The State Corporation Commission has approved Dominion Energy Virginia’s so-called community solar pilot program, under which the utility will offer its residential and commercial customers the output of solar farms to be built by independent solar developers here in Virginia.
Customers will have the option to meet either all or part of their entire electric demand with solar.
The additional cost of the program for customers, at least initially, will be 2.01 cents per kilowatt-hour. For a customer who uses an average of 1,000 kWh monthly and wants to use only solar, that would add up to a premium of $20.10 per month.
Customers who want to meet just a portion of their total demand with solar will have the option of subscribing to “blocks” consisting of 100 kWh, up to a maximum of five blocks for residential customers or 10 blocks for non-residential customers.
The premium cost of the program may surprise customers who have heard that large-scale solar is now one of the cheapest sources of energy in Virginia. But according to Will Cleveland, a staff attorney at the Southern Environmental Law Center who helped to develop the program, cost was not the only consideration in choosing which solar facilities to include in the program.
Facilities were selected to be smaller and distributed around the state, in keeping with the “community” concept, which meant they sometimes came with higher prices. Program costs also include Dominion’s costs of administration and marketing. Cleveland says he consulted experts who advised him the numbers were reasonable.
In addition to selling the electrical output of the solar facilities to customers, Dominion will retire the associated renewable energy certificates, meaning they can’t be sold. The RECs represent the legal proof that the energy comes from solar, an important factor for commercial customers that wish to represent they use renewable energy in their business.
The General Assembly passed legislation in 2017 that authorized a three-year community solar pilot program in Dominion’s territory for up to 40 megawatts of solar capacity. The legislation also authorized Appalachian Power to develop up to 10 megawatts for a similar program. To date, Appalachian Power has not submitted a proposal.
Although the program is called “community solar,” customers will not own shares in the solar facilities, and the facilities do not have to be located in the same communities as the customers. Virginia law does not permit the kind of community solar in which customers share in the ownership and output of solar facilities.
Dominion is expected to begin signing up subscribers later this fall, with the program getting underway once the solar projects come online next year.