When the Virginia Clean Economy Act became law in 2020, solar advocates celebrated. In addition to creating a framework for transitioning to a carbon-neutral electricity sector by 2050, the VCEA and sister legislation known as Solar Freedom removed many barriers to installing solar energy in Virginia. Among the new provisions were some that enhanced net metering, the program that allows residents, businesses and local governments who install solar on-site to capture surplus electricity that they feed back to the grid.
currently, Law Requires that Dominion Energy and Appalachian Power customers be credited for the electricity they supply to the grid at the full retail price of electricity. The credit is applied against the cost of the electricity they draw from the grid at night. This policy makes solar energy affordable and supports small businesses throughout Virginia.
However, the VCEA came with a time bomb. It states that in 2024 for Appalachian Power, and 2025 for Dominion, the State Corporation Commission will hold proceedings to determine the fate of net metering, and in particular the terms of compensation for new net metering customers.
Well, it’s 2024, and the bomb has just gone off. On May 6, the Supreme Constitutional Court issued a decision to request Directing the two services to submit the proposed changes. Appalachia’s proposal is scheduled to be submitted by September 2; The Dominion case is scheduled to be filed by May 1, 2025. The SCC will establish a timeline for each case that includes provisions for public and interested party participation.
There are two important protections to note. First, low-income customers will have the choice of installing solar under the current rules or the new rules. Second, customers who install solar panels and interconnect to the grid before the SCC issues its final order will continue to be covered by existing retail net metering provisions.
For anyone who has been on the fence about installing solar, I cannot overstate the importance of action now. Non-profit organizations Neighbors United Solar And Solaris Virginia It can help you get the best deal. Also check out excellent tips and sample quotes from Human Resources Climate Center.
Make no mistake, Utilities hate net metering They will destroy it if they can. The more customers install solar, the less control utilities can exercise over them — and, more importantly, Less money The company gains for its shareholders by building the new generation and transmission.
This is not what our facilities are telling lawmakers and the Supreme Constitutional Court. Instead, they promote a narrative that net metering customers impose additional costs on other ratepayers, creating a “cost shift.” The idea is that residents who use solar energy make everyone else pay more for the grid while they themselves collect money by getting free electricity from the sun.
This argument has raged across the country for years. Utilities often argue that solar customers should only pay for their surplus electricity the amount of money the utility would have had to spend to generate or buy the same amount of electricity elsewhere. This “avoided cost” can be less than a third of the retail price of residential electricity.
With a recovery period of nine to 15 years In Virginia, residential solar is a reasonable investment with retail net metering, but it’s hardly a get-rich-quick scheme. Lowering the net metering rate would negate the energy savings homeowners see from solar today, Brandon Braylo, Virginia program manager for Solar United Neighbors, said in an email.
“The full 1:1 retail value of solar is what allows solar to not only be a small purchase that suits a certain demographic, but something every homeowner can benefit from,” he noted.
Braylo added that the loss of net metering would also hit solar installations in Virginia hard and lead to job losses, something she emphasized with industry members. Ross Edwards, president of Charlottesville-based Tiger Solar, says any devaluation of solar would have a “largely negative” impact on local businesses like his that serve the residential market.
But the “cost shift” argument doesn’t actually depend on whether rooftop solar is affordable for customers or profitable for installers. The way utilities think about net metering, a homeowner could lose money on solar and still be guilty of shifting grid maintenance costs to other customers.
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Net metering proponents counter that rooftop solar provides valuable benefits to the grid and other customers that utilities ignore, such as relieving grid congestion and reducing the need for utility investments in new generation and power transmission. Solar energy also has greater societal benefits such as increased energy security, local resilience, cleaner air and reduced carbon.
Over the years, this dispute has spawned dozens of such disputes studies Estimating the value of solar energy. Michigan study is found That instead of being subsidized by other taxpayers, residents who install solar are actually subsidizing their neighbors who don’t have solar. Closer to home, a Maryland The study also concluded that distributed solar provides greater value than the cost of retailing energy.
But every state is different. California Public Utilities Commission recently reduced The net metering rate is down to a so-called avoided cost, in part because the state’s explosive growth of solar power has led to a glut of midday power. The residential solar market has collapsed as a result of the PUC actions, with an estimated 17,000 Jobs lost In the solar energy industry.
Virginia doesn’t have California’s problem. With just about 6.5% of solar-generated electricity and the world’s largest energy storage facility in the form of Bath County Pumped water Rooftop solar continues to help Virginia utilities meet peak demand. We are also facing increasing demand for electricity from Data centerswhich works for all the clean energy we can generate.
Ten years ago, Virginia embarked on a study of the value of solar energy, led by the Department of Environmental Quality. Unfortunately, our facilities Withdrawn When they didn’t like what they were seeing, so the study never progressed beyond framing the issues.
Since then, Dominion and APCO have often repeated the “cost shift” narrative, but never supported it with evidence. Their efforts have had some influence with lawmakers, most recently by passing a law invoice Instructs the SCC to “make all reasonable efforts to ensure that the net energy metering program does not result in unreasonable cost shifting to non-participating electric utility customers.”
But of course, this raises the question of whether the cost shift is actually happening. Under the VCEA, the SCC will now have to “evaluate and determine” the amount a net metering customer must pay for the “cost of use of utility infrastructure,” and the amount the utility must reimburse the customer for the “total benefits” the availability of solar panels to the customer . The SCC is also required to evaluate and determine “the direct and indirect economic impact of net metering” and to consider “any other information the Committee deems relevant.”
This other information is supposed to include state information Energy policy. The policy specifically supports distributed solar energy, including “enhancing the ability of private property owners to generate their own renewable energy for personal use from renewable energy sources on their property.”
The SCC will now have to navigate these conflicting positions in what is sure to be a controversial proceeding. Meanwhile, residents and businesses are advised to install their own solar panels this year.
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