State-level incentives for shared solar programs, or “community solar” projects, are critical to establishing an equitable and reliable transition to a clean energy economy. A well-thought-out shared solar program ensures everyone can access clean energy resources. Unfortunately, many states still lack legislation that encourages and facilitates the development of these universally advantageous solar projects. In this blog, we’ll review the results of a shared solar study conducted in Virginia and how proposed policy changes to the state’s solar legislation would positively impact all Virginians.
Check out our website or watch our videos for a basic understanding of how shared solar programs make it easier for anyone to participate in the renewable energy revolution and save money – even if you’re unable to install rooftop solar on your property due to high upfront cost, roof constraints, or the fact that you rent.
The number of states with policies that support third-party community solar has risen over the past decade from just a few to 22 states and Washington, D.C. Many of these programs contain measures supporting low-to-moderate (LMI) income customers – whether by providing additional funding for projects that subscribe LMI customers – or by requiring projects to subscribe a certain percentage of LMI residents or organizations that serve LMI communities. With these existing policies, the US collectively installed 6.2 gigawatts (GW) of shared solar generation capacity through the end of 2023. According to The Solar Energy Industries Association (SEIA) and Wood Mackenzie, community solar installations should reach nearly 14 GW of cumulative capacity by 2028, not factoring in the possibility of any new shared solar programs.
Market analysis shows that it would be in states’ best interest to enact legislation that supports the growth of new and existing community solar markets. A November 2023 study conducted by Dunsky Energy on behalf of the Coalition for Community Solar Access (CCSA) found that Virginia regulators have overestimated the costs and underestimated the benefits that Virginia’s Shared Solar Program brings to utility grid infrastructure. In Virginia and other states alike, small-scale distributed energy resources, such as shared solar projects, can strengthen the electric grid and make it more resilient while avoiding costly investments in transmission and distribution infrastructure.
The Commonwealth of Virginia passed legislation for its Shared Solar Program in 2020, enabling customers of Dominion Energy Virginia to subscribe to offsite, front-of-meter, or “virtual” shared solar projects. The program initially allowed 150 MW of shared solar capacity to connect to Dominion Energy’s grid infrastructure, and that figure increased to 200 MW in subsequent years. This program has already approved 150 MW of capacity for development, with a growing waitlist forming to develop the remaining 50 MW. With a complete list of active, or soon-to-be active subscribers, this program can be seen as an overwhelming success. But, according to the CCSA analysis, Virginia’s shared solar subscribers are being undercompensated for participating in the program.
The CCSA report shows that when taking a comprehensive view of shared solar benefits – including avoided generation, transmission, and distribution costs – the value of this shared solar program as an investment in Virginia’s clean energy future is “undeniable.” New legislation seeks to expand the program statewide, allowing Appalachian Power's over 500,000 customers across the western part of the state to reap the benefits of a new clean energy economy. The CCSA study predicts that if shared solar were extended into Appalachian Power territory and expanded to 2,000 MW between Appalachian and Dominion, the minimum bill could be reduced by 80% and still provide $365 million in benefits to the utilities between 2024 and 2050.
Virginian politicians are proposing policy changes that could expand their shared solar program and unlock access to more Virginian citizens. According to the original legislation signed into law in 2020, Dominion’s shared solar subscribers have to pay a minimum monthly bill to the utility that is based on the customer’s subscribed kWh of generation, averaging $62 per month for residential customers. This minimum bill requirement is among the highest in the country and, for many customers, makes the program cost-effective only for low-income customers who are exempt from this requirement.
The CCSA report directly contradicts utility claims that the current highly burdensome minimum bill is necessary to make sure solar subscribers pay their fair share of the grid. Instead, the report found that the current compensation for shared solar in Virginia does not fully reflect the value the program brings to the utilities and all ratepayers. As they currently stand, the minimum bill requirements in Virginia are dissuading developers from wishing to take part in the program. We are keen to see if the utilities are willing to budge on the calculation of this amount in light of the CCSA report findings.
As the nation moves towards a cleaner energy future, embracing and improving shared solar-friendly policies will play a vital role in realizing the sweeping benefits of shared solar. As Virginian politicians continue to fight to address the lingering issues within its existing shared solar legislation, we should be encouraged by the possibility that these new laws might expand the state’s shared solar program and include additional project incentives for projects located on rooftops, brownfields, or landfills, as well as projects that are dual-use agricultural facilities.
Contact us today to learn more about supporting shared solar policies in your state or building a shared solar array on your property.