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Why Virginia lags on solar

Virginia lags way behind neighboring states on solar power. State policies that favor coal are one reason; the other is anticompetitive behavior on the part of Dominion Power.

Solar energy is one of the fastest-growing industries in the country. Solar PV installations grew 109% in 2011, and the industry now employs over 100,000 Americans. Yet it is almost invisible in Virginia. The installed total in the commonwealth is about 5 megawatts (MW), a pittance compared to the 1,200 MW in California and over 800 in New Jersey. Maryland and North Carolina each have more than ten times as much solar PV as we do.

Part of the reason is our lack of incentives. Unlike many other states in the northeast and mid-Atlantic, Virginia offers no tax credits or rebates on solar systems to supplement the federal tax credit. And our voluntary renewable portfolio standard is so flabby that our utilities will never need solar to meet it. 

Virginia also isn’t known for getting out ahead of the curve on energy. Instead of embracing the promise of clean power, the state clings to an old energy model dominated by fossil fuels. Just this year, the General Assembly renewed a subsidy that takes about $45 million every year out of the pockets of taxpayers to support coal mining. 

But as a recent article in the New York Times Magazine described (http://www.nytimes.com/2012/08/12/magazine/the-secret-to-solar-power.htm?src=dayp), the future has come knocking. With the price of solar energy tumbling, solar now makes economic sense across much of the country. New financing models make it possible to install solar with no upfront capital cost to the customer, who may see immediate savings over grid-delivered “brown” energy. 

Among these new models, leases have become especially popular for homeowners and businesses, but only power purchase agreements (PPAs) allow non-profits to take advantage of tax credits. Under a PPA, the solar installer retains ownership of the solar system and uses the tax credits to offset profits, passing along the savings as it sells the power to the nonprofit. 

PPAs could permit the solar market in Virginia to blossom in a big way. Colleges and universities, private schools, churches, charities and local governments are now looking at solar systems as a way to meet carbon-reduction targets and reduce energy costs over the long haul. 

Unfortunately, this new enthusiasm has run headlong into the immovable force known as Dominion Power. Dominion blocked a PPA at Washington & Lee University last fall, and its threat of legal action has kept other non-profits from moving forward with plans for solar installations. 

Dominion is a regulated monopoly in Virginia, a status that gives it the sole right to sell power in its territory, with a few exceptions. One of the exceptions gives sellers of 100% renewable electricity the right to sell to Dominion’s customers if the company itself doesn’t offer that option—which, indisputably, it does not. (Its Green Power Program relies on certificates, not actual green electricity.) 

So Dominion’s interpretation of the statute appears to be wrong on its face, but one of the nice things about being a giant monopoly is that you have more lawyers and more money than the people you threaten.  

Unable to fund a lawsuit, the solar industry tried last year to get relief from the General Assembly in the form of HB 129, a bill that would have made explicit the right of renewable energy companies to sell power to their customers through PPAs. Delegate Jerry Kilgore (R-Gate City) shepherded the bill through the House, where it passed without a single dissenting vote. Once in the Senate, though, it was “carried over” (effectively, killed) by a Senate committee stacked with Dominion allies like Dick Saslaw (D-Fairfax) and Chairman John Watkins (R-Midlothian). 

Quick quiz, but not a toughie: according to the Virginia Public Access Project, www.vpap.org, who is the top donor to the campaign chests of Dick Saslaw and John Watkins? 

The failure of HB 129 leaves a lot of would-be solar and wind customers in limbo, keeps Virginia companies from growing and adding jobs, and prevents churches, colleges and universities from benefiting from the federal tax credits that are available to residents of other states where PPAs are common. 

It has also given Dominion a black eye with the public and local officials. Critics say the heavy-handed effort to squash small solar companies shows the utility giant has grown overly complacent about its status as the most powerful force in Richmond.  

Dominion should back down from its unreasonable opposition to PPAs. It has little to lose by allowing private companies the space to compete and innovate in a market Dominion itself doesn’t serve. And if it won’t back off, then the public needs to remind its legislators who they serve. Hint: it’s not supposed to be Dominion. 


This post is contributed by a community member. The views expressed in this blog are those of the author and do not necessarily reflect those of Patch Media Corporation. Everyone is welcome to submit a post to Patch. If you'd like to post a blog, go here to get started.

Kevin Chisholm September 06, 2012 at 04:02 PM
Ivy, Thanks for starting a blog on such an important issue. Part of America’s problem with bringing sensible solutions to our energy dilemma is that there are so many ways to do it. The possibilities of conservation and efficiency alone are huge and largely under realized. If only we could see combustion gases, it would help. If the Commonwealth of Virginia wants to be proactive on this, I am all for that. Personally, I prefer that we go forward as a nation with a comprehensive energy policy that is as government light as possible. Kevin Chisholm Candidate for Virginia’s 10th Congressional District www.chisholmforcongress.com
Rob Jackson September 09, 2012 at 03:10 PM
Ivy, I sense Dominion is arguing the statute that re-regulated retail electricity on a monopoly basis blocks third-party power producers from having access to retail customers. As I recall, the former law permitted retail customers to purchase power from any licensed supplier, but that was repealed when the competition didn't arrive. Dominion is likely taking the position that, since it again has an obligation to serve all consumers within its territory, it has the right to keep out competitors that could cream skim. But I think that argument carries only when the competitor is offering lower prices to selected consumers. My guess is that solar power is still somewhat more expensive per kWh than "conventional" power. If so, it's hard to buy the "cream-skimming" argument. Moreover, to the extent consumers buy the higher-priced solar power, Dominion can postpone its need to add additional and expensive added capacity. If my assumptions are correct, I think you can also make some arguments in favor of your position based on traditional public utility policies.
Ivy Main September 09, 2012 at 07:31 PM
Hi Rob. Your assessment is pretty spot-on. The history is complicated, far too much to go into in an article anyone would want to read, but essentially Dominion thought it had closed off the option for third-party providers when it implemented its Green Power Program, only to be told by the SCC that its program didn't count because it relies on renewable energy certificates rather than actual power. So Dominion tried to shut out third parties through language in its tariff. Interesting legal question whether it can do so. Anyway, I agree with you that it should be obvious that the independent solar providers are not big enough to be a threat to Dominion's monopoly, and the value that solar distributed generation brings to the grid outweighs the small loss of business. The real problem, I think, is that monopolies by nature abhor competition of any size.
Clive Roux October 10, 2012 at 02:15 AM
We're really close on the price of grid electricity versus solar power now and likely to cross next year. Just comparing the price doesn't tell the whole story.Roof mounted solar doesn't go up from the time you install it whereas electricity prices are projected to increase 8-10% for the foreseeable future. What you pay today remains the price you pay for at least the next twenty five years when you install a solar system on your roof. In addition, after about 17 years when you have paid off the system, all your electricity is free for the next 7-15 years. It gets better. When you buy electricity from Dominion, at least 2/3 of the power you are paying for was lost in transmission. However, they still had to use coal, gas and resources (plus millions of gallons of water) to produce 3 times what you actually use with all the harmful environmental effects they cause. Think hard about investing in solar, it has so many advantages. Best of all, it reduces dependency on a central form of electricity generation and you won't have to sit for five days without power next time there is a giant storm and with global warming, they are going to become more frequent. Please note, I thought Dominion did a stellar job getting us all back on line this summer with the storms. Thank you for that. There is some really good information on the website Live Green at http://www.livegreen.cc/2012/10/08/home-owners-you-have-a-huge-part-to-play-in-protecting-the-environment/

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