The passage of the Virginia Clean Economy Act brings new incentives and greater flexibility for solar customers in Virginia.
We'd like to take a minute for a round of applause and virtual high fives to everyone who wrote, called and lobbied for all of the great solar policies that passed through the 2020 VA General Assembly. Specifically, we could not be more thrilled about the passage of the landmark Virginia Clean Economy Act. It could not have happened without you.
Now, since we can all use some positive news, we thought it would be a good time to take stock of what some of these changes will mean to our customers. It seems like eons since we were fighting for expansion of solar in VA, but in reality, the session only ended three weeks ago! At this point it seems clear that the changes enacted by the VCEA will pave the way for much more renewable energy in the state, save solar customers money, and give more leeway with project sizes and siting.
The VCEA is a huge bill that deals with much more than just solar. Overall, it lays the groundwork to get the state to the Governor's goal of 100% renewable energy by 2050. It takes many steps forward for energy efficiency and wind generation and enters Virginia into the Regional Greenhouse Gas Initiative. The VCEA goes into effect on July 1st, and then it will take time to put all of its provisions in place. For now, let's take a deeper look at what the VCEA means to solar customers.
The VCEA creates solar incentives for consumers while mapping out a path to 100% renewable energy for our state
The VCEA creates a new incentive for people to go solar in Virginia through the bill's mandated Renewable Portfolio Standard (RPS). The RPS requires the state to add a certain amount of renewable energy to the current mix of mostly coal, natural gas and nuclear that is powering our electric grid. The VCEA lays out a scheduled timeline, adding more renewable energy each year and ultimately brings us to 100% renewable by 2045.
Now here's where it gets interesting for solar customers. The VCEA's RPS also has a "solar carveout," which means that a certain amount of the mandatory renewable energy must come from residential and small commercial solar owners. If the utility does not meet the standard set for renewable energy at a given time, they will have to pay a fine. To avoid this, utilities will instead purchase credits toward their requirement from individual solar owners in the form of Solar Renewable Energy Credits (SRECs).
How will SRECs benefit VA solar customers?
- SRECs mean money in your pocket for your solar energy. For each 1,000 kilowatt-hours (kWh) of electricity your solar energy system produces, a renewable energy credit is created. SRECs are traded on an open market like commodities, so the values can fluctuate, and also differ from state to state. Luckily, it's easy to turn your credits into cash. All you have to do is register online in the SREC market, and you'll receive a check in the mail every time you sell a credit.
- SRECs speed up the return on your solar investment. An average residential solar installation is about 10kW, so with a system of that size, you could generate up to one SREC per month. In addition to getting paid for your SREC, your utility bill should also have been reduced quite a bit, so this adds an extra chunk of change in your pocket each month. Depending on the size of your system and your personal energy use, you have the potential to dramatically speed up the payback time on your solar system.
The VCEA also gives current and new customers the ability to expand their energy generation goals
The new policies in the VCEA also raise the limit on a residential customer's allowed project size from 100% of their annual energy demand to 150% of their annual energy demand, and raise the project size limit from 20 kW to 25 kW for residential customers.
This means if you're a current solar owner, you can now expand your solar system to include enough power generation to charge an electric vehicle, store energy in a home battery system like Tesla Powerwall, and still cover 100% of your electricity bill.
If you're a new solar customer, it means you have a lot more choice about the size of your project. Now you can think more broadly about your goals, whether that means meeting 100% of your energy needs, eventually going all-electric down the road with a car and new appliances, or investing in a Tesla Powerwall to give you the extra security of power that's always on even if the grid goes down.
Right now it's so nice to have some good news, and comforting to know that Virginia has a clear plan to meet the Governor's call for 100% renewable energy. When we come out the other side of our self-quarantine, we know the world will be forever changed. We think it will be important to rebuild in a way that's safe, fair to all people, forward thinking, and sustainable. We're thankful the VCEA gives us a guide for energy use in this new reality and puts our state on the path to a clean economy. We're especially thankful to every one of you in the Ipsun family who helped make it happen.