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The legislation lifts a net metering cap for cooperatives and allows their customers to install larger solar projects.
Electric cooperative customers in Virginia can expand their solar footprint now that both chambers of the General Assembly have passed legislation.
The measure will become law with the expected signature of Democratic Gov. Ralph Northam.
Up until now, the cumulative installed capacity of net metering systems could not exceed 1 percent of the total annual peak load of a cooperative. The new law raises the cap to a cumulative total of 7 percent among a co-op’s mix of residential, nonprofit and commercial members.
Net metering allows co-op members to save on their electric bills by selling excess solar energy they generate back to the co-op.
The legislation also allows residential customers within co-op territory to install enough solar to meet 125 percent of their energy needs. The previous limit was 100 percent.
Mike Keyser, CEO of a distribution electric cooperative — BARC — that serves some 13,000 electric meters in Bath, Alleghany and Rockbridge Counties near the West Virginia border, said that raising net metering caps allows members to pursue innovative renewable energy opportunities.
A provision to raise the net metering cap for customers of investor-owned utilities — Dominion Energy and Appalachian Power — didn’t advance into the final legislation.
Several advocacy organizations that track Virginia utilities’ progress with renewables praised the bill as a path for co-ops to continue boosting solar as many had outgrown the 1 percent cap.
“Co-ops didn’t want to have to tell their members, ‘No more solar,’” explained Will Cleveland, an attorney in the Southern Environmental Law Center’s Charlottesville office. “Expanding the cap allows for solar to grow in their territory.”
The measure also allows co-ops to transition to three-part rates for their net metering customers — a fixed customer charge, a kilowatt-hour charge and a kilowatt demand charge — to ensure that co-ops can recover the costs of operating and maintaining a reliable and affordable electric distribution system, Keyser said.
In a nutshell, monthly demand charges are based on a consumer’s peak demand at any given time. So, the more energy used at that time, the higher the demand charge.
Keyser emphasized that co-ops intend to introduce demand charges very gradually after educating their customers.
“Demand charges will recover each member’s appropriate share of fixed costs associated with the distribution system so that non-solar members do not subsidize those with net metering,” Keyser said.
The measure includes a few other pieces, but its reach was relatively narrow because it was crafted by a non-governmental mediation group created several years ago to halt the stonewalling of solar legislation.
Mark Rubin, executive director of the Virginia Center for Consensus Building at Virginia Commonwealth University in Richmond, is chief mediator for the Rubin Group. He is joined by representatives from the regional solar trade association, co-ops, investor-owned utilities and the environmental community.
Del. Tim Hugo, R-Centreville, introduced the House version of the bill, HB 2547, in early January. He represents counties in northern Virginia. It passed the House unanimously in early February. The Senate passed an amended version last week, 36-4.
Sen. Glen Sturtevant, R-Midlothian, introduced a similar companion bill in the Senate, SB 1769, late last month. Sturtevant represents the Richmond area. It has passed both the Senate and the House unanimously.
The legislation didn’t address net metering with Dominion Energy or Appalachian Power, even though solar industry groups say both of those investor-owned utilities could reach the 1 percent cap within the next year or two.
“Co-ops and investor-owned utilities are in very different places with net metering,” Cleveland said. “This is incremental progress.”
Brianna Esteves is a senior state policy associate with Ceres, a Boston-based nonprofit that works with investors and companies on sustainability issues.
One benefit of the recent legislation, she said, is that net metering customers will continue to receive a return on their solar investment via a credit on their monthly electric bill.
Overall, Virginia’s net metering policy is most beneficial for residential and smaller commercial customers because their electricity needs aren’t as high as data centers and other big electricity users.
As state policy stands now, larger companies can net meter up to 1 megawatt of a solar system they install themselves.
Esteves said Ceres is interested in advancing complementary policies so companies that are too large to benefit from Virginia’s net metering restrictions can have cost-effective access to solar.
“We need more opportunities for those larger customers,” she said. “They should be allowed to shop for renewables.”