What is Going on with Clean Energy in the Commonwealth of Virginia?

Back in March, we outlined the top five upcoming states for solar project investment, based on variables such as planned coal retirements, incentives for solar developers, the presence of a renewable energy portfolio standard, and other factors. From that analysis, the Commonwealth of Virginia rose to the top of the list (see Figure 1 for large increase in solar generation from 2020-21). However, a recent solar moratorium and community pushback show the importance of revisiting the policy environment from time to time.

Figure 1: U.S. Energy Information Data on Net Generation from Solar in Virginia

Problems with Siting and Connecting Utility-Scale Solar Projects

As of late, it has become much more difficult to site utility-scale solar projects in the Commonwealth of Virginia. First, a new Virginia law requires projects reviewed under the commonwealth's "permit by rule process" (for all solar and energy storage projects of 150 megawatts [MW] or less) to include an analysis of prime farmland lands. If a project affects 50 or more acres of forested lands or 10 or more acres of prime agricultural farmland, then developers must provide mitigation for those impacts. The Virginia Department of Environmental Quality established a working group that will meet throughout the summer to identify potential mitigation strategies. There is no comparable state requirement elsewhere in the United States. The impact analysis will no doubt slow down utility-scale solar development, but will provide important data on environmental impacts of projects.

Second, many communities in the Commonwealth of Virginia - despite enactment of the Virginia Clean Economy Act - have been pushing back on projects that span hundreds of acres. At the local level, clean energy runs into objections about how projects affect views and the land. The counties of Nottoway, Page, and Shenandoah enacted solar moratoriums to give county planners time to update zoning ordinances. At the local level, Augusta and Mecklenburg Counties restricted the size of utility-scale solar. In April, Megan Schnabel described problems at the local level in her article, "Is Virginia at a Solar Crossroads?"

PJM Interconnection, which coordinates electricity from Delaware down through Virginia, has had its own challenges with interconnecting clean energy projects. Over four years, the number of projects entering the new projects queue tripled, and this year began with 2,500 projects and 225,000 proposed MW under study. A two-year transition period is underway to work through the backlog of 1,200 projects submitted before 2021.

Finally, Virginia elected a new governor, Governor Glenn Youngkin, who pushed back on the commonwealth's participation in the Regional Greenhouse Gas Initiative (RGGI). RGGI is a market-based program that aims to reduce carbon emissions from the power sector through cap and trade. The participating states include Connecticut, Delaware, Maine, Maryland, Massachusetts, New Hampshire, New Jersey, New York, Rhode Island, Vermont, and Virginia. Governor Youngkin recently signed Executive Order 9 to direct the DEQ to look at the impact of RGGI and end Virginia's participation in this multi-state cap and trade program. While this action signals less commonwealth support of clean energy, the landmark Virginia Clean Economy Act (VCEA) remains and will remain unaffected in the near term. VCEA support is solid in the Virginia State Senate and two key regulatory agencies.

A combination of the factors outlined above will undoubtedly slow down utility-scale solar development, and yet also points to the importance of several factors: (1) commonwealth leadership on clean energy implementation (i.e., helping guide local implementation of a clean energy law); (2) a model solar ordinance, which provides valuable guidance on renewable energy at the local level; and finally, (3) historical data on the number of projects, acres, and tax benefits (before and after project implementation) to ensure stakeholder dialogue is based on sound information. Despite being one of Leyline's "top five upcoming states for solar development," the Commonwealth of Virginia may slip out of the top five, and this underscores the importance of keeping a pulse on the ever-changing energy policy environment.

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