2 Sep 2016

Third-party financing of solar in Virginia gets big boost but regulators must affirm

Written by Jim Pierobon

A hearing examiner at the Virginia State Corporation Commission has ruled in favor of solar rights confirming that Virginia law gives customers the right to use third party financing for rooftop solar. If the commission upholds the ruling this fall, the decision is expected pry open Virginia to new solar businesses and jobs and make solar power more accessible for qualifying parties.

What follows is an excellent recap and analysis by the Southern Environmental Law Center:

The decision rejected an argument made by electric utility Appalachian Power that a solar financing structure known as a power purchase agreement (PPA) —a contract in which a homeowner pays for solar panels owned by a provider through a monthly contract, thereby reducing or eliminating upfront costs to the homeowner —was illegal in Virginia.

Albemarle High School p2

This solar system on a school in Ablemarle County, Virginia by Secure Futures of Staunton, Virginia is part of a pilot program demonstrating third-party-financed projects. CREDIT: Secure Futures

“Today’s decision is an important win for solar rights in Virginia, which has continued to lag behind neighboring states on solar because of outdated policies and utility opposition like we saw from Appalachian Power in this case,” said Will Cleveland, staff attorney at the Southern Environmental Law Center. “The ruling confirms that Virginians have the right to use common sense financial tools to choose solar power without utilities acting as the middle men.”

Appalachian Power had argued that PPAs were only legal under a Dominion Power pilot program approved by the legislature in 2013. Joining solar industry organizations and other consumer groups, SELC represented Sierra Club, Chesapeake Climate Action Network, and Appalachian Voices to argue against this. The hearing examiner’s decision agreed, noting that “PPAs executed between customers and third-party generators are already legal” and finding that limiting PPAs was contrary to the public interest.

The ruling goes to the full State Corporation Commission after final briefs and public comments, and if upheld, provides a path forward for PPAs in Virginia that could open up the solar market as seen in other states. Virginia has lagged behind nationally and compared to neighboring states on solar, ranking #32 among all states in installed solar as North Carolina ranks #3. As a result, North Carolina has nearly three times the solar jobs as Virginia.

As an example of the promise of PPAs, the pilot program from Dominion Power allowed six schools in the Albemarle County School District to recently install solar panels on its roofs, with students leading the charge: http://www.stories.solar/amory-fischer-and-elinor-glassco/

Read the decision here.

1 Comment to Third-party financing of solar in Virginia gets big boost but regulators must affirm

  1. Kimberly V. Davis's GravatarKimberly V. Davis
    September 3, 2016 at 8:00 am | Permalink

    It would be great to see PPAs confirmed as legal statewide; then we could a) test the market w/o SRECs or other state incentive (color me skeptical), and b) save scarce advocacy resources for this perennial ask!!

    A note – PPAs are typically used for non-residential solar projects [commercial, insitutional, non-profit], and leases for residential. So the reference to “homeowners” in this article better refers to “property owners”.

    Now I’ve been unclear on if industry/advocacy policy pursuits re PPAs were also necessary for, and would apply to, the leases more typically used for residential solar.

    I have since learned that ‘true-lease’ of equipment for solar projects is indeed provided for in law in Virginia.

    So it seems that – someone whose interests are affected needs to do the work to determine further policy needs in VA to provide for the residential leases used typically by TPOs nationwide.

    If it is a straightforward legislative ask, it would be immensely helpful to get that articulated and communicated early.

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