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