The Chesapeake Solar & Storage Association, generally known as CHESSA, represents every facet of the solar industry in Virginia, Maryland, and the District of Columbia. Founded in 1984 as the Maryland-DC-Virginia Solar Energy Industries Association, CHESSA was formed to support the policy and regulatory needs of its members who design, sell, integrate, install, maintain, and finance solar energy and energy storage equipment. CHESSA’s represents one hundred fifty members serving residential, commercial, industrial, and institutional customers throughout the region. Below, CHESSA provides comments to support the development of the Virginia Energy Plan.

I.         Introduction

Renewable energy and energy storage has been growing in the Commonwealth over the past five years. These new energy sources provide an enormous economic opportunity for Virginia by creating direct and indirect jobs, and creating savings opportunities for ratepayers by reducing electricity costs. Renewable energy allows the Commonwealth to increase its energy security by creating a greater diversity of energy sources that serves to enhance energy supply reliability. Greater deployment of renewable generation and energy storage across the grid serves to increase energy resiliency and grid reliability in Virginia in the face of natural disasters and other security threats. Deployment of renewable energy enables the residents of Virginia to have greater choice over their energy consumption by deploying clean energy, and landowners to diversify their income – and local economy – by leasing their land for renewable energy and storage projects. Finally, renewable energy and energy storage supports the Commonwealth’s goals of enhancing environmental protection through reduction in emissions.

The sector is expected to grow over the next decade, driven primarily by its increasing ability to compete head to head with traditional sources of energy. Levelized Cost of Electricity of solar and energy storage continues to decline, with Lazard’s 2021 report^[1] showing that the LCOE of utility scale solar ranges between $0.028 and $0.041 per kilowatt-hour.

The renewable energy sector has also benefited from key efforts by regulation and legislation on the state and federal level that is intended to level the playing field across all technologies. Virginia can leverage the recently passed Inflation Reduction Act (IRA) of 2022 and other federal programs to accelerate economic development and growth of the new energy economy in the Commonwealth.

In the section below, we outline the key policies needed to ensure the Commonwealth continues to benefit from the deployment of renewable energy and drives further technological innovation. The policies are divided into the four key goals of competitive rates to all energy consumers, reliability, responsible development and rural economic development.

 II.         Policy Recommendations

A.  Competitive Rates

Renewable energy and energy storage technologies are one of the most important drivers of competitive rates in the Commonwealth because of their ability to reduce overall costs to consumers. The recent passage of the federal Inflation Reduction Act (2022) will further drive down costs and rates for all types of renewable energy and energy storage. In particular, the investment tax credit is now extended to standalone energy storage, and provides additional benefits to energy storage in cooperatives. But there are measures that Virginia needs to take to maximize the use of federal funds to bring benefits to the Commonwealth.

Behind the meter, customers are able to deploy clean energy to better control their consumption, reduce their electricity bills, and help contribute to a more efficient electric grid. A full range of investment supports in the Inflation Reduction Act will enable Virginia homeowners to improve their homes with more energy efficient appliances and increase resilience and energy independence with onsite solar and storage. Community solar helps ensure those rights are expanded to customers who have historically been unable to take advantage of the energy savings provided to customers who install solar on their rooftops. Finally, large scale renewable energy and energy storage projects are able to outcompete large traditional energy sources and provide the added benefit of clean air.

In order to expand competitive rates, we recommend the following policy actions by the key agencies and government bodies.

• Legislature:
  • Expand shared solar capacity in the Dominion territory. The current program is capped at 200 megawatts. The pilot program serves as a starting point, but pales in comparison to other states with similar size loads. By way of comparison, Maryland has half the retail sales of Virginia but its program is nearly three times the size of the Dominion pilot shared solar program. Other states across the country with similar load to Virginia have developed uncapped community solar programs in recognition of the important role the regulatory model plays in advancing the state’s goals of reducing costs for marginalized and low income communities.
  • Create a new shared solar program in Appalachian Power and Cooperatives. The value of community solar to communities, particularly low-income residents of the Commonwealth, is clear and should be provided to all customers in the Commonwealth. The federal legislation includes new adders to the investment tax credit which should allow shared solar for low-income residents and “energy communities” to thrive. However, without a workable or attractive shared solar program, the limited allocation of these “bonus” funds (e.g., 1.8 GW each year) will likely be shifted to states with more favorable shared solar policies.
• State Corporation Commission:
  • Revise the minimum bill requirement in the Dominion Shared Solar program to better reflect the intent of the original legislation. The current minimum bill as issued by the Commission is not grounded in cost causation. Instead, the program as currently designed is cost prohibitive to many customers and limits their ability to save money in the program. This could cause most developers seeking to take advantage of low-income and energy community adders in the federal legislation to prioritize projects in other states.
  • Waive the requirement for revenue-grade meters for systems below 10kW-AC. Instead, those projects should either use modeled generation for REC purposes or consider using inverter data instead.
  • Create a process for RPS systems to register through the State Corporation Commission as an RPS resource in PJM-GATS.

B.  Reliability

Renewable energy and energy storage provide an immense opportunity for the Commonwealth to enhance the grid’s reliability. The 2018 Grid Transformation Act recognized the need for the Commonwealth to reform its outdated infrastructure and ensure that energy is delivered reliably to Virginia residents. Distributed energy storage and solar generation are particularly equipped to help build redundancies across the grid that can support the Commonwealth during inclement weather or other shocks to the infrastructure that would otherwise affect the reliable delivery of electricity to customers. Additionally, renewable energy enhances energy security for the Commonwealth by supporting home grown energy and diversifying the resources Virginia depends on to supply its electricity needs.

Despite the many benefits of the Grid Transformation Act, the Commonwealth could enhance reliability by accelerating the deployment of customer sited distributed energy resources (DERs). CHESSA provides the following recommendations for additional steps needed in order to drive the deployment of DERs in a way that enhances system reliability.

• Legislature
  • Establish consumer rights of self-reliance and energy independence. As more customers install smart appliances, at-home electric vehicle charging, rooftop solar, behind-the-meter battery storage, and other distributed energy resource technologies, there is a tension between the traditional utility model and an increasing suite of products that allow consumers to take more of their energy consumption decisions in their own hands. It is critical to establish a firewall to protect energy consumer choices to prevent discrimination in rates against consumers who modify how much they consume from the grid (either increasing or decreasing due to addition of appliances or energy management technologies) so that utility regulation does not reach behind the customer’s meter to penalize or obstruct consumer choices. The customer’s utility meter is the traditional “water’s edge” where the regulators may establish rates and practices. Consumer choices behind the meter should be protected to limit the potential for anticompetitive behavior of utilities and to give consumers more say in their energy future. Consumers should not be discouraged from pursuing their own energy independence or from installing any technology that gives them increased self-reliance in their homes and businesses.
  • Third-party ownership models enable consumers a different financing option to install clean energy technologies (of all types) on their homes or businesses, without the upfront capital investment required if they took out a loan or paid cash. However, third-party ownership model of providing energy services creates some ambiguity in current law of whether these arrangements would make the provider a “public utility” that must be regulated by the SCC. Third-party leases are currently occurring in the Commonwealth, but not at scale because there is legal ambiguity. The Legislature could resolve this ambiguity simply by clarifying that an equipment lease for energy producing equipment does not constitute a sale of electricity and does not make the third-party owner a regulated utility.

• State Corporation Commission:
  • The VCEA requires that part of the energy storage target be met through customer-sited energy storage. The Commission should call on the utilities to file a proposal for a Bring Your Own Device (BYOD) tariff that provides customer sited storage with an upfront incentive as well as a performance based incentive for responding to utility events such as reducing system peak at times of critical need or performing grid functions to avoid the need for new infrastructure.  
• Attorney General Office:
  • Clarification is needed that Third Party Owned systems are allowed in the Commonwealth. Even without SCC action, the AG office should issue an opinion letter to clarify that third-party owned systems being offered to customers under the terms of an equipment lease are not engaged in a sale of electricity that triggers “utility” status and SCC regulation. Such a clarification could be helpful in seeking that determination of status at the SCC. . 

C. Responsible Development 

The renewable energy industry has been an active partner in Virginia in the effort to ensure responsible development of energy across the Commonwealth. At the local level, our organization and member companies have supported the development of sound ordinance and siting requirements that protect the environment and land while ensuring that renewable energy is treated the same as any other industry and energy technologies. CHESSA has been engaged in proceedings to review land use, permitting and siting requirements at the local and state level.

In order to ensure responsible development in Virginia, we recommend the following policy actions by the key agencies.

• Department of Environmental Quality
  • Ensure that the implementation of HB 206 develops recommendations that balance protection of prime agricultural soils and forest lands with the economic realities of solar project development. If done correctly, these requirements will incentivize
  • developers to take steps that reduce overall impacts to “prime agricultural soils” and “forest lands” for a project, ultimately allowing these resources to be better preserved and while helping to lower mitigation compliance costs generally for a project.
  • Work collaboratively with stakeholders to ensure that the Virginia Stormwater Handbook developed with the support of the Stakeholder Advisory Group (SAG) is aligned with best practices in erosion control and stormwater management. The current draft guidance as it stands could have significant impacts on solar development in the Commonwealth. Most notably the interpretation of solar panels as impervious cover is unfounded.
• Governor/Legislature:
  • Provide the Department of Environmental Quality with the needed budget to support hiring staff resources that reflects the growing volume of permitting requests in the Commonwealth. Delays in permitting drives cost overruns and challenges to project viability that is ultimately reflected in higher costs to ratepayers.

• Department of Energy
  • Provide counties with support to deploy SolarApp+ in order to streamline permitting and cut cost for behind-the-meter installations of solar and energy storage.

D. Rural Economic Development

The renewable energy industry provides immense benefits to rural communities. The deployment of renewable energy and energy storage projects provides additional revenue to landowners looking to diversify their income base. Renewable energy projects are very much compatible with supporting the preservation of land, including agricultural and conservation land. Renewable energy projects have limited impact on the land it is sited on, and the use of pollinators and other native grasses enhances the benefit to the land. A growing number of projects across the United States are incorporating agrovoltaics in order to facilitate dual use of the land.

Renewable energy and energy storage projects provide localities with additional sources of revenues through Machinery & Tools taxes, revenue share or siting agreements. Moreover, these projects enable localities to diversify their local industry by bringing income from a sector that has very limited impact on local resources such as trash collection and sewage. The construction phase of the project invites significant direct and indirect jobs, as several studies have demonstrated.

In order to ensure responsible development in Virginia, we recommend the following policy actions by the key agencies.

• State Corporation Commission
  • Adopt a requirement that Dominion Energy and Appalachian Power use an independent evaluator in the review of all projects related to the RPS implementation, regardless of whether they are procured through the competitive RFP process or through bilateral negotiations.
• Department of Energy
  • Facilitate opportunities for collaboration and education between developers, the Farm Bureau and localities about the use of agrovoltaics.
  • Convene cross-agency stakeholder working group to review energy planning process.
• Virginia Economic Development Partnership

• • Provide opportunities for small to medium size energy businesses, including behind-the-meter installers, to participate in discussions on economic development. Facilitate opportunities for stakeholder engagement between energy companies and economic development professionals in counties and cities where solar and energy storage are being built.

III.         Conclusion 

CHESSA appreciates the opportunity to provide these comments to Virginia Energy for its consideration in the development of the Virginia Energy Plan. We look forward to working with Governor Youngkin’s administration in executing his vision for delivering lower costs and creating jobs in the Commonwealth.