Virginia’s Community Solar Program

The best community solar programs maximize benefits for participants and prioritize accessibility by reducing the participant’s electric bill with a credit equal to the amount of electricity produced by the community solar array. They also secure long-term contracts with utility companies (at least 20-year). They also don’t limit how much of the solar project someone can subscribe to. To give subscribers more control, the best programs allow participants to own the renewable energy credits they earn from being part of the community solar project. If there is any extra electricity produced beyond the amount that is allocated to subscribers, the best programs allow the subscriber organization to give credits to its community solar customers as they best see fit.

• Subscribers to the Shared Solar Program earn a monthly bill credit equal to the number of kilowatt-hours (kWh) generated during a month by the portion of a shared solar facility they subscribe to, multiplied by the bill credit rate.
• The bill credits are equal to the retail value of energy for each customer class (residential, commercial, or industrial). They are calculated by the SCC each year by dividing the total revenue for energy sold to each customer class.
• However, the total bill credit in a given month may not exceed a subscriber’s “minimum bill,” which the law requires the SCC to establish and maintain. The minimum bill applies to all Shared Solar customers of Appalachian Power, but does not apply to low-income Shared Solar customers of Dominion Energy.
• Minimum bills are currently estimated to be $83.59 in Dominion Energy Territory and $40.15 in Appalachian Power territory for customers with 1,000 kWh of average monthly usage. The minimum bill amounts may change in 2025, as both companies have current petitions in front of the SCC to reconsider the calculations for the costs and benefits of the shared solar program that determine the amount for the minimum bill.
• The current minimum bills are extraordinarily high and greatly reduce the possible value of the Shared Solar program for everyone but low-income customers of Dominion Power. Essentially, a non-low-income customer of Dominion Energy would only be able to realize the full value of Shared Solar bill credits for up to half their annual energy usage. A subscription that produced more energy would result in no greater financial savings.
• In contrast to the Shared Solar program, Virginia customers of these two utilities with on-site solar panel systems covered under net metering are not subject to these kinds of minimum bills.
• The utility is required to provide bill credits for “not less than 25 years from the date the shared solar facility becomes commercially operational.”
• Subscription size is limited so that estimated bill credits do not exceed the subscriber’s average annual bill (i.e. credits are limited to 100% of annual usage).
• For the first 200 MW of the Dominion Shared Solar Program, subscriber organizations were allowed to retain rights to any renewable energy certificates (RECs) generated. Now, both Appalachian Power and Dominion Energy programs require the RECs to be transferred to the utility.
• If a shared solar facility has any unallocated bill credits at the end of a month, the subscriber organization can accumulate bill credits. The subscriber organization is allowed to decide how to allocate any excess annual bill credits.

The best community solar policies allow any non-utility entity to own a community solar project. To maximize ownership flexibility and accessibility, the best policies do not restrict community solar project size. But community solar projects should be small enough to connect to the low-voltage side of a substation so that they primarily serve local energy needs. 

• A utility may not own a shared solar facility, but any for-profit or non-profit entity is allowed to own a facility.
• Virginia sets a maximum shared solar system size of 5 MW. There is no minimum size.

To maximize accessibility, community solar policies should encourage a wide range of subscribers – e.g. residential, small businesses, large businesses, etc. They also shouldn’t put restrictions on subscriber type, the minimum number of subscribers, the maximum number of subscribers, or limit subscribers to a certain geography. They should, however, encourage accessibility by making sure that no individual subscriber owns more than 40% of the facility generation capacity.

• Virginia allows any retail customer of the electric utility to subscribe to shared solar.
• The SCC is required to establish a minimum monthly bill for all customer classes (residential, commercial, utility).
• A shared solar facility must have at least 3 subscribers. There is no evidence of a maximum number.
• Subscribers must receive service in the same utility territory as the shared solar facility. Subscriber organizations may own or operate shared solar facilities in more than one utility service territory.
• At least 40% of the capacity of a shared solar facility must be allocated to customers with subscriptions of 25 kW or less.

To encourage synergy with other renewable energy initiatives, the best community energy programs include renewable energy sources in addition to solar, and also incentivize battery storage.  

• The Virginia Shared Solar Program covers only solar facilities. Battery storage is not considered in the Shared Solar Program rules.

Community solar policies should prioritize tangible benefits and accessibility for participants by focusing on consumer protection. The best programs require utilities to combine community solar credits into the subscribers usual utility bill. They also require utilities to allow extra bill credits to roll over, and prevent utilities from putting expiration dates on bill credits or requiring minimum bills. They also allow subscribers to transfer their bill credits for free and do not allow subscription termination fees.

• Subscriber organizations within Dominion Energy territory may offer separate billing or consolidated billing, but Dominion can charge customers a “net crediting fee” of up to 1% bill credit value.
• Subscriber organizations within Appalachian Power territory must bill subscribers separately.
• Bill credits that exceed a subscriber’s monthly bill, minus the monthly minimum bill, are carried forward for up to 12 months.
• Rules for both Dominion Energy and Appalachian Power allow subscribers to transfer their subscriptions if they move within the utility’s service territory.
• Rules for both Dominion Energy and Appalachian Power prohibit early termination fees and credit reporting only for low-income customers. Termination fees for all shared solar contracts in Virginia must be disclosed in contracts.
• All shared solar subscriber organizations must provide prospective subscribers with consumer disclosure information before executing a written contract.

Community solar increases access to clean, local energy. The most equitable and impactful programs do so with a carve-out for Low- and Moderate-Income (LMI) participants of at least 30%, by capacity, for each community solar project; a higher carveout is better. An effective definition of LMI is 80% of area median income, and participants should be permitted to self-attest their LMI status without having to provide additional documentation. 

• The minimum bill requirement in the Shared Solar Program means that the program only provides meaningful savings to LMI customers because of the punitive minimum bill. Despite the fact that the credits themselves represent roughly the retail cost of energy, the SCC allowed Dominion to greatly reduce the value of per-kWh bill credits for non-LMI customers in its final order approving the first version of Dominion Energy’s minimum bill. In practice, this means that non-LMI subscribers to shared solar facilities would have to pay more for their subscription than the bill savings generated by that subscription. Because LMI customers are exempt from the minimum bill, they alone are able to realize the full value of the bill credits.
• For the new 150 MW tranche of capacity in Dominion Energy territory, there is the opposite of a carve-out: no more than 51% of 75 MW of this portion of the total program capacity may serve low-income customers. Put another way, 36.75 MW of the 350 MW program capacity must be allocated to non-low-income customers.
• The Program definition of low-income is “any person or household whose income is no more than 80% of the median income of the locality in which the customer resides.”
• In 2021, SCC Staff submitted recommendations to the Commission that included the use of a self-attestation form for income verification. There is no evidence that the Commission adopted these recommendations, and no stated process for demonstrating eligibility exists, outside of a checkbox on the Virginia Shared Solar Program’s Standard Consumer Disclosure Form. There is a requirement for subscriber organizations to retain low-income customer proof of eligibility for at least three years.

Equitable community solar programs also prevent utilities from running credit checks in order to qualify subscribers. They should also guarantee that subscribers will save money on their utility bills by participating. Rules for community solar projects 1 MW and larger should include strong local/minority workforce requirements in combination with prevailing wage requirements.

• Subscriber organizations are prohibited from using credit checks in order to qualify subscribers.
• The shared solar rules for Appalachian Power require at least 10 percent bill savings throughout the life of the subscription. The rules for Dominion Energy do not guarantee savings, but do require subscriber organizations that use net crediting (i.e. consolidated billing) to ensure subscription fees do not exceed the value of bill credits.
• There is no evidence of labor and wage requirements for shared solar projects in Virginia.