We’ve got some important news about solar energy that you should know about. The State Corporation Commission (SCC) is making changes to the net metering rules in Virginia and we need to pay attention to this. Net metering is how you get credit for the electricity your solar panels produce.
Right now, if you have solar panels, you get credited at the full retail rate (13-16 cents per kilowatt-hour) for the electricity you send back to the grid. This has made it a good deal for people to invest in solar energy. However, in some other states, revisions to net-metering has lowered the value of these credits. In some places, they only get around 4 cents per kWh. Utilities around the country are pushing for lower net-metering rates, making solar less attractive for homeowners. Without public resistance, the utility companies are getting their way.
What’s Happening Now?
On May 6, the SCC told Appalachian Power Company (APCo) and Dominion Energy Virginia (Dominion) to come up with new net metering proposals. The law says they have to look at a few things:
- Charges for Customers: How much customers will pay each month for using the utility’s infrastructure.
- Credits for Solar Power: How much the utility will pay customers for the benefits their solar panels provide.
- Economic Impact: The overall effect of net metering on Virginia’s economy.
- Fair Costs: Making sure the costs don’t unfairly shift to customers who don’t have solar panels. (Note– This is worrisome, as this is part of a flawed arguement that has been used nationwide. Read more below!)
APCo posted their plan in September, 2024, and Dominion has until May 1, 2025.
Read updates on APCo’s draft of net metering rules below!
With APCo and Dominion writing the draft of the rules, it’s all but certain that they will propose lower rates for solar net-metering customers in Virginia.
Net Metering in Other Markets
Other states have gone through similar changes, and here’s what happened:
- California: Adjusted their net metering rates (NEM 3.0), slashing the value of solar energy by about 75% overnight. More solar businesses have closed in California last year than any other state, and NREL reports that 17,000 solar jobs would be lost in 2023, with 59% of solar contractors expecting further layoffs.
- Nevada: Reduced net metering credits a few years ago, but after public outcry, they brought back better rates.
- West Virginia: Utilties proposed slashing net-metering credits to 6.6 cents (about 50% of their residential value), and compromised on 9 cents after massive public backlash.
APCo Net Metering Draft Proposal
On August 30, 2024 Appalachian Power Company (APCo) responded to the SCC request to provide updated net metering rules in Virginia. The good news is that any changes will not affect customers that already have solar. The bad news is their proposal is a step back for the accessibility and development of clean energy across the state.
Right now, solar customers are credited for energy they send back to the grid at the same rate they pay. APCo’s new net metering rules would reduce net-metering rates by 71%. They also propose lifting the 6% limit on how many people can participate in net metering, but only if they are able to successfully lower the rate. If the rate remains at a 1:1, APCo wants to lower the 6% cap.
With the current system, solar customers save at the retail rate of $0.16 per kilowatt hour, but under the new plan, new customers would only get $0.04 per kilowatt hour.
In addition to lowering net metering rates, APCo’s plan includes a new monthly fee for solar customers,Monthly charges will be calculated using an identical rate structure to the structure that would apply if the customer were not a customer-generator”
APCo believes these changes will stop the costs from being unfairly passed on to non-solar customers, but there are some big problems with APCo’s plan:
- They focus too much on cost shifting and don’t fully consider the benefits of solar. Solar energy helps the environment and reduces the need for new, expensive power plants.
- Solar energy can help lower the demand for electricity during peak times when energy is most expensive.
- APCo argues that these changes will benefit low-income households, even though it will counteract the many incentives for solar on low-income housing. In addition, they released a statement that they are seeking to increase their profit margin from 9.5% to 10.8%, potentially harming local communities and further increasing the burden on low income households.
How bad is APCO’s Net Metering proposal?
This drastic reduction in compensation would significantly extend the time it takes for homeowners to recover their solar installation costs, making it far less attractive for people considering solar. APCo wants to reduce residential net-metering rates by 71% and business net metering rates by 66%, effectively eliminating any financial benefit to going solar. By eliminating long-term savings, and adding in additional fees, solar in APCo territory will not be a viable option if they get their way.
While APCo might argue that removing the 6% cap opens up more opportunities, the significantly lower compensation rate would completely compromise the attractiveness of solar, making their argument about the cap irrelevant. Without a fair rate of return, fewer people would be interested in solar, making the cap removal much less impactful.
APCo’s current interest is solely on owning large utility scale renewable facilities where the potential for profits are higher. This completely undermines the concept of distributed generation, which involves small business, homeowners and landowners working together to diversify sources (vs one centralized energy platform). In addition, APCo is ignoring the long-term environmental and economic benefits solar energy provides. Overall, these changes would slow down the growth of solar adoption, weaken the solar industry, and make it harder for homeowners & businesses to switch to clean, renewable energy.
What You Can Do
A challenge to net-metering does not mean defeat. Some states have seen net-metering challenges, with solar-rights winning out. In Florida, utilities tried to undercut solar net-metering, but after pushback from homeowners and solar advocacy groups, DeSantis vetoed the bill, protecting net-metering.
Utilites are monopolies, and they are attempting take away access to energy choices. Limiting access to net-metering will affect Virginians’ rights to access clean energy and job growth, as we have seen in other states.
This is a tired tactic that utilities have used to maintain their monopoly grip on electricity markets.
Stay Informed
We need to stay active and involved in this process. We need to make sure the new rules are fair and continue to support solar energy growth in Virginia.
Stay tuned for more details on how and when you can submit your comments. If you want to stay up to date on the latest developments, here are some other great resources:
- Power For The People VA – Ivy Main follows legislative changes in Virginia and is an amazing resource. Expect updates on net-metering as things develop.
- Solar United Neighbors – SUN is a solar advocacy powerhouse. Join their mailing-list, as they intend to launch a campaign to protect Virginia net-metering rights.
Voice your Opinion
We need to stay active and involved in this process. We need to make sure the new rules are fair and continue to support solar energy growth in Virginia. Comments are now open on the APCo case! See below for instructions on how to make your voice heard on the APCo case.
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- Net Metered Solar Benefits Everyone by providing clean, local energy where and when it’s needed most. It creates local jobs and provides consumers more options to save on rising utility bills. It relieves grid congestion obviating expensive investments in new power plants/ infrastructure (paid by all utility customers). It also insulates utility customers from natural gas and other dirty, expensive commodity fuels like coal. Approximately 54% of VA electricity is generated from imported natural gas, which is expensive and prone to price fluctuation.
- A majority of Americans (76%) support net energy metering. Utilities are able to pass unfavorable rates because most homeowners are unaware of the changes. Homeowners want lower electric rates, not higher utility profits.
- Utilties use a flawed “cost shift” arguement to support unfair policies. Utilities falsely argue that customers that install solar push costs of grid maintenance to other ratepayers. Despite no evidence of this, and no analysis into the benefits that solar brings to a distributed grid, this tired line continues to crop up in net-metering debates.
- Only about 1% of our energy in Virgina comes from customer-owned net-metering sites. Arguements to hamper net-metering are strictly profit-driven, and have little bearing on grid stability or equity.
Take Action: Protect Net-Metering in Appalachian Power Territory
Net-metering is under threat in Appalachian Power’s (APCo) service area, with a proposal that could slash its value by 71%. The State Corporation Commission (SCC) will hold a public hearing on May 20 to discuss APCo’s request to alter net-metering rates. Public comments play a vital role in this process, and your input can help protect solar in Virginia.
How to Participate in the Hearing
If you want to speak during the hearing, you must register by May 13. Here’s how to sign up:
- Online: Complete the form for case PUR-2024-00161 on the SCC’s website.
- Phone: Call the SCC at 804-371-9141 (weekdays, 8:15 a.m.–5 p.m.) and provide your name and phone number.
Each participant will have 5 minutes to speak. The hearing will be live-streamed on the SCC’s website for public viewing.
Submit Written Comments
If you’re unable to speak during the hearing, you can still make your voice heard by submitting written comments. The SCC is accepting public comments on this issue through its website until May 13. Be sure to reference case PUR-2024-00161 when submitting your statement.
Why Your Voice Matters
Organizations like Appalachian Voices, Clean Virginia, Solar United Neighbors, and others are already advocating to protect net-metering. However, public input is critical to show regulators that slashing net-metering rates is unacceptable and would harm both solar customers and Virginia’s renewable energy future.
Let the SCC know that you stand for fair net-metering policies, and they need to keep the 1-to-1 ratio for residential customers. Your action today can help ensure that solar remains a viable and beneficial energy choice for all Virginians.
Go Solar Now
No matter what the outcome is, if you install solar panels before the new rules take effect in Virginia, you’ll keep getting the full retail rate.
Nothing in the Commission’s final order shall affect any eligible customer-generators, eligible agricultural customer-generators, and small agricultural generators who interconnect before the effective date of such final order
This means if you install solar before net-metering rules are applied, you will be grandfathered in under the old (likely more favorable) rules.
So, if you’ve been thinking about going solar, now is the perfect time to do it. While we’ll be fighting to maintain Virginian’s full rights, installing solar before the rules change is the safest way to ensure the best rates. Not only will you save on your electricity bills, but you’ll also help the environment by using clean, renewable energy.
Need Help?
If you have any questions or need help getting started, our team is here for you. We can guide you through the process, answer any questions you have, and help you take advantage of the current net metering rates before they change. We’ll keep you updated on what’s happening with net metering in Virginia. Make sure to follow our blog and social media for the latest news.
Sources:
- SCC Case No. PUR-2024-00047
- Virginia Code § 56-594(E)
- Settlement Reached in net-metering case
- NREL Winter 2024 solar industry update
- Myth of the Solar Cost Shift
