Eight ways new Virginia laws help you go solar

By Aaron Sutch on June 24, 2020

There has never been a better time to be a solar supporter in Virginia.

Earlier this year, lawmakers passed several pieces of legislation that make it easier to go solar and increase the value of systems that are already installed. Let’s take a look at the most important parts of these new laws.

1.    Providing an incentive to go solar

This is a big one. It gives you an additional revenue stream for your investment in solar.

Virginia law now requires that by 2045 all electricity sold by Virginia’s major utilities come from renewable sources. Utilities can meet this target in one of two ways:

  • They can purchase renewably generated electricity just as they purchase electricity generated by coal or gas power plants.
  • They can purchase credits to account for renewables.

This second option is valuable for solar owners. It allows you to earn money for the “green” value of your system. Under the law, you will earn one credit for each megawatt-hour of electricity you generate. This is called a Solar Renewable Energy Credit (SREC)

An average home solar installation will generate five or more of these credits each year. As a solar owner, you can sell these credits on a market, just like you would sell stock in a company. The revenue from this sale helps you pay off your system more quickly.

So how much are these credits worth?

This is yet to be determined. The value of the credits depends on two things:

  • How close utilities are to meeting the renewable energy target; and
  • The fine assessed for not meeting it.

Under the law, utilities must pay a fine if they do not meet the renewable energy target. The law sets the fine at $75/MWh. The fine essentially sets a ceiling for how valuable the credits can be. If the credits were worth more than $75, utilities would just pay the fine since it would cost less than buying a credit.

While $75 is the ceiling, it is unclear what the floor will be. Solar United Neighbors is closely monitoring the market and will keep you informed as pricing becomes clearer.

2.    Ensuring you can earn the full value from your solar investment

When you install solar it is likely you won’t use all the electricity you generate.

Your extra electricity is sent through your electric meter and consumed by your neighbors. Don’t worry, you aren’t just giving away this electricity. You earn the full retail credit for it through a billing system called “net metering”.

This credit counts against electricity you consume that comes from the utility. Under net metering, the value of the electricity you send out is equal to what you buy from the utility.

Virginia law allowed utilities to stop offering net metering once the amount of solar energy on the electric grid hit 1% of total usage. Once the cap was hit, utilities could credit you at a lower rate, robbing you of the full value of the electricity your system generates.

While that law still exists, this year lawmakers increased the cap from 1% to 5%. This expands the window for you to continue receiving the full value of your electricity.

Also great news — an additional 1% has been reserved for low-income customers.

3.    Letting you power a new electric vehicle with solar

Pairing solar with an electric vehicle allows you to fuel your car with electricity you made. The new laws make this easier to do if you are a Dominion Energy customer.

Virginia law allowed Dominion to not provide you net metering if your system is sized larger than your previous year’s electricity use. This could be a problem if you significantly increased your electricity usage, like adding an electric vehicle or switching from gas appliances to electric ones. The new law allows you to buy a system that covers 150% of your annual usage. Now you’ll be able to add an electric vehicle and electric appliances and power them with solar.

4.    Lifting limits on system size

The new laws will let you build a larger system for your home. They increase the size limitation on systems from 20 kW to 25 kW. This is good for homeowners with high energy use and enough open space to build a large array.

The laws also increase the size limits on commercial properties from 1 MW to 3 MW. This will allow businesses with ample roof space (think warehouses and big box stores) to maximize their systems.

5.    Removing unfair charges

The new laws will allow homeowners to cover more of their electricity usage with solar.

Utilities discourage customers from going solar by adding additional fees on your bill. One of these fees is called a “stand by charge”. Stand by charges penalize you for using a high volume of electricity at once. This might happen if you’re running the dishwasher, doing laundry, and have the thermostat set on “high” at the same time.

The new laws eliminate stand by charges for all residential solar systems less than 15 kW in Dominion territory. This will cover the vast majority of residential systems. Previous rules subjected homeowners with a system larger than 10 kW to stand by charges. The new laws eliminate these fees for systems of any size in Appalachian Power territory.

6.    Improving solar access

The laws’ new renewable energy targets for utilities will also help low-income Virginia families benefit from solar. The targets set aside specific credits that utilities must purchase from projects that serve low-income consumers.

Additionally, low-income households will now be able to go solar through third-party ownership. This can help them access solar at no or little up-front cost.

7.    Letting multi-family units share solar

If you live in an apartment building or a condo, you may now share electricity generated from a solar array owned by the apartment or condo building. This change only applies to customers in Dominion territory.

8.    Protecting you from unfair HOA restrictions

Last but not least, a bill led by Solar United Neighbors will prevent Homeowner Associations (HOA) from stopping you from going solar. The new law closes a loophole in a previous law. That law was written to protect solar homeowners from “unreasonable” restrictions by HOAs. Unfortunately, the law did not define what was “unreasonable”. This meant fighting HOA rules could lead to a long and expensive legal battle. We estimate this prevented more than 300 Virginia homeowners from installing solar since 2014.

The new law defines a restriction as “unreasonable” if it:

  • increases the system cost by more than 5% over the proposed design, or
  • decreases system performance by more than 10% over the proposed design.

You will need to have an independent third party, or NABCEP-certified solar design specialist, certify that the HOA restrictions meet this criteria.

Learn more about how you can help us fight for fair solar policies here!