News > Virginia passes landmark solar legislation

Virginia passes landmark solar legislation

• Energy democracy & policy

March 10, 2020

• Ben Delman

When solar supporters join together, we win. And we won big in Virginia last week. Lawmakers passed the Virginia Clean Economy Act (VCEA). This legislation is a tremendous step forward for Virginia’s transition to clean energy. It will help thousands of Virginians benefit from solar.

It will do so in two ways. It creates incentives for Virginians to go solar. And, it removes unnecessary barriers that make going solar difficult.

Creating solar incentives:

Sets a 100% clean energy standard

• VCEA requires Virginia’s two largest monopoly utilities, Dominion and Appalachian Power, to stop selling electricity generated from fossil fuels. Dominion’s target date is 2045. Appalachian Power’s is 2050. They also have to meet specific targets along the way.
• Utilities pay a fine for not reaching these these targets. VCEA targets include standards for the amount of clean energy utilities must use. It also sets targets for different sources of clean energy they must use.

Creates a market to encourage solar adoption

• Solar owners benefit because the solar they generate is now valuable to utilities. Utilities can avoid paying fines by purchasing “Solar Renewable Energy Credits” (SRECs). Solar owners generate these credits based on how much energy their system produces. VCEA sets aside specific targets for rooftop solar that utilities must meet. This will help more Virginians take control of where their energy comes from.
• SRECs provide an additional way for solar owners to make money. Selling SRECs can help solar owners shorten the time it takes to pay off the cost of going solar. Shortening this time period makes solar a more attractive option for more people.
• VCEA helps low-income families benefit from solar as well. The law sets aside credits utilities must purchase from low-income households.

Removing barriers:

Allows for more solar generation

• Ensures solar owners receive fair compensation for their solar. Net metering is the system utilities use to credit solar homeowners for the electricity they produce, but don’t use themselves. Current law allows Dominion and Appalachian power to stop allowing homeowners and business to use net metering once solar supplies more than 1% of the electricity on the grid. The amount of electricity that is on the grid is well under 1% in most of Virginia right now. But this will change as VCEA encourages more people go to solar. VCEA ensures new solar customers will be able to net meter. It lifts the cap to 6%. Of this, 1% is reserved for low-income customers.This is a 21.38 kW system. It is now legal to build a system of this size for residential use.
• Permits larger solar systems. The bill increases the total size of solar systems built that can be built in Virginia. It raises the limit for residential systems from 20 kW to 25 kW. It raises size limits on commercial properties from 1 MW to 3 MW. We’ve seen a few residential customers and many more commercial ones who would have built larger systems but for this cap. 1 MW = 1,000 kW.
• Removes unfair fees for many solar installations. Utilities were able to impose additional fees on solar owners with systems larger than 10 kW. We’ve spoken to many solar homeowners want systems of this size, but are discouraged from doing so because of these charges. Utilities impose these charges to discourage customers from investing in their own energy production. VCEA raises this limit to 15 kW in Dominion territory. It completely removes these fees in Appalachian Power territory.

Expands the ways you can use solar

• Makes it easier to power an electric vehicle with solar. VCEA lets solar owners in Dominion territory purchase a system that covers 150% of their annual electricity usage. This gives homeowners the freedom to buy a solar system that allows for the future purchase of an electric vehicle. Previously, solar owners were only able to size a system to produce 100% of their annual consumption. This allows solar owners to size their systems so their electric vehicle can run on the sun, even if they don’t yet own one.
• Helps non-profits go solar. VCEA expands access to a financing mechanism called third-party ownership. Third-party ownership allows individuals, businesses, or organizations to host a system on their property without paying the full upfront cost of a system.  It’s great for non-profits. These institutions can’t take advantage of the federal solar tax credit since they do not pay taxes. With third-party ownership, the system owner can take the tax credit and pass savings along to the host. Host sites are often able to purchase the electricity a system generates at a rate lower than what they were paying for electricity from their utility. A similar effort to expand third-party ownership came up just short across the border in West Virginia.
• Adds more than 3 million panels worth of solar in Dominion territory alone. Current rules cap the total amount of solar that can be owned under third-party ownership at 50 MW in Dominion territory. VCEA raises it to 1,000 MW. VCEA expands third-party ownership from a 3 MW pilot to 40 MW in Appalachian Power territory. Further, it launches a 20 MW pilot in Old Dominion Power Territory in Southwest Virginia. Currently, there is about 800 MW of solar installed in Virginia. These programs alone will more than double the amount of solar in Virginia.

Why it happened:

• Virginia’s community of solar supporters has worked for years to achieve legislation like this. We built support for solar house by house and community by community.
• A broad coalition came together to support solar and renewable energy. This included the Maryland, D.C., Virginia Solar Energy Industries Association, Advanced Energy Economy, Sierra Club, the League of Conservation Voters, Chesapeake Climate Action Network, and Vote Solar.
• You took action. Solar advocates sent hundreds of emails and made 83 phone calls to legislators asking them to support this landmark solar legislation.

Bigger picture:

• VCEA wasn’t the only important solar bill to pass. Lawmakers also approved legislation to protect homeowners who live in a homeowners association from unfair restrictions to going solar. And, they passed a Solar Freedom bill.
• The Solar Freedom bill allows people who live in apartment buildings or condos share electricity from an on-site solar system (Note: This only applies to Dominion territory.)
• The bill also allows Fairfax County to build a 5 MW solar project on a closed landfill. It will use the electricity generated to provide electricity to county facilities.

Next steps:

• Governor Ralph Northam is expected to sign the bill, making it law.
• There are still important details to come. We won’t how valuable the renewable energy credits will be until they start to trade on the market. This will go a long way to determine how many Virginians can benefit from solar.
• And, monopoly utilities still want to maintain control of our energy system. VCEA will help more Virginians go solar. We can build an even larger army of solar supporters to fight back.