Bills Increasing Small-Scale Solar Requirements in Virginia Awaiting Action by Youngkin

RICHMOND, Va.—It’s all eyes on Virginia Republican Gov. Glenn Youngkin now to take action on a number of bills aimed at increasing renewable energy development in the state and utility customer savings. 

Among the bills Youngkin must act on by midnight Monday is a measure sponsored by Del. Katrina Callsen (D-Charlottesville) and Sen. Schuyler T. VanValkenburg (D-Henrico) aimed at increasing small-scale solar projects. 

The bill updates the Virginia Clean Economy Act (VCEA), which Democrats passed in 2020 to require the state’s two largest utilities, Dominion Energy and Appalachian Power Company, to comply with a Renewable Portfolio Standard, or RPS.

To comply with the VCEA, the utilities currently must acquire renewable energy credits, or RECs, which are created when electricity from solar and wind sources is generated. Those renewable credits must be acquired in increasing amounts that equal 100 percent of Dominion and Appalachian Power’s electricity sales by 2050.

As part of that requirement, there’s an incentive for a diverse mix of generation sources around the state, instead of relying on large, or utility-scale, solar projects that take swaths of Virginia’s coveted rural farmland. Currently, one percent of the Renewable Portfolio Standard  requirements in a given year have to come from small-scale solar, wind or renewable gas projects that produce up to one megawatt of electricity, known as distributed generation. 

Under the Callsen and VanValkenburg bill, those requirements would get bumped up to three percent in 2026 and five percent in 2028. Then, in 2029 through 2031 and every three years after, the Renewable Portfolio Standard’s  percentage would be set by the State Corporation Commission, which regulates Virginia’s utilities, while considering “the availability of RECs from such resources in the market and the future market expansion of such resources.”

Also, the size of the distributed generation sources that are eligible would be increased to 3 megawatts, and include behind-the-meter projects that can be installed on the roof of a residential home or business to produce their own electricity and offset their bills.

Jim Purekal, a director with Advanced Energy United, said in an interview while pushing back against concerns over increasing electricity costs that, “added expenses are not a result of the VCEA. It’s a result of escalating fuel prices (and) storm recovery costs from Hurricane Helene.” 

Generation Buildouts

The bill makes other changes to the VCEA. As currently written, the landmark law on renewable power requires the utilities to build 16,100 megawatts of solar or onshore wind, the latter of which largely has yet to be explored outside of one project in Southwest.

Of that, 200 megawatts currently needs to come from “previously developed sites.” The bill on Youngkin’s desk would increase that requirement to 600 megawatts. Along with the behind-the-meter projects that could go on resident rooftops, the change would avoid building on “several thousands” of farmland acres, explained Josephus Allmond, an attorney with the Southern Environmental Law Center.

Currently, the VCEA’s 16,100 megawatt requirement stipulates that 65 percent must come from utility-owned sources, with the rest coming from third-party developers through power purchase agreements, which advocates say are cheaper ways to deliver electricity since utility-owned projects are recovered from ratepayers with a 9.7 percent profit margin, thereby increasing the cost. 

The Callsen and VanValkenburg bill would flip that percentage to 65 percent needing to come from PPAs.

“That’s big,” said Purekal.

Parking Lot Solar 

Adding to the mix on solar development is legislation sponsored by Del. David Bulova (D-Alexandria) that would give localities the option of requiring developers to build solar arrays above nonresidential surface parking areas with 100 spaces or more, covering up to 50 percent of the parking area. Exceptions could be made if the canopy would inhibit uses and densities otherwise allowed by local ordinances.

Bulova pointed to the Washington Commanders, whose stadium is outside Washington D.C. in Maryland, already having solar canopies, which can also keep cars underneath them cool.

“Those canopies are actually enough to power the entire complex on a non-game day, and 20 percent of the complex on a game day,” said Bulova. “By no means a silver bullet, but it does provide our urban localities with a very meaningful way in order to be able to meet our energy challenges.”

The project would follow the state’s interconnection or net-metering rules. 

While environmental groups and the Virginia Farm Bureau sided in support of the bill as a way to avoid taking up farm space, Sarah Thomas, on behalf of the Virginia Association for Commercial Real Estate, voiced opposition to the bill because of the cost, despite researchers saying contracts can overcome upfront costs.

Still, Republican lawmakers in the Senate pushed back. 

“Do you think that is going to power a data center, anywhere in the Commonwealth of Virginia? We’ve got to stop piecing over this problem with tiny, tiny little Band-Aids,” said Sen. Mark Peake, R-Lynchburg, while falsely stating that nuclear doesn’t count toward zero-carbon goals of the VCEA. 

Battery Boosting

Critics of solar say that the technology isn’t effective in the early mornings and afternoons when it’s cloudy and there’s peak demand on the grid from people waking up and coming home from work. That’s where battery storage can come into play, which could be increased by a bill on Youngkin’s desk from Del. Rip Sullivan (D-Arlington) and Sen. Lamont Bagby (D-Richmond). 

Their proposal would increase the amounts of short-term duration battery storage required under the VCEA  from 2,700 megawatts to 5,220 megawatts for Dominion and 400 to 780 megawatts for Appalachian Power. A short-term duration battery would be defined as running fewer than 10 hours, which includes current traditional lithium-ion batteries.

The proposal would add new requirements for the two utilities needing to seek 5,220 megawatts and 520 megawatts of long-duration energy storage, respectively, which would be defined as dispatching energy for 10 to 24 hours. 

Battery storage can help capture electricity during high-producing hours of the day so it can be used when the sun isn’t shining and the wind isn’t blowing.

“There’s been a lot of talk tonight, frankly, and throughout the entire session, about the reliability of our grid,” said Sullivan, when presenting his bill in January. The measures “support grid reliability (and reduce) the need to develop peaker plants. It ensures the best use of current renewable technologies.”

Dominion is currently piloting three long-term duration storage batteries under the previously passed Grid Transformation Act and included battery storage as part of its long-term planning. 

“If the commission ultimately finds they’re not feasible, prices are not reasonable and prudent, then the commission has full authority to do away with the targets, raise them or lower them as they see fit,” said Chrissy Noonan, a lobbyist for Dominion. “We have comfort with that discretion in the commission.”

Virtual Power Plant

But battery storage, for residents, can further reduce costs for ratepayers under a new proposal. 

A bill from Sen. Ghazala Hashmi (D-Richmond)  and Del. Phil Hernandez (D-Norfolk) would expand Dominion’s Virtual Power Plant program, currently being tested by customers in Suffolk County, statewide by the end of the year.

Homeowners or businesses who participate with their own battery storage devices can dispatch energy to the grid during peak demand moments. The utility, with the consent of participants, can pull that electricity and then credit customers on their utility bills. 

Other aspects of the bill include allowing electric school buses to use electricity from their batteries in a similar way, and, the utility adjusting a consenting participant’s smart thermostat to reduce air conditioning or heating units drawing down electricity. A total of 450 megawatts, about half of the generating capacity of a peaker plant Dominion is proposing in Chesterfield County, could be alleviated from the grid through the pilot program.

“We participate in programs like this across the country,” said Alex Thorup, a lobbyist on behalf of Sunrun, a solar and battery developer. “It has resulted in meaningful payments to customers. All they had to do was let a little bit of power come out of their residential battery to help stabilize the grid.”

Noonan, the Dominion lobbyist, said the company also supported the proposal, saying “this would be a continuation and amplification of (their) current work.”

The pilot would run until July 1, 2028. The commission would then evaluate the effectiveness of the program with “lessons learned” from Federal Energy and Regulatory Commission’s Order No. 2222, which seeks to let similar “distributed energy resources” connect to the grid.

On Youngkin’s Desk

Youngkin, in the final year of his term-limited administration, hasn’t indicated how he is leaning on any of these clean energy bills. 

A Trump ally, he has pushed for natural gas use alongside renewables as the state is faced with the explosion of data center development, but he’s also been regarded as a rate-payer advocate. 

In his energy plan, he said intermittent resources like solar can provide low-cost electricity on a variable, but intermittent, basis while also being land intensive. Solar can also allow for Virginia, which is home to national solar developers, “to be a leader,” he noted.

Youngkin also included recommendations in his energy plan to “remove barriers to distributed generation,” and to study energy efficiency and demand response programs, which would include a virtual power plant program.

But when asked earlier this week for comment on how the governor views the bills ahead of Monday’s 11:59 p.m. deadline, Peter Finocchio, Youngkin’s press secretary, said that “the governor is still reviewing the more than 900 bills on his desk.” On Wednesday, Youngkin signed 180 bills on other matters.