In Virginia, advocates point to utility as key solar obstacle

As advocates, entrepreneurs and policy leaders push to expand solar power in Virginia, nearly all of them point to the same obstacle – Dominion Virginia Power, the state’s largest utility.

With clout matched in few other states, Dominion has defeated countless proposals to incentivize solar for homeowners, businesses and communities. And with the exception of a small pilot program, it has stood firm against allowing third parties to sell electricity in Virginia.

Robert Blue, Dominion’s CEO, acknowledged recently at the Virginia Chamber of Commerce’s annual energy conference in Richmond that the company has been “slow” to move on solar opportunities.

But, he added, “I would argue we’ve been prudent” by buying solar systems through its parent company in states with higher retail electricity prices, including California. “We look forward to bringing those lessons home,” he said.

Some state lawmakers disagree.

“I’ve been working on this for seven years,” said state Sen. Scott Surovell of Mt. Vernon in northern Virginia. “It’s like trying to push a snowball up a hill.”

Randy Minchew, who represents a portion of northern Virginia in the House of Delegates, said “Dominion is probably the strongest lobbying presence in the General Assembly, and usually gets everything it wants.”

“No single company even comes close to Dominion in terms of its wide-ranging influence and impact on Virginia politics and government,” Larry Sabato, a University of Virginia professor and political analysts recently told the Richmond Times-Dispatch.

Dominion is by far the largest campaign contributor to gubernatorial and legislative candidates and incumbents in the General Assembly. Through its political action committee and allied organizations, Dominion has donated almost $14 million to statewide and legislative candidates since 1997, according to the Virginia Public Access Project.

‘In for the long haul’

All that said, Dominion Virginia Power is demonstrating, albeit too slowly according to critics, that solar is beginning to make sense economically. And influence by corporations seeking to clean up their energy supplies may push the utility even further.

In one scenario of its Integrated Resource Plan updated in April, the utility pledges to add 400 megawatts (MW) of solar energy to its generation portfolio by 2020.

“Dominion is beginning to step up to the plate, at least for utility-scale solar. But they are way, way behind,” said Tony Smith, Founder and CEO of Secure Futures LLC, a solar developer in Staunton, Virginia.

“We are in solar energy for the long haul and we have a strategy that makes sense for all of our customers,” Blue said May 10.

But for customers that want to generate their own electricity, there are still considerable obstacles. Among a handful of minor energy incentives offered through Dominion, one credits residences with extra power their solar systems push back out on to the grid. But it is quick to limit it.

Customers can earn credits for the electricity generated by their solar panels beyond what they use on a given day with systems up to 20 kilowatts (kW). But those systems must be sized not to exceed their previous annual usage. If a customer installs a system larger than 10 kW, it is liable for a small “standby” charge to cover the utility’s costs of maintaining the power grid. A typical system for a single family home is 4-6 kW.

Lessons from North Carolina

By comparison, neighboring North Carolina is a national leader in solar installations, although mostly utility-scale.

By year-end 2016, the state – almost entirely through Duke Energy – is expected to have 2,000 MW of solar as part of its generation mix.

Since North Carolina passed a renewable electricity requirement in 2009 and for six years offered a state tax credit incentive for renewable energy systems, the private sector has directly or indirectly created just shy of 20,000 jobs, according to the North Carolina Sustainable Energy Industries Association. In 2016, solar jobs are expected to grow 10 percent on top of that. Virginia had about 2,000 jobs related to solar at the end of 2015.

Like Dominion, Duke Energy is buying most of the solar in the the state, where third-party electricity sales are prohibited, as they also are in Virginia. Much of North Carolina’s job growth is coming at vendors contracted by Duke. But those companies are also designing and building systems in other Southeast states, albeit not in Virginia.

For the second consecutive year, North Carolina in 2015 ranked second in the nation for new solar capacity installed, finishing behind only California. Clean energy advocates, the private sector and free-market evangelists would like to see similar growth in Virginia. But they’re not holding their breath.

“Dominion wants to own all the solar and be the only company installing it,” said Ivy Main, who writes about solar energy at the Power for the People VA blog.

“That’s a huge problem for two reasons: one is that Dominion is working very hard to lock out private investment in (distributed) solar. That’s bad for competition, bad for solar jobs, and bad for consumers who want the right to own their own solar panels and get the benefits themselves.”

“Dominion should be encouraged to install solar, but so should the private market,” Main continued. “It’s important that we remove the barriers to private investment and welcome real competition so we get more solar, faster, and so consumers aren’t over-paying.”

Corporate ‘muscle’ steps in

Dominion Energy, an affiliate of the utility, took a widely-heralded step in November last year by buying an 80 megawatt solar power-purchase agreement and system developed by Community Energy Inc. for Amazon Web Services on the state’s Eastern Shore peninsula.

While the Amazon solar system feeds into the PJM power grid that Dominion is a part of, it exists in the service territory of a neighboring electric cooperative.

“I’m heartened to see major corporations using their purchasing muscle to help break open the Virginia solar market,” said Ivy Main, a prominent blogger on solar and clean energy in Virginia.

Main heralded the Amazon solar system as a “game-changer.” But, she cautioned, “We have to recognize that (Amazon) made that deal in spite of, not because of, state policy and Dominion. “And of course, Dominion immediately moved to buy the project so there wouldn’t be this independently-owned solar farm (near) its territory, threatening its control over all electricity production.”

Dominion has since set its sights on reviving a 20 megawatt solar project in Remington, Virginia it wanted to build on its terms but was rejected last year by state regulators as being too expensive. Today, the Remington solar system is designed as a public-private partnership with Microsoft and the state government. Dominion is to sell the power from the project to the state and then will sell the associated renewable energy certificates to Microsoft to help it meet its renewable energy goals for its data centers.

The Microsoft announcement presaged a third move: the launch by four non-profits along with Microsoft and other technology giants of the Renewable Energy Buyers Alliance. Dominion Virginia Power was quick to champion the group and sent an executive, Stan Blackwell, to participate in an organizing summit in May, according to multiple sources (Blackwell could not be reached for comment).

Northern Virginia is widely viewed to have one of the largest hubs of data centers in the world. Even as lessors of space in data centers, the technology giants could prove invaluable in advocating for solar in future legislative sessions, perhaps even this summer when two legislative subcommittees are meet to consider energy issues.

Together these companies may collectively may become the single, most influential force on Dominion to step up its development of solar energy, said state Sen. Scott Surovell, a vocal co-sponsor of many solar bills.

“In my conversations with them, they’ve indicated a desire to move toward renewable energy because it’s what their customers want.”