ratchets up over time. In addition, HB1451 (Sullivan) is a stand-alone RPS bill that also includes an energy storage mandate. It appears to be identical to the RPS and storage provisions of the CEA (of which Sullivan is also the patron). (Passed the House 52-47.)

Customer-sited solar/net metering

Solar Freedom SB710 (McClellan) and HB572 (Keam) lifts barriers to customer-sited renewable energy such as rooftop solar. The changes include lifting the caps on PPAs and net metering, and eliminating standby charges. Nearly identical versions were filed by Delegates Lopez (HB1184) (rolled into HB572) and Simon (HB912) (ditto). SB532 (Edwards), a stand-alone bill to make PPAs legal, was rolled into SB710. (SB710 passed the Senate 22-18 with a substitute that is much more limited than the original bill. HB572 passed the House with just a minor substitute 67-31. HB1647 (Jones) is a Solar Freedom bill that also includes community solar. (Passed the House 55-45.) Several provisions of Solar Freedom also appear in the Clean Economy Act.

HOAs HB414 (Delaney) and SB504 (Petersen) clarifies the respective rights of homeowners associations (HOAs) and residents who want to install solar. The law allows HOAs to impose “reasonable restrictions,” a term some HOAs have used to restrict solar to rear-facing roofs regardless of whether these get sunshine. The bill clarifies that HOA restrictions may not increase the cost of the solar facility by more than 5%, or decrease the expected output by more than 10%. (HB414 passed the House 95-4. SB504 passed the Senate 40-0.)

Community solar

HB1647 (Jones) (see above) includes community solar in a bill that otherwise looks like Solar Freedom.

SB629 (Surovell) creates a program for “solar gardens.” (Substitute passed the Senate 39-0.)

HB1634 (Jones) requires utilities to establish shared-solar programs that allows customers to purchase subscriptions in a solar facility no greater than 5 MW. (Amended with a substitute; it now looks a lot like SB629. Passed the House 99-0.)

HB573 (Keam) affects the utility-controlled and operated “community solar” programs required by 2017 legislation. The bill requires that “an investor-owned utility shall not select an eligible generating facility that is located outside a low-income community for dedication to its pilot program unless the investor-owned utility contemporaneously selects for dedication to its pilot program one or more eligible generating facilities that are located within a low-income community and of which the pilot program costs equal or exceed the pilot program costs of the eligible generating facility that is located outside a low-income community.” (Passed the House 90-8.)

Offshore wind

The CEA contains detailed provisions for the buildout and acquisition of offshore wind. HB234 (Mugler) directs the Secretary of Commerce and Trade to develop an offshore wind master plan. (Passed House unanimously with substitute.)

SB860 (Mason) and HB1664 (Hayes) puts the construction or purchase of at least 5,200 MW of offshore wind in the public interest. (SB860 passed the Senate 22-18. HB1664 amended to incorporate HB1607, but with less gold-plating than the other bill. HB1664 passed the House 65-34.)

HB1607 (Lindsey) and SB998 (Lucas) allows Dominion to recover the costs of building offshore wind farms as long as it has a plan for the facilities to be in place before January 1, 2028 and that it has used reasonable efforts to competitively source the majority of services and equipment. All utility customers in Virginia, regardless of which utility serves them, will participate in paying for this through a non-bypassable charge. Surely this bill came straight from Dominion. (HB1607 amended to incorporate HB1664; only 1664 moves forward. SB998 passed the Senate 40-0.)

Nuclear and biomass

SB828 and SB817 declare that any time the Code or the Energy Policy refers to “clean” or “carbon-free” energy, it must be read to include nuclear energy. In subcommittee, Senator Lewis suddenly announced he was amending the bills to add “sustainable biomass” as well. After an uproar and a crash course on biomass, both bills eventually went back to being only about nuclear. (Both bills passed the Senate unanimously.) Unfortunately, some biomass from paper companies did creep into the Clean Economy Act in spite of the best efforts of clean energy advocates.

Energy Efficiency

HB1526/SB851, the Clean Economy Act, contains a mandatory energy efficiency resource standard (EERS) and contains other provisions for spending on low-income EE programs. HB981 (the RGGI bill) specifies that a portion of the funds raised by auctioning carbon allowances will fund efficiency programs.

There are also a few standalone efficiency bills. HB1450 (Sullivan) and SB354 (Bell) appear to be the same as the efficiency provisions of the CEA, though the standalone applies only to Dominion and APCo. (HB1450 passed House 75-24,picking up a respectable number of Republicans. SB354 stricken at request of patron in C&L.)

HB1576 (Kilgore) doesn’t set new efficiency targets, but it makes it harder for large customers to avoid paying for utility efficiency programs. In the past, customers with over 500 kW of demand were exempt; this bill allows only customers with more than 1 MW of demand to opt out, and only if the customer demonstrates that it has implemented its own energy efficiency measures. (Passed the House, 99-0.)

HB575 (Keam) beefs up the stakeholder process that Dominion and APCo engage in for the development of energy efficiency programs. (Passed the House 99-0 and referred to Senate C&L.)

SB963 (Surovell) establishes the Commonwealth Efficient and Resilient Buildings Board to advise the Governor and state agencies about ways to reduce greenhouse gas emissions and increase resiliency. Every agency is required to designate and energy manager responsible for improving energy efficiency and reducing greenhouse gas emissions. (Passed the Senate 40-0.)

SB628 (Surovell) requires the residential property disclosure statement provided by the Real Estate Board to include advice that purchasers should obtain a residential building energy analysis as well as a home inspection prior to settlement. (Passed the Senate 26-14.)

Energy storage

HB1183 (Lopez) requires the SCC to establish a task force on bulk energy storage resources. (Passed the House 91-9 with a substitute.)

SB 632 (Surovell) creates a storage target of 1,000 MW and states that this is in the public interest.  Senator Surovell says this bill originated with the Governor’s office. (Passed the Senate 20-19 with a substitute.)

Siting, permitting, and other issues with utility-scale renewable energy

HB1327 (Austin) allows localities to impose property taxes on generating equipment of electric suppliers utilizing wind turbines at a rate that exceeds the locality’s real estate tax rate by up to $0.20 per $100 of assessed value. Under current law, the tax may exceed the real estate rate but cannot exceed the general personal property tax rate in the locality. Wind developer Apex Clean Energy helped develop the bill and supports it. (Passed the House 81-12, now goes to Senate Finance.)

HB656 (Heretick) and SB875 (Marsden) allow local governments to incorporate into their zoning ordinances national best practices standards for solar PV and batteries. (Both bills passed their chambers unanimously with substitute language.)

HB1131 (Jones) and SB762 (Barker) authorize localities to assess a revenue share of up to $0.55 per megawatt-hour on solar PV projects, in exchange for which an existing tax exemption is expanded. (HB1131 Passed the House 54-42 with a substitute. SB762 passed Senate 40-0.)

HB657 (Heretick) and SB893 (Marsden) exempt solar facilities of 150 MW or less from the requirement that they be reviewed for substantial accord with local comprehensive plans. (HB657 passed the House with a substitute, 59-41. SB893 was passed by indefinitely—killed—in Local Government.)

HB1434 (Jones) and SB763 (Barker) reduces the existing 80% machinery and tools tax exemption for large solar projects. (HB1434 passed the House 57-41. SB763 passed the Senate 40-0.) 

SB870 (Marsden) authorizes local planning commissions to include certain regulations and provisions for conditional zoning for solar projects over 5 MW. (Passed Senate 40-0 with a substitute.)

HB1675 (Hodges) requires anyone wanting to locate a renewable energy or storage facility in an opportunity zone to execute a siting agreement with the locality. (Passed House 89-7.)

Grants, tax deductions, tax credits and other financing

HB654 (Guy) authorizes DMME to sponsor a statewide financing program for commercial solar, energy efficiency and stormwater investments. The effect would be to boost the availability of Commercial Property Assessed Clean Energy (C-PACE) in areas of the state where the locality has not developed a program of its own. (Passed House 75-23. Assigned to Senate Committee on Local Government.)

SB754 (Marsden) authorizes utilities to establish on-bill financing of energy efficiency, electrification, renewable energy, EV charging, energy storage and backup generators. (Passed Senate 40-0 with a substitute.)

HB1656 (O’Quinn) authorizes Dominion and APCo to design incentives for low-income people, the elderly, and disable persons to install energy efficiency and renewable energy, to be paid for by a rate adjustment clause. (Passed the House 95-4.)

HB1707 (Aird) makes changes to the Clean Energy Advisory Board, which is (already) authorized to administer public grant funding. (Passed the House 65-33 with a substitute. Referred to Senate Ag.)

SB634 (Surovell) establishes the Energy Efficiency Subsidy Program to fund grants to subsidize residential “efficiency” measures, interestingly defined as solar PV, solar thermal or geothermal heat pumps. It also creates a subsidy program for electric vehicles. (Passed the Senate 32-7. Senator Surovell has requested a budget amendment of $1 million for the fund. )

SB1039 (Vogel) allows a real property tax exemption for solar energy equipment to be applied retroactively if the taxpayer gets DEQ certification within a year. (Passed the Senate 40-0.)

SB542 (Edwards) repeals the sunset date on crowdfunding provisions and provides fixes for certain existing obstacles to this financing approach. (Passed the Senate 40-0.)

Customer rights to shop for renewable energy

HB868 (Bourne) and SB376 (Suetterlein and Bell) allows customers to buy 100% renewable energy from any licensed supplier, regardless of whether their own utility has its own approved tariff. (HB868 passd the House 55-44. But note that its Senate companion SB376 was passed by indefinitely in C&L.)

HB 889 (Mullin) and SB 379 (McPike), the Clean Energy Choice Act, is broader than HB868. The legislation allows all customers to buy 100% renewable energy from any licensed supplier regardless of whether their utility has its own approved tariff. In addition, large customers (over 5 MW of demand) of IOUs also gain the ability to aggregate their demand from various sites in order to switch to a competitive supplier that offers a greater percentage of renewable energy than the utility is required to supply under any RPS, even if it is not 100% renewable. Large customers in IOU territory who buy from competing suppliers must give three years’ notice before returning to their utility, down from the current five years. The SCC is directed to update its consumer protection regulations. (HB889 passed the House 56-44. But its Senate companion SB379 passed by indefinitely in C&L.)

Other utility regulation

HB528 (Subramanyam) requires the SCC to decide when utilities should retire fossil fuel generation. (Passed the House 55-44.)

HB1132 (Jones, Ware) put the SCC back in control of regulating utility rates. (Passed the House 77-23.)

SB731 (McClellan) also affects rates, in this case by addressing a utility’s rate of return. The SCC determines this rate by looking first at the average returns of peer group utilities, and then often going higher. The bill lowers the maximum level that the SCC can set above the peer group average. (Passed the Senate 38-1.)

HB167 (Ware) requires an electric utility that wants to charge customers for the cost of using a new gas pipeline to prove it can’t meet its needs otherwise, and that the new pipeline provides the lowest-cost option available to it. (Note that this cost recovery review typically happens after the fact, i.e., once a pipeline has been built and placed into service.) Last year Ware carried a similar bill that passed the House in the face of frantic opposition from Dominion Energy, before being killed in Senate Commerce and Labor. (Passed the House unanimously with a substitute. It will now go to Senate C&L, where it may still have trouble from a Dominion-friendly committee.)

DEAD FOR THE YEAR

Green New Deal HB77 (Rasoul) sets out an ambitious energy transition plan and includes a fossil fuel moratorium. (Sent from Labor and Commerce to Appropriations, where it was not brought up. This is a polite way of killing a bill without anyone having to vote on it).

Undercutting RGGI HB110 (Ware) says that if Virginia joins RGGI, DEQ must give free carbon allowances to any facility with a long-term contract predating May 17, 2017 that doesn’t allow recovery of compliance costs. Rumor has it the bill was written to benefit one particular company. (Left in Labor and Commerce.)

Clean energy standard Instead of an RPS, SB876 (Marsden) proposed a “clean energy standard” that made room for some coal and gas with carbon capture. (Recognizing a number of problems with this approach, Senator Marsden rolled his bill into SB851; that’s GA-speak for killing a bill while still giving the patron points for trying).

Greenhouse gas inventory HB525 (Subrmanyam and Reid) require a statewide greenhouse gas inventory covering all sectors of the economy. (Laid on the table in a subcommittee, which also means it was killed.)

Brownfields HB1306 (Kory) directs the Department of Mines, Minerals and Energy to adopt regulations allowing appropriate brownfields and lands reclaimed after mining to be developed as sites for renewable energy storage projects. (Stricken from docket in House Ag.) HB1133 (Jones) makes it in the public interest for utilities to build or purchase, or buy the output of, wind or solar facilities located on previously developed sites. (Continued to 2021, yet another polite way of killing a bill, though it leaves them not technically dead. So should we call them the undead? Let’s hope the concept is resurrected next year, anyway.)

Local action HB413 (Delaney) authorizes a locality to include in its subdivision ordinance rules establishing minimum standards of energy efficiency and “maintaining access” to renewable energy. (Left in Cities, Counties and Towns.)

Retail choice SB842 (Petersen) provides for all retail customers of electricity to be able to choose their supplier, and instructs the SCC to promulgate regulations for a transition to a competitive market for electricity. Existing utilities will continue to provide the distribution service. The bill also requires suppliers of electricity to obtain at least 25% of sales from renewable energy by 2025, 50% by 2030, and 100% by 2050. Renewable energy is defined to include “sustainable biomass” but not waste incineration or landfill gas. (Continued to 2021.)

Resilience hubs HB959 (Bourne) directs DMME to establish a pilot program for resilience hubs. These are defined as a simple combination of solar panels and battery storage capable of powering a publicly-accessible building in emergency situations or severe weather events, primarily to serve vulnerable communities. (Continued to 2021.)

Net metering HB1067 (Kory) deals with a specific situation where a customer has solar on one side of property divided by a public right-of-way, with the electric meter to be served by the solar array on the other side. The legislation declares the solar array to be located on the customer’s premises. (Item 4 of Solar Freedom would also solve the problem.) (Continued to 2021.)

Utility restructuring

HB1677 (Keam) replaces Virginia’s current vertically-integrated monopoly structure with one based on competition and consumer choice. Existing monopoly utilities would be required to choose between becoming sellers of energy in competition with other retail sellers, or divesting themselves of their generation portfolios and retaining ownership and operation of just the distribution system. Other features: a nonprofit independent entity to coordinate operation of the distribution system; performance-based regulation to reward distribution companies for reliable service; consumer choices of suppliers, including renewable energy suppliers; an energy efficiency standard; a low-income bill assistance program; and consumer protections and education on energy choices. (This was politely continued to 2021 in Labor and Commerce with no debate. The patrons were complimented for “starting a conversation.”)

HB206 (Ware) was, I’m told, the beta version of Delegate Keam’s HB1677. (Incorporated into HB1677, which was continued to 2021.)

SB842 (Petersen) seeks to achieve the same end as HB1677 and HB206, but it puts the SCC in charge of writing the plan. The bill provides for all retail customers of electricity to be able to choose their supplier, and instructs the SCC to promulgate regulations for a transition to a competitive market for electricity. Existing utilities will continue to provide the distribution service. The bill also requires suppliers of electricity to obtain at least 25% of sales from renewable energy by 2025, 50% by 2030, and 100% by 2050. Renewable energy is defined to include “sustainable biomass” but not waste incineration or landfill gas. (Continued to 2021.)

Anti-renewable energy bills

HB205 (Campbell) adds unnecessary burdens to the siting of wind farms and eliminates the ability of wind and solar developers to use the DEQ permit-by-rule process for projects above 100 megawatts. (Laid on the table in subcommittee.)  HB1171 (Poindexter) is a make-work bill requiring an annual report of the acreage of utility scale solar development, as well as the acreage of public or private conservation easements. (Continued to 2021.) HB1636 (Campbell) prohibits the construction of any building or “structure” taller than 50 feet on a “vulnerable mountain ridge.” You can tell the bill is aimed at wind turbines because it exempts radio, TV, and telephone towers and equipment for transmission of communications and electricity. (Laid on the table in subcommittee. FWIW, we’re told it was aimed at hotels, not wind. Yeah, sure . . .) HB1628 (Poindexter) prohibits the state from joining RGGI or adopting any carbon dioxide cap-and-trade program without approval from the General Assembly. (Passed by indefinitely in subcommittee. Yep, another way to kill a bill.)

Financing

HB461 (Sullivan) establishes a tax credit of 35%, up to $15,000, for purchases of renewable energy property. It is available only to the end-user (e.g., a resident or business who installs solar or a geothermal heat pump). Unfortunately, loose drafting would have also made the credit available for wood-burning stoves and other non-clean energy applications. (Died in a Finance subcommittee on a 5-5 vote.)

HB633 (Willett) establishes a tax deduction up to $10,000 for the purchase of solar panels or Energy Star products. (Stricken from docket in a Finance subcommittee.)

HB947 (Webert) expands the authority of localities to grant tax incentives to businesses located in green development zones that invest in “green technologies,” even if they are not themselves “green development businesses.” Green technologies are defined as “any materials, components, equipment, or practices that are used by a business to reduce negative impacts on the environment, including enhancing the energy efficiency of a building, using harvested rainwater or recycled water, or installing solar energy systems.” (Continued to 2021.)

SB1061 (Petersen) allows residential customers to qualify for local government Property Assessed Clean Energy (PACE) financing programs for renewable energy and energy efficiency improvements; currently the availability of this financing tool is restricted to commercial customers. (Continued to 2021.)

HB754 (Kilgore) establishes the Virginia Brownfield and Coal Mine Renewable Energy Grant Fund, which will support wind, solar or geothermal projects sited on formerly mined lands or brownfields. (Left in Appropriations.)

[Updated February 12 to include late votes and fix a random meaningless line, and later to correct various other screw-ups that people have kindly brought to my attention.]

Renewable energy bills to watch

People gathered with signs supporting climate action

Grassroots activists gather at the steps of the Virginia Capital on January 14. Photo courtesy Sierra Club.

Yesterday’s post launched my annual roundup of energy and climate bills with a comparison of the two major energy transition bills filed to date, HB1526/SB851, the Clean Economy Act, and HB77, the Green New Deal Act. Today I’m covering other renewable energy bills. You will be glad to see I am addressing each only briefly, given the large number of them. Bills can still be filed as late as tomorrow evening, and there is often some lag in the Legislative Information System, which posts the bills, their summaries, their committee assignments, and what happens to them. I will add to this list once I’ve seen the rest, so check back for updates.

Most of these bills will be heard in Senate Commerce and Labor, or now in the House, Labor and Commerce, committees. Both House and Senate have established energy subcommittees. In the Senate, the subcommittee is advisory and does not have the power to kill a bill outright. The House subcommittee used to be a killing field for good bills. Hopefully this year will be different.

Bills with monetary implications typically must go to Finance or Appropriations.

As always, the action will be fast and furious, and it is already underway. Blink and you will miss it.

RPS

Both HB1526/SB851, the Clean Economy Act, and HB77, the Green New Deal Act, contain a renewable portfolio standard (RPS) requiring utilities to include in their electricity mix a percentage of renewable energy that ratchets up over time. In addition, HB1451 (Sullivan) is a stand-alone RPS bill that also includes an energy storage mandate. It applies only to IOUs but otherwise appears to be identical to the RPS and storage provisions of the CEA (of which Sullivan is also the patron).

Instead of an RPS, SB876 (Marsden) establishes a “clean energy standard” applicable to both IOUs and coops. A “clean energy resource” is defined as “any technology used to generate electricity without emitting carbon dioxide into the atmosphere,” including “(i) electric generation facilities that are powered by nuclear, solar, wind, falling water, wave motion, tides, or geothermal power; (ii) a natural gas-fired generation facility with 80 percent carbon capture; or (iii) a coal-fired generation facility with 90 percent carbon capture.” Aside from the contradiction in terms inherent in this definition, the clean energy standard also suffers from a delay in its starting point to 2030, when it begins at 30%–or about where Dominion is today with its nuclear plants. Considering only offshore wind and solar development already underway, the CES would not be a meaningful spur to new renewable energy for at least another 15 years. A couple of strong points, however: the bill also requires the closure of all coal-fired generation facilities by 2030, and requires workforce transition and community assistance plans. [Update: we’re told Senator Marsden agrees with the criticisms of this bill and does not intend to present it, at least without significant amendment.]

SB842 (Petersen) provides for all retail customers of electricity to be able to choose their supplier, and instructs the SCC to promulgate regulations for a transition to a competitive market for electricity. Existing utilities will continue to provide the distribution service. The bill also requires suppliers of electricity to obtain at least 25% of sales from renewable energy by 2025, 50% by 2030, and 100% by 2050. Renewable energy is defined to include “sustainable biomass” but not waste incineration or landfill gas.

Customer-sited solar

Solar Freedom” is back this year for another attempt to lift barriers to customer-sited renewable energy, including rooftop solar. The primary vehicles are SB710 (McClellan) and HB572 (Keam), with nearly identical versions from Lopez (HB1184) and Simon (HB912). It contains 8 provisions:

  1. Raising from 1% to 10% the cap on the total amount of solar that can be net metered in a utility territory, ensuring small-scale solar continues to grow.
  2. Making third-party financing using power purchase agreements (PPAs) legal for all customers of IOUs, removing current cap. The SCC reports the program in Dominion’s territory is now filled, putting in jeopardy Fairfax County’s ambitious solar plans. In Southwest Virginia in APCo territory, the program is even smaller and narrower, and several projects have been unable to move forward.
  3. Allowing local government entities to install solar facilities of up to 5 MW on government-owned property and use the electricity for schools or other government-owned buildings located on nearby property, even if not contiguous. This would allow Fairfax County to move forward with a planned solar facility on a closed landfill; localities with closed landfills across the state could similarly benefit.
  4. Allowing all customers to attribute output from a single solar array to multiple meters on the same or adjacent property of the same customer.
  5. Allowing the owner of a multi-family residential building to install a solar facility on the building or surrounding property and sell the electricity to tenants. This is considered especially valuable for lower-income residents, who tend to be renters.
  6. Removing the restriction on customers installing a net-metered solar facility larger than required to meet their previous 12 months’ demand. Many customers have expressed interest in installing larger facilities to serve planned home additions or purchases of electric vehicles.
  7. Raising the size cap for net metered non-residential solar facilities from 1 MW to 3 MW, a priority for commercial customers.
  8. Removing standby charges on residential facilities sized between 10-20 kW. Current charges are so onerous that few customers build solar arrays this size, hurting this market segment.

Other PPA and net metering bills

HB1647 (Jones) is similar to Solar Freedom but includes community solar and leaves out meter aggregation.

Five of the eight provisions of Solar Freedom also appear in the Clean Economy Act, omitting only numbers 3,4 and 5. SB532 (Edwards) is a stand-alone bill to make PPAs legal, using an approach similar to that of Solar Freedom and the CEA. HB1067 (Kory) deals with a specific situation where a customer has solar on one side of property divided by a public right-of-way, with the electric meter to be served by the solar array on the other side. The legislation declares the solar array to be located on the customer’s premises. (Item 4 of Solar Freedom would also solve the problem.)

Resilience hubs

HB959 (Bourne) directs DMME to establish a pilot program for resilience hubs. These are defined as a simple combination of solar panels and battery storage capable of powering a publicly-accessible building in emergency situations or severe weather events, primarily to serve vulnerable communities.

HOAs

HB414 (Delaney) and SB504 (Petersen) clarifies the respective rights of homeowners associations (HOAs) and residents who want to install solar. The law allows HOAs to impose “reasonable restrictions,” a term some HOAs have used to restrict solar to rear-facing roofs regardless of whether these get sunshine. The bill clarifies that HOA restrictions may not add more than $1,000 to the cost of solar facility, or decrease the expected output by more than 10%.

Community solar.

Three years ago legislation passed to allow utilities to set up so-called community solar programs. A couple of coops followed through, notably one from Central Virginia Electric Cooperative. Dominion received SCC approval to launch a small program back in 2018, but still hasn’t done so. That leaves a large base of potential customers—people without sunny roofs, apartment dwellers, or anyone who can’t afford to install solar—with no options.

The Clean Economy Act has detailed provisions for community solar, supported by the trade organization Community Solar Access. An alternative as a stand-alone bill is SB629 (Surovell). It creates an opportunity for subscribers in the territory of investor-owned utilities to buy from small (under 2 MW) “solar gardens” developed by third-party owners. Utilities would credit purchasers at the retail rate minus the utility’s costs. Preference would be given to solar gardens with low-income subscribers.

HB573 (Keam) does not establish a new program. It affects the utility-controlled and operated “community solar” programs required by 2017 legislation (and still not rolled out yet, though I assume the facilities have been selected). The bill requires that “an investor-owned utility shall not select an eligible generating facility that is located outside a low-income community for dedication to its pilot program unless the investor-owned utility contemporaneously selects for dedication to its pilot program one or more eligible generating facilities that are located within a low-income community and of which the pilot program costs equal or exceed the pilot program costs of the eligible generating facility that is located outside a low-income community.” I read this to mean utilities must select more expensive sites and develop more expensive programs in low-income areas than elsewhere, which seems . . . odd.

HB1634 (Jones) requires utilities to establish shared-solar programs that allows customers to purchase subscriptions in a solar facility no greater than 5 MW. (For what it’s worth, the GA passed a similar law in 2017, and we are still waiting for Dominion’s program.)

Resolving local disputes over utility-scale projects

Developers of utility-scale solar and wind sometimes face pushback at the local level. Opposition can come from residents who worry about viewsheds or who have been subjected to anti-renewables propaganda, and from local officials who want to collect tax revenue above the local real estate tax rate. Industry organizations and counties have worked to come up with a number of bills to resolve the concerns, though in some cases the counties have split on whether to support them.

HB1327 (Austin) allows localities to impose property taxes on generating equipment of electric suppliers utilizing wind turbines at a rate that exceeds the locality’s real estate tax rate by up to $0.20 per $100 of assessed value. Under current law, the tax may exceed the real estate rate but cannot exceed the general personal property tax rate in the locality. Wind developer Apex Clean Energy helped develop the bill and supports it.

Bills supported by the solar industry organization MDV-SEIA include:

  • HB656 (Heretick) and SB875 (Marsden) allow local governments to incorporate into their zoning ordinances national best practices standards for solar PV and batteries.
  • HB1131 (Jones) and SB762 (Barker) authorize localities to assess a revenue share of up to $0.55 per megawatt-hour on solar PV projects, in exchange for which an existing tax exemption is expanded.
  • HB657 (Heretick) and SB893 (Marsden) exempt solar facilities of 150 MW or less from the requirement that they be reviewed for substantial accord with local comprehensive plans.
  • HB1434 (Jones) reduces the existing 80% machinery and tools tax exemption for large solar projects.
  • SB870 (Marsden) authorizes local planning commissions to include certain regulations and provisions for conditional zoning for solar projects over 5 MW.

Other RE siting bills

HB1133 (Jones) makes it in the public interest for utilities to build or purchase, or buy the output of, wind or solar facilities located on previously developed sites.

HB1675 (Hodges) requires anyone wanting to locate a renewable energy or storage facility in an opportunity zone to execute a siting agreement with the locality.

A few bills appear designed to make wind and solar projects harder to site, or are intended to rile up sentiment against solar: HB205 (Campbell) adds unnecessary burdens to the siting of wind farms and eliminates the ability of wind and solar developers to use the DEQ permit-by-rule process for projects above 100 megawatts. HB1171 (Poindexter) is a make-work bill requiring an annual report of the acreage of utility scale solar development, as well as the acreage of public or private conservation easements. HB1636 (Campbell) prohibits the construction of any building or “structure” taller than 50 feet on a “vulnerable mountain ridge.” You can tell the bill is aimed at wind turbines because it exempts radio, TV, and telephone towers and equipment for transmission of communications and electricity.

Grants, tax deductions, tax credits and other financing

HB754 (Kilgore) establishes the Virginia Brownfield and Coal Mine Renewable Energy Grant Fund, which will support wind, solar or geothermal projects sited on formerly mined lands or brownfields. (See also Jones’ HB1133, which makes it in the public interest for utilities to build or purchase, or buy the output of, wind or solar facilities located on previously developed sites. And see Kory’s HB1306, which directs DMME to adopt regulations allowing brownfields and lands reclaimed after mining to be developed as sites for renewable energy storage projects.)

HB461 (Sullivan) establishes a tax credit of 35%, up to $15,000, for purchases of renewable energy property. It is available only to the end-user (e.g., a resident or business who installs solar or a geothermal heat pump).

HB633 (Willett) establishes a tax deduction up to $10,000 for the purchase of solar panels or Energy Star products.

HB654 (Guy) authorizes DMME to sponsor a statewide financing program for commercial solar, energy efficiency and stormwater investments. The effect would be to boost the availability of Commercial Property Assessed Clean Energy (C-PACE) in areas of the state where the locality has not developed a program of its own.

HB947 (Webert) expands the authority of localities to grant tax incentives to businesses located in green development zones that invest in “green technologies,” even if they are not themselves “green development businesses.” Green technologies are defined as “any materials, components, equipment, or practices that are used by a business to reduce negative impacts on the environment, including enhancing the energy efficiency of a building, using harvested rainwater or recycled water, or installing solar energy systems.”

SB542 (Edwards) repeals the sunset date on crowdfunding provisions and provides fixes for certain existing obstacles to this financing approach. The bill is the result of lessons learned in developing a 2019 “solar bonds” program for five commercial and non-profit customers.

SB754 (Marsden) authorizes utilities to establish on-bill financing of energy efficiency, electrification, renewable energy, EV charging, energy storage and backup generators.

HB1656 (O’Quinn) authorizes Dominion and APCo to design incentives for low-income people, the elderly, and disable persons to install energy efficiency and renewable energy, to be paid for by a rate adjustment clause.

HB1701 (Aird) authorizes the Clean Energy Advisory Board to administer public grant funding, and makes small changes to the Board.

SB634 (Surovell) establishes the Energy Efficiency Subsidy Program to fund grants to subsidize residential “efficiency” measures, interestingly defined as solar PV, solar thermal or geothermal heat pumps. It also creates a subsidy program for electric vehicles.

SB1039 (Vogel) allows a real property tax exemption for solar energy equipment to be applied retroactively if the taxpayer gets DEQ certification within a year.

SB1061 (Petersen) allows residential customers to qualify for local government Property Assessed Clean Energy (PACE) financing programs for renewable energy and energy efficiency improvements; currently the availability of this financing tool is restricted to commercial customers. Note the potential interplay with HB654, above.

Customer rights to shop for renewable energy

HB868 (Bourne) and SB376 (Suetterlein and Bell) allows customers to buy 100% renewable energy from any licensed supplier, regardless of whether their own utility has its own approved tariff.

HB 889 (Mullin) and SB 379 (McPike), the Clean Energy Choice Act, is broader than HB868. The legislation allows all customers to buy 100% renewable energy from any licensed supplier regardless of whether their utility has its own approved tariff. In addition, large customers (over 5 MW of demand) of IOUs also gain the ability to aggregate their demand from various sites in order to switch to a competitive supplier that offers a greater percentage of renewable energy than the utility is required to supply under any RPS, even if it is not 100% renewable. Large customers in IOU territory who buy from competing suppliers must give three years’ notice before returning to their utility, down from the current five years. The SCC is directed to update its consumer protection regulations.

Offshore wind

The CEA contains detailed provisions for the buildout and acquisition of offshore wind. HB234 (Mugler) directs the Secretary of Commerce and Trade to develop an offshore wind master plan.

SB860 (Mason) and HB1664 (Hayes) puts the construction or purchase of at least 5,200 MW of offshore wind in the public interest.

HB1607 (Lindsey) and SB998 (Lucas) allows Dominion to recover the costs of building offshore wind farms as long as it has a plan for the facilities to be in place before January 1, 2028 and that it has used reasonable efforts to competitively source the majority of services and equipment. All utility customers in Virginia, regardless of which utility serves them, will participate in paying for this through a non-bypassable charge. Surely this bill came straight from Dominion.

 

First solar crowdfunding campaign launches in Virginia

workers complete a rooftop solar array on a warehouse

A Secure Futures project on an InterChange warehouse. Photo courtesy of Secure Futures.

Unless you have a sunny roof or back yard, you probably haven’t found a way to put your money into building local solar facilities. This month, that changed.

Secure Futures, LLC has created a crowdfunding platform to sell solar bonds in support of five projects across Virginia, all for tax-exempt institutions. The financial details, including interest rates and terms, can be found on the crowdfunding website.

The five projects, totaling 1.3 megawatts of solar capacity, involve these customers:

  • The Caritas Center in Richmond, a non-profit that works to break the cycles of homelessness and addiction in the Metro Richmond area, will have a 426.6 kW system to serve a building under construction
  • Eastern Mennonite School, a private K-12 school in Harrisonburg; the 131 kW solar facility will meet 33% of the school’s total electric demand
  • Insurance Institute for Highway Safety, a nonprofit scientific and educational organization with a research center in Ruckersville, where the 200 kW facility will go
  • Shenandoah University, a private university in Winchester; the 467 kW project will provide 10% of the university’s electricity
  • Temple Rodef Shalom, the largest Jewish congregation in the Commonwealth, located in Falls Church; the 115 kW facility will provide 29% of the temple’s electricity

All of the projects will be installed using power purchase agreements or solar services agreements, and all are scheduled for completion in 2019 and 2020.

Although selling bonds to finance solar projects doesn’t sound revolutionary, I’ve found few precedents for the general public to buy into specific projects. Solar City sold corporate bonds directly to the public until the company was bought by Tesla; the bonds financed Solar City’s nationwide portfolio of projects. (Disclosure—I own stock in several renewable energy companies including Tesla, not always to my profit.)

Several years ago another company, Solar Mosaic, raised money from individual investors who could choose to link their investments to specific projects, but the company has since closed the investment side of its business. Other companies have offered investment opportunities only to accredited investors—i.e, people with high incomes or net worth.

Opportunities for regular folks to invest have been slow to emerge since Congress changed the law to allow people to invest through internet crowdfunding back in 2012. But it took the Securities and Exchange Commission until 2016 to implement rules, so it’s early yet. If Secure Futures finds success raising funds for these Virginia projects, perhaps solar bonds will turn out to be the next new thing in project financing.