The Maryland-DC-Virginia Solar Energy Industries Association (MDV-SEIA) is the regional trade organization of the photovoltaics and solar thermal manufacturers, distributors, and component suppliers. Our membership also includes consultants and companies that design, sell, install and maintain solar energy equipment for residential, commercial, and institutional customers throughout the state.
MDV-SEIA believes that deregulation of the electricity market in favor of free and fair competition as well as meaningful customer choice presents tremendous opportunities for the developing solar energy industries in Virginia. Electricity customers have consistently indicated that, given a choice, they would prefer to buy solar electricity over all other technology options. While an important element of increased competition is reduced prices for energy services, survey after survey indicates that customers and the general public want a broad range of service options, reliability, and improved environmental quality, in addition to lower prices.
Now that the fundamental groundwork for deregulation has been laid as a result of legislation passed during the last session, the Virginia General Assembly should turn its attention to the impact of restructuring on our nascent renewable energy industry here in Virginia. It is easily possible to create a menu of programs and actions adopted by other states during deregulation, choose those most appropriate for Virginia, and adapt them to conform to Virginia's policies and purposes in order to encourage the growth of the high-tech renewable energy industry throughout the state.
At a minimum, MDV-SEIA proposes the following items to be considered by the Legislative Transition Task Force (LTTF) as its members consider follow-up issues for the upcoming 2000 legislative session:
I will discuss each of these proposed items below, but first I feel a need to address two additional issues.
First, MDV-SEIA would like to note its concerns with the pace of action by the Consumer Advisory Board regarding its planned investigation into renewable energy options for the state. To date, the Board has yet to complete its work on low-income issues, precluding its examination of other issues like renewable energy. With just under two months remaining until the next legislative session, MDV-SEIA is concerned that an appropriate amount of time to investigate renewable energy issues may not be available and that the Task Force may be forced to act without sufficient information in the coming year.
Second, MDV-SEIA is aware of proposed changes from the SCC regarding the annualization provision in the already-passed net metering language. While MDV-SEIA understands the issue the Commission is trying to address, we are extremely uncomfortable with the language change as the Commission currently proposes it. It is also important to note that not one of the other 30 states that have net metering currently in place have felt this issue even warrants a legislative clarification. We do not support the SCC’s current approach, but will continue to work with staff to reach an acceptable resolution to the issue.
Legislation should provide for the creation of a state trust fund for renewable energy and energy efficiency technology development and deployment. The fund, based on a per kWh line fee, needs to be designed to promote the deployment of emerging and distributed renewable technologies, including photovoltaics (i.e. solar electricity) and solar thermal technologies, as well as wind, and small, run-of-river hydropower.
Many models exist in other states for using renewable energy funds generated by the deregulation process, but MDV-SEIA believes the use of the funds should reflect the supportive stance that the Virginia legislature has taken in recent years regarding high-tech industry development in the state. Possible uses would be to fund a tax credit program for solar equipment purchases (i.e. a sales tax exemption or an income tax credit); an extension of the expired Virginia Alliance for Solar Electricity (VASE) program that would be open to all Virginia-based manufacturers of renewable energy equipment; expansion and extension of the Manufacturing Incentive Program for photovoltaics in Virginia; or a solar schools program (see below).
Renewable Energy funds are an explicit part of the proposed plan in the neighboring state of North Carolina and the option is still being discussed as well in Maryland. These are of course states with which Virginia competes for technology jobs in many fields including renewable energy. Such plans are also proposed or in place in California, Connecticut, Illinois, Massachusetts, Montana, New Hampshire, New Jersey, New York, Pennsylvania, Rhode Island, Vermont, and Wisconsin and in many other early-stage proposals from across the country.
The funds for Renewable Energy should be administered by the DMME. However, a mechanism for industry input should be created so that the administering agency(s) have the benefit of guidance from the local renewable energy business community including groups like MDV-SEIA as well as input from the State Corporation Commission.
One program in particular that could be funded through a PBF or through separate funding is a Solar Schools Initiative. Schools provide an ideal location for deployment of site-based renewable energy technologies. Schools have high visibility and are often the center of the surrounding neighborhood, thus providing opportunities to teach not only students, but also community leaders and local government officials about energy efficiency and renewable energy technologies. These kinds of programs are now underway in Arizona, Connecticut, Maryland, New York, Ohio, Wisconsin to name a few. I highlight two of these programs below.
Maryland Program. Currently, the State of Maryland funds a Solar Schools Program designed to introduce solar photovoltaic (PV) energy, and the excellent educational opportunity it represents, to the state's primary and secondary schools – both public and private. The MEA has obtained support of its school initiative from the Virginia Alliance for Solar Electricity (VASE), purchasing in its first year seven PV systems at a significantly reduced price. The State also helps each school by providing an educational curriculum that instructs students on how solar energy works and on the importance of renewable energy to their future and the global environment.
Ohio -- American Electric Power (AEP) Program. American Electric Power (AEP), the Ohio Office of Energy Efficiency, and several other non-profit organizations have developed a Solar School Program as a part of the DOE’s Million Solar Roofs Initiative. Along with a 2kW solar electric system, this project includes hands-on educational tools that enable students to learn about solar energy, which in turn allows the school to incorporate the project into its science curriculum.
Two more schools are going solar this fall, with state funding combined with donations from AEP and local businesses. One of these schools, Union Local is located in the state’s coal mining region. Glen Kizer, President of the Foundation for Environmental Education, reports that "these kids know a lot about energy, since coal was one of the major players in the local economy over the last 100 years. They are excited because it brings high technology to kids who live in a rural setting." Union Local and state dignitaries will dedicate this latest solar energy project this month in ribbon-cutting ceremony.
A number of localities in Southwestern and Northern Virginia have already expressed an interest in exploring such programs in Virginia, and MDV-SEIA would like to work with the Commonwealth and those localities to make such a new program a reality.
Legislation should establish a "portfolio" to encourage development of renewable energy resources. A RPS should encourage a broad portfolio of technologies, not just those that are most cost effective at the present time. Furthermore, the portfolio standard should provide for aggregation of generation from small-scale installations, such as small wind and distributed solar thermal water heating, solar thermal electric, and PV systems.
If the Commonwealth chooses to implement a RPS, aggregation procedures should be established in such a way that distributed renewable energy systems (for example, a housing subdivision with photovoltaics or solar water heating systems on all the rooftops) could be counted toward a RPS requirement. This is particularly important if a renewable energy credit-trading system is established so that energy providers with renewables capacity beyond their required RPS percentage could trade credits to renewable energy deficient generators in the marketplace.
Distributed resources, such as grid-tied PV arrays, permit generated renewable electricity to be used more efficiently within Virginia’s existing transmission infrastructure. This is particularly true among residential- and small commercial-scale users and generators at the ‘end’ of the transmission network. When kilowatts are generated nearer to their point of consumption, distributed resources reduce the voltage loss associated with distance transmission. This will help lower future capital investment in transmission systems.
Customer aggregation should be more strongly encouraged in Virginia in conjunction with restructuring. In particular, localities (counties, cities or towns) should be permitted to aggregate their residential load on an "opt out" basis. One of the most striking trends in deregulation today has been the movement of cities and other municipalities toward purchasing "green" power. One version of green aggregation would be local governments aggregating their own electricity accounts - primarily office buildings but also water pumping stations, street lights and the like.
However, by combining the electricity loads of their citizens into one large buying group, municipal governments can purchase reasonably priced power generated from renewable resources, thus capturing a share of restructuring's economic efficiencies, while delivering the environmentally sustainable energy that Americans want.
Because of the provision adopted by the General Assembly in the previous legislation, Virginia localities, like any other aggregators, will have to convince consumers to "opt in" individually. The most important effect of this is to put the marketing costs of the aggregation program on the local government. To illustrate the effect of this seemingly slight procedural shift, consider that some 80 percent of consumers nationwide remained with their default long-distance provider after deregulation of the telecommunication sector; companies wishing to pry them away required immense advertising and direct marketing budgets.
One of the most successful green pricing programs in the country resulted from an innovative partnership between the Land and Water Fund of the Rockies and Public Service Company of Colorado, in which the environmental group helps market the electric utility's green power product. By May 1999, more than 11,000 residences, 200 businesses, and a dozen municipalities in Colorado had signed contracts to pay a combined premium in excess of $1 million to purchase almost 20 megawatts (MW) of wind power. And five other Colorado utilities were also offering green choices to their wholesale and retail customers. The end of 1999 will likely aggregate an additional 5 MW of demand aggregated, bringing the green pricing total to 25 MW.
While there are many possible purposes for such a program, MDV-SEIA strongly supports two: general education about renewable energy choices in the marketplace (general awareness) and information on interpreting the information disclosed by generators under law in the customer bills. Since the general public may not > understand > the relevance and impacts of some disclosed information (like carbon dioxide, sulfur dioxide, etc.), customer > education is > an important component of disclosure. Inclusion of some information > regarding the impacts of various energy mixes and emissions on the customer’s monthly utility bill would be > helpful, > but more extensive education may be needed. The SCC and the DMME should share this responsibility.
Along with electrical workers, buildings related public safety personnel, e.g. code inspectors, are finding their job to be increasingly complicated because of deregulation. Parallel with consumer education, a requirement is growing for building related public safety personnel, to become more competent in solar energy technologies so that they recognize well-installed systems as well as poor ones. Technical training in this area should be supported along with consumer education for at least a five-year period.
MDV-SEIA continues to support the general approach of the General Assembly to restructuring the electricity industry in Virginia. By adopting net metering and environmental disclosure provisions in the new deregulation legislation on top of the pre-existing photovoltaics manufacturing initiative and the VASE incentive program, Virginia moved to improve the business climate in the state for renewable energy companies.
However, we are increasingly concerned that common sense options to protect our growing high-tech, renewable energy industry are not included in discussions for the future under this new open market system. The manufacturing initiative is approaching its sunset, while VASE has already expired. Maryland has moved ahead of Virginia in renewable energy education with its Solar Schools Program, while North Carolina has recently expanded its generous tax incentive package for solar equipment and construction to support local solar industry development. By failing to adopt a Public Benefits Fund, a Renewables Portfolio Standard, "Opt-in" Municipal Aggregation, and Consumer Education Programs for Renewable Energy, Virginia is putting its leadership role in renewable energy at risk.