Community solar programs are here…. But where are the projects?

Virginia Market

  • No enabling legislation to allow the private market to participate in community solar
  • Pent-up demand for solar in Virginia is creating a specific demand for community solar
  • Community solar options are being pursued by cooperatives and investor owned utilities at various levels
  • Absence of a competitive market will not allow best pricing for consumers of these utility owned options

 DC Market

  • Final of regulations for Community Renewable Energy Act
  • Rooftop leases
  • Low income segment not being adequately served through standard on-premises installations
  • Virginia Status

VIRGINIA MARKET

No enabling legislation allowing the private market to participate in community solar

  • Community solar legislation has been pursued in the General Assembly every year since 2011
  • Agricultural net metering was passed in 2013 and a few projects are underway
  • Both investor owned utilities and cooperatives have expressed concern regarding…
  • Pricing required to create a market for community solar without an in state SREC market or other incentive
  • Non-participants subsidizing participants
  • Billing mechanism
  • Loss of distribution and transmission revenue

 Pent-up demand for solar in Virginia is creating a specific demand for community solar

  • Without any incentives, economies of scale through community solar can provide substantially lower costs than residential rooftop installations.
  • Solarize programs throughout the state have created a market eager for solar.
  • Utilities are seeing demand from members and/or customers and are responding.
  • In the absence of enabling legislation for the private sector, there will be no competitive market for community solar services.

Virginia’s Electric Providers

  • Electricity is provided to retail electric customers by:
  • Three investor-owned utilities providing 84.2 percent of retail sales;
  • Thirteen electric cooperatives providing 11.3 percent of retail sales; nine of the cooperatives purchase power from and are members of ODEC
  • Eight municipal utilities providing 4.5 percent of retail sales.
  • Investor-owned electric utilities include:
  • Dominion Virginia Power;
  • Appalachian Power (American Electric Power); and
  • Old Dominion Power (Kentucky Utilities).
  • The 16 municipal electric utilities, serving customers located in their localities, include:
  • The Cities of Bedford, Bristol, Danville, Franklin, Harrisonburg, Manassas, Martinsville, Radford, and Salem; The Towns of Blackstone, Culpeper, Elkton, Front Royal, Richlands, and Wakefield; and Virginia Tech (serving the Town of Blacksburg).

VA Electr Util Franchises

Virginia projects in development

BARC – 500 kW

  • BARC will build (through a solar EPC contractor), own and maintain a large solar array on behalf of customers who subscribe to the output.
  • Funded in part by a grant of $500,000 from the Appalachian Regional Commission and a grant of $250,000 from the United States Department of Agriculture.
  • Customers have no upfront capital costs and no maintenance responsibilities, while still enjoying all the benefits of solar as if it were sitting on their rooftops.
  • On a first-come, first-served basis, we will offer “solar subscriptions” to the facility’s output, enabling customers to take up to 25% of their annual average energy consumption from the project – at a rate that is fixed for many years
  • If the project oversubscribes before it is built, we will run a lottery and maintain a waiting list for future system expansion.
  • Pricing not established.

 ODEC – 30 MW

  • RFP issue in July for a total of up to 10 MW of PV based solar power from projects ranging in size from approximately 1 MW up to 10 MW.
  • Power purchase agreements should have a minimum term of ten (10) years and a maximum term of twenty.
  • ODEC may wish to utilize any solar facility with which it has contracted as a component of a community solar project with one or more of its members.
  • ODEC has awarded two contracts totaling 30 MWs.
  • Community solar options to member cooperatives and pricing has not been established.

Dominion Virginia Power – 2 MW DCS Rider

  • Qualifying customers may purchase electric energy from a 2 MW Dominion-owned solar facility located in Virginia.
  • Facility to be constructed under blanket CPCN granted to Dominion for the Solar Partnership Program.
  • Allow Dominion to gather information about the appeal of a subscription based solar model.
  • Proposed as an alternate to net energy metering, although not replacing.
  • 100 kWh blocks solar at $4 per block, or 4 cents per kWh in addition to customer’s bill.
  • Cost for program is determined by taking the cost of the energy ($0.141/kWh), then subtracting certain credits to lower the cost for participating customers. These credits are for capacity value ($0.004/kWh), value of energy ($0.046/kWh), and SRECs ($0.051/kWh).
  • Cost of the power ($0.141/kWh) is determined using a regulated cost of service methodology (EPC costs are estimated at $2.10/watt) which is then converted to levelized cost per kWh.

Recommendations for Virginia

Investor Owned Utilities

  • Pilot community solar is promising although at a 4 cent per kWh premium above retail this is not a true option to net energy metering.
  • Credit rates for community solar should be established that provide full value for solar energy and its attributes while ensuring that program subscribers bear all incremental program costs.
  • Private industry should be allowed to develop projects as well to determine a true market index for this product offering.
  • SREC pricing that accurately reflects the market should be used to avoid unrealistic expectations of subscribers.

Cooperatives

  • Continue education of members regarding the benefits of solar and community solar.
  • Listen to members and their request for community solar offerings.
  • Engage the assistance of the private sector to create these programs at lowest cost to members.
  • Fair credit rates for community solar.

DC MARKET   

Issues to address

  • Finalization of regulations for Community Renewable Energy Act
  • Distribution charge not included in credit rate.
  • Real estate is a premium, therefore rooftop leases will be required to satisfy demand.
  • Local and Federal Governments have not been will to open rooftops for private development.
  • Commercial property owners are averse to entering into long term rooftop leases.
  • Minimal returns when compared to risks
  • Uncertainty regarding future use of rooftop space
  • Impact on property value
  • Roof warranty issue
  • Roof replacement costs
  • Despite the efforts of the DC SEU the low-income segment is continuing to be underserved in the DC market with regards to solar energy. A larger proportion of low-income residents in DC are not eligible for installations on their homes.

Recommendations for DC

  • Governments should establish long term programs with scheduled release of rooftop space.
  • Education for commercial property owners regarding risks, cost, and benefits of community solar.
  • Incentives to commercial property owners to create market for rooftop leases.
  • Community solar incentive specifically for low-income market segment.
By | 2015-06-01T17:06:39+00:00 June 1st, 2015|Industry, Policy, Virginia Solar|

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