Customers of Appalachian Power Co. will be able to purchase solar power directly from independent providers, but it may not save them as much money as some had hoped.
Nor will it happen anytime soon, following Gov. Glenn Youngkin’s approval this week of a law that sets the framework for the so-called shared solar program.
Shared solar allows people who are unable to install solar panels because they live in apartments or homes that don’t get adequate sunlight – or who can’t afford such projects – to purchase some of their electricity from a solar farm operated by a private company.
Customers who choose to participate get a credit on their electricity bill for the cheaper renewable power they purchase.
But under the law, they must pay a minimum bill to their utility to cover its costs of maintaining the grid through which all power is delivered, whether it’s from the sun and wind or the more traditional methods of burning coal and natural gas.
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The amount of the fee for Appalachian customers – to be set later by the State Corporation Commission – will likely determine whether it makes financial sense to participate in the program.
Dominion Energy, which has a shared solar program approved by the General Assembly in 2020, charges about $62 a month for an average residential customer, spokesman Aaron Ruby said. The law exempts low- to moderate-income customers from the fee.
The minimum bill is too high to attract many Dominion customers, meaning that the company’s shared solar programs for the most part are limited to lower-income users, according to Charlie Coggeshall, Mid-Atlantic regional director for the Coalition for Community Solar Access.
Legislation passed this year and signed late Monday by Youngkin expands the program to Appalachian customers. However, it does not spare lower-income customers from having to pay the yet-to-be-determined minimum bill.
The law offers some protection to those who struggle to pay their power bills, such as providing a minimum savings of 10%. But Coggeshall said many details have yet to be ironed out.
“We’re cautiously optimistic about the potential, but there’s definitely a lot of work to be done,” he said. “We had much different expectations going into the session, and we had to scale back those expectations.”
Considering the complexity of the program, Coggeshall said, it will likely be about two years before shared solar becomes available to Appalachian customers.
The law requires the SCC to establish a program for the utility by the first of next year. Appalachian then gets another six months to submit details on how it will be implemented.
Developers will then need additional time to come up with options for customers and to build facilities. In competitive shared solar markets, Coggeshall said, developers must be able to pass along the savings to participating customers.
“Projects require subscribers in order to achieve cost recovery. A project developer will almost certainly not pursue the development of a project if they don’t think the economics are strong enough to ensure it’s creating a savings product for the customer,” Coggeshall wrote in an email.
“While there may be some idealistic consumers willing to pay more to support renewable energy, you ultimately need to ensure there are financial savings for the average customers in order to drive consistent (and financeable) participation,” he wrote.
Legislation passed this year – which also expands Dominion’s existing shared solar program – includes new language that requires the SCC to consider the benefits of such initiatives to the electric grid and to the state when it calculates the minimum bill for both utilities.
It’s too soon to say whether that and other factors, such as grant money from the Environmental Protection Agency, will make the program more financially attractive to all customers, Coggeshall said.
For Dominion, development of the program, also known as community solar, has moved slowly since it was approved by lawmakers four years ago. The first facility just came online in February. There are currently less than 1,000 subscribers, Ruby said.
Participation is capped at the customer’s annual usage, meaning they can’t subscribe for more electricity than they use in their home.
Past efforts to expand the program to include Appalachian customers have met some opposition from the utility, which serves about 540,000 customers in Western Virginia.
Lost revenue caused by the program could force customers who don’t sign up for shared solar to bear a greater share of the costs of providing electricity, the utility has said. Those concerns were addressed by this year’s legislation, company spokeswoman Teresa Hall said last month.
Appalachian, which for decades has relied on fossil fuels to produce about 80% of its power, is being pushed to transition to renewable energy by laws aimed at reducing climate change.
Although the option won’t be immediately available to Appalachian customers, shared solar is coming sooner to a part of Botetourt County served by Dominion.
The county Board of Supervisors approved a proposal last September by TotalEnergies Renewables USA, which says it plans to install 11,160 solar panels on about 17 acres of pasture outside Buchanan.
The solar farm will operate through Dominion’s Community Solar Pilot Program, which makes the energy available to lower-income customers, TotalEnergies officials said at the time.
A company official said recently that construction is scheduled to start later this year.