Virginia Democrats pass proposal to incentivize small solar projects

March 3, 2025

Though a proposal intended to increase the commonwealth’s buildout of utility-scale solar farms failed this year, another that could incentivize smaller projects fared better.

The bill, sponsored by Del. Katrina Callsen (D–Charlottesville) and state Sen. Schuyler VanValkenburg (D–Henrico), avoided much of the controversy around the other proposal by alleviating some of the need for rural land, according to the patrons.

It would accomplish that by instead increasing buildout of smaller, or distributed, solar resources. Think rooftops or land belonging to homeowners, schools, hospitals and more.

“This gets more solar to the places that everyone agrees that it should go,” Callsen said in a committee hearing on the bill.

When the commonwealth passed the Virginia Clean Economy Act five years ago, the law included a requirement that Dominion build or acquire 16,100 megawatts of solar, onshore wind and anaerobic digestion sources by 2035. Anaerobic digestion is a process that captures methane from decaying plants and animals for use as fuel.

Under that law, at least 1% of Dominion’s renewable portfolio requirement must come from resources smaller than 1 MW. That means the vast majority of Virginia’s solar buildout would likely come from the types of large-scale facilities that have increasingly been rejected at the local level over impacts to farmland, forests and rural character.

This bill would increase that 1% carveout to 5% by 2028, then hand discretion over to the State Corporation Commission to change the ratio down the line. It also clarifies these are “behind the meter” projects, or those owned by utility customers — which are eligible for renewable energy credits.

The carveout includes solar services provided by Dominion subsidiaries.

Southern Environmental Law Center attorney Josephus Allmond told legislators the measure could relocate solar developments from 8,000–9,000 acres of forest and farmland onto rooftops and brownfields. Data from the University of Virginia’s Weldon Cooper Center, referenced in a recent Virginia Commonwealth University study, shows 30,632 acres of land is used for utility-scale solar in Virginia today.

In other words, though it would make some changes, this bill would not change most of Virginia’s solar buildout likely coming from rural areas, where land is less expensive and more abundant.

Tony Smith, chair of the Virginia Distributed Solar Alliance, called the measure “a good bill.”

“It provides some continuing financial incentives for rooftop solar and actually expands it,” Smith said.

By removing a 50-kilowatt floor on eligibility, homeowners with especially small installations would stand to benefit from the bill.

There’s also some goalpost-moving: The bill would change the definition of these distributed resources from being 1 MW or smaller to 3 MW or smaller, allowing Dominion to put more projects under the distributed umbrella. (Other governments’ thresholds for distributed generation can go as high as 5 or 10 MW.)

And Dominion’s getting a carrot out of it, too; the bill includes a clause ordering state regulators to approve cost recovery for certain transmission undergrounding work until 2032. Undergrounding wires — a generally expensive proposition — is good for reliability and protects infrastructure from wind, precipitation and other risks.

Despite other difficulties facing certain solar projects — like prohibitive grid connection costs for midsized solar facilities — Smith said solar remains the most affordable, reliable and clean energy source available.

“I’m very bullish on the future of solar energy,” he said. “No executive orders are gonna change that reality.”

House and Senate versions of the bill were passed with some bipartisan support and await action from Gov. Glenn Youngkin.

 

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