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State regulators are expected to release final rules soon for a new shared solar program expected to launch in 2023.
During a summer 2019 visit to his vacation house in New York’s Adirondack Mountains, Scott Surovell clicked on an ad for community solar. He signed up in five minutes. Soon after, he learned that tapping into an off-property array would about cover his entire electric bill.
“We need this in Virginia yesterday,” the Democratic state senator who represents a district near Washington, D.C. noted in a social media post that autumn. Then, he set about deploying his legislative chops to create a bill heavy on accessibility and equity.
Fast forward to today. Virginia utility regulators are on the verge of releasing their final version of a shared solar program outlined in a bill Surovell shepherded through the General Assembly earlier this year.
The State Corporation Commission published its proposed regulations on Sept. 21. The deadline for the release of the final rules is Jan. 1.
In a nutshell, Senate Bill 629 calls for establishing a program allowing customers in Dominion Energy territory to buy solar power via subscription from a shared power facility owned by a third-party entity. It’s identical to HB 1634.
Initially, the program will be capped at 150 megawatts. Both solar and environmental justice advocates are lauding a measure requiring that at least 30% of the enrolled customers qualify as low-income. If that subscriber bar is met, the program could add 50 more megawatts.
No single project can be larger than 5 MW. That is likely a model for a series of small-scale distributed generation projects starting at roughly 1 MW and rolled out in increments.
Rachel Smucker said the new regulation — set to debut in 2023 — opens an opportunity for Virginia to lead on delivering solar to low-income communities.
She is the Virginia policy and development manager for the solar trade association that also serves Maryland, Delaware and the District of Columbia. Her group recently changed its name to the Chesapeake Solar & Storage Association.
“I think there’s a lot of interest from the industry to dig into this program,” Smucker said. “They have even said the 150-megawatt cap is too small. Solar developers are interested in taking the shackles off of the program on the capacity side. The onus is on all of us to make sure we get this set up right.”
Surovell, in his second Senate term serving Fairfax, Prince William and Stafford counties, discussed SB 629 as a panelist at Solar Focus, the association’s virtual conference in mid-November.
The idea of growing solar gardens in his home state had intrigued him since 2010 when, as a newly elected House delegate, he learned about such endeavors in Colorado. In a July letter to the State Corporation Commission, he said his legislation would enable people and businesses to purchase solar power and net the energy against their home meters.
Access to non-rooftop solar, he wrote, was especially crucial to people in neighborhoods with heavy tree cover, those subject to homeowner association restrictions and residents in apartments or condominiums.
In that same letter, he emphasized ensuring that shared solar didn’t solely benefit the wealthy.
“Creating a program that is easy for low and moderate income consumers to participate [in] will be essential to the success of this initial phase,” he wrote. “The legislation was intended to provide equal and equitable access to renewable energy and critical cost savings to Virginia consumers who have faced barriers to accessing the green economy.”
Del. Lashrecse Aird, D-Petersburg, sat on the same Solar Focus digital panel with Surovell. Last year, she spearheaded separate legislation (HB2741) designed to expand solar access to those with fewer resources. It called for the creation of a Clean Energy Advisory Board, tasked with setting up a solar financing platform for households with low to moderate incomes.
“Ultimately, this is about people,” Aird said about the crux of Surovell’s legislation. “What’s critical to me is pushing regulators to get this right.”
Advocates: ‘Like Netflix for solar’
Democratic Gov. Ralph Northam revised SB 629 to define low-income customers as households whose income is no more than 80% of the median income in that particular locality. Some advocates have suggested that figure be adjusted to take into account Virginia’s broad economic differences as well as differences in housing types.
Setting income limits matters, Smucker said, but it’s equally crucial that regulators figure out how to connect poorer households to solar gardens. That requires linking with existing affordable housing programs and having continued conversations with community leaders via a stakeholder working group.
“This should be like Netflix for solar,” she said about ease of enrollment. “We want to maximize its reach to communities that could really benefit.”
Ideally, she explained, that means that households would have multiple pathways to verify their income, would be able to register online and wouldn’t be penalized for unsubscribing.
Advocates also want the State Corporation Commission to revisit two other parts of the regulation commissioners rolled out in draft form. One is the annual reset of the minimum charge solar customers would be required to pay and the other is how customers will be credited on their monthly bills for the solar energy they use.
During the legislative session, some lawmakers threatened to withdraw support from Surovell’s measure unless he included a minimum bill charge to cover the cost of serving customers and administering the program.
“The minimum bill was a sore point,” Surovell told Solar Focus attendees about claims that solar customers are unfairly exempt from basic utility infrastructure and upkeep costs.
“They claim there’s a cost shift that happens and non-solar customers bear more of that burden than solar customers,” Smucker said. “But we haven’t seen any data for that claim, so we don’t subscribe to that notion.”
However, because the requirement is built into the legislation, she said a charge of $8 to $10 would be reasonable.
“The [State Corporation Commission] makes the final ruling,” she said. “But if it’s $40, that’s restrictive and you won’t find subscribers. Investor interest won’t be there if it’s astronomically high and that will quickly erode the potential of the program.”
The state Department of Mines, Minerals and Energy didn’t counter that argument. It classified as “inappropriate” any infrastructure fee because “there will be no change in the infrastructure required to service the customer’s location.”
The department “recommends that the operational reality of the shared solar program is reflected in the regulations to prevent inappropriate costs from being included in the minimum bill,” the agency wrote in Nov. 2 testimony submitted to the commission. “The lack of detail on the content of the minimum bill combined with the intention to hold an annual proceeding wherein the amount of the minimum bill could be altered could create uncertainty for developers and consumers.”
In addition, the department joined solar advocates in prodding utility regulators to remove restrictions on bill credits for shared solar customers.
Appalachian Voices and the Southern Environmental Law Center called for customers to be permitted to roll over their bill credit, month to month, as long as the bill credits don’t exceed a customer’s average annual bill.
All backers of the shared solar program are hopeful that preliminary groundwork can begin next year so the program is ready to launch by 2023.
“Interconnection can take up to a year in Virginia and permitting can also take a long time,” Smucker said. “That’s why we’ve been pushing for projects to be allowed to attract customers to the program in 2021.”
Other community solar program fizzled out earlier
Industry veteran Myles Burnsed of Charlottesville said in an interview that his company, EDF Renewables Distributed Solutions, is interested in the prospect of developing, owning and operating the third-party projects envisioned in Surovell’s law. EDF would likely connect with a separate company to manage and subscribe customers.
Burnsed, vice president of strategic development, said he’s watched similar solar programs launch in other states with varied levels of success. Like others in the industry, he noted that it can take years to smooth the kinks and unexpected challenges that arise.
“It will be challenging, but it will attract people,” he said, adding that eventually quadrupling the size of the Virginia program to 600 MW would generate “a lot more interest and competition.”
EDF, an international company with a three-decade presence in North America, is already partnering with a Virginia rural electric cooperative to develop a 3.1 MW community solar project in Shenandoah County. That’s enough energy to power 570 homes annually.
Plans call for breaking ground for the array on 32 acres of farmland early next year and signing up customers by year’s end.
“We’re still super early on in the process,” said Morgan Messer, spokesperson for Shenandoah Valley Electric Cooperative, a distributor for Old Dominion Electric Cooperative. “This is still a pilot, so what the subscription process looks like we don’t know yet. We haven’t yet outlined any of the qualifications.”
Other co-ops in the state also have succeeded with community solar projects — unlike Virginia’s investor-owned utilities. A program the legislature rolled out several years ago geared for customers at Dominion and Appalachian Power never gained a foothold. It required utilities, not third parties, to own the solar projects.
“On that first go-round, there weren’t any projects,” Burnsed said. “It seems to have fizzled out.”
Senior attorney Will Cleveland, who specializes in utility issues for the Southern Environmental Law Center, wants to avoid a repeat of that debacle.
“Presumably, [shared solar] will work better than the thing that never happened at all,” Cleveland said. “Before, neither utility ever rolled out a program. By that measure, it was a complete failure.”