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Statement of Issue
Virginia’s energy future is at a crossroads. Despite having some of the highest solar potential in the mid Atlantic, currently less than one percent of Virginia’s electricity comes from solar energy. According to a study by Virginia Tech in 2005, with ambitious investments in solar energy Virginia could meet 16-19 percent of its annual electrical demand with photovoltaic power. Virginia should move forward setting ambitious but achievable goals that will make solar power—in all its forms, including small and large solar photovoltaic systems and solar hot water technologies—a significant portion of Virginia’s energy economy. With the right policies in place, Virginia could install 2,000 MW of solar photovoltaic capacity by 2030, powering 50,000 homes and businesses.
Background
Virginia cannot afford to wait for solar to compete by itself with incumbent, nonrenewable sources of electricity (coal, nuclear, natural gas), which themselves have an artificially low cost due to past public subsidies. To do so would keep Virginia behind our neighboring states in the race for tomorrow’s energy.
Many states have implemented aggressive solar programs and are drawing solar jobs and businesses away from Virginia. Pennsylvania, North Carolina, Tennessee, Maryland and DC all have in place stronger solar incentives that lower costs, create jobs and draw in new business.
Rebate programs, tax credits and grants are proven mechanisms that increase solar investments by home and business owners. North Carolina, has enacted a 35 percent tax credit for both commercial and residential solar, in addition to other rebate programs and incentives and a mandatory RPS. Shortly after, Duke Energy made investments to generate 16 megawatts of power, enough for over 2600 homes.
Further north, Maine has established a voluntary funded grant program where ratepayers can voluntarily make contributions monthly by checking a box on their utility bill. It’s simple, successful and costs the state government next to nothing.
Here in Virginia, we have seen the popularity of solar systems when rebates and incentives are available to address the initial cost. Currently, solar hot-water systems qualify for a 30 percent federal tax credit that has reduced the average system cost by $2,400. On average, a solar hot water installation will replace 80 percent of the gas or electricity needed to head water with free energy, which equals a 20–25 percent reduction in household utility bills. Further indication of solar energy’s viability was proven last year when the federal government granted money to the Commonwealth to fund a solar rebate program for investment in residential and commercial installations. These programs were widely popular, and all of the funding was fully distributed through the Department of Mines, Minerals and Energy (DMME).
To take advantage of these emerging resources, Virginia needs to develop a viable solar industry comprised, at a minimum, of experienced installation companies and a trained work force. This will not occur without incentives competitive with those in neighboring states.
Across the board, stakeholders in the solar industry have acknowledged that they are eager to develop in states that incentivize solar energy and have a mandatory renewable portfolio standard. In the absence of a mandatory renewable portfolio standard Virginia must develop aggressive incentives, tax credits, rebates and grant programs to attract these investors and entrepreneurs. With these programs and incentives in place Virginia’s solar industry will have the ability to expand and create jobs.
Recommendations
In the long term the Virginia General Assembly needs to:
· Establish a mandatory renewable portfolio standard to recognize the solar industry’s benefits and reward both citizens and businesses making investments in solar.
· Establish a continued funding stream in the form of a revolving loan fund, grant program, rebates, or tax credits to for solar development and installations on commercial and residential homes.
In the short term it is important for the General Assembly to:
· Augment the state’s existing “voluntary” renewable energy standard with a specific, additive target for solar investments.
· Authorize the State Corporation Commission to consider external costs of fuel sources, such as health and environmental impacts, to level the playing field for renewable fuel sources like solar.
· Similarly, authorize the State Corporation Commission to consider the benefits to consumers from the price stability that renewable forms of energy provide.
· Authorize the Virginia Resources Authority to provide funding for solar projects including municipal buildings and schools.
Read more:
http://www.vcnva.org/anx/index.cfm/1,383,0,0,html/Solar-Energy
