The Sol SOURCE is a monthly journal that our team distributes to our network of clients and solar stakeholders. Our newsletter contains trends and observations gained through monthly interviews with our team, and it incorporates news from a variety of industry resources.
Virginia – This summer, Virginia signed into law the Grid Transformation and Security Act (GTSA), landmark energy legislation for the state that concluded that 5 GW of renewable energy was “in the interest of the Commonwealth”.* Over the last month, utilities have started to move forward with their plans to meet the goals set in the bipartisan bill.
Virginia’s largest utility, Dominion Energy, has already solicited 500 MW of bids for wind and solar, part of their plan to bring on 3 GW of solar and onshore wind by 2022. Dominion was a key supporter of the GTSA, and their 2022 plan is expected to be enough to power 750,000 homes in the state. Appalachian Power, a subsidiary of major utility American Electric Power with operations in Roanoke area, also issued an RFP, seeking 200 MW AC of solar alone in Virginia as part of their plans to comply with the law. Appalachian’s projects must be operational by the beginning of 2022.
With 635.45MW of installed solar capacity in the Commonwealth, Virginia’s solar market is set to surge.
*CORRECTION: We originally wrote that the GTSA concluded 5 GW of renewable energy was in the best interest for VA by 2022, however, the 2022 date was relevant to Dominion’s 3 GW RFP and not the GTSA.
New York – Last month, New York seriously charged up its renewable energy market by announcing that $40 million will be provided to solar+storage projects in the Empire State. As part of New York’s existing solar incentive program, the Megawatt Block Program, the state will offer an added incentive for storage projects of $350/kWh. The incentive will cover well over 50% of the costs associated with building the storage component of solar projects, and adding storage could now increase a projects value by as much as 35%.
Looming over this announcement are the many solar projects already in the interconnection queue for the Megawatt Block program that are calculating the value they could add by combining their projects with storage. Rule makers are drafting language to clarify the status of existing projects in the queue and their ability to rework projects to add storage given the new adder. With blocks filling up quickly, many projects may not take the risk of losing their space in the queue even if they stand to add value by adding storage. However, in a market where clarity has been hard to come by, it’s clear that this incentive will make New York a leader in the solar+storage market in the coming years.
New Jersey – It has been almost six months since the passing of A3273, legislation to increase New Jersey’s renewable energy goals to 50%, but the work of the Board of Public Utilities (BPU) is not slowing down. In fact, the BPU is only beginning to design and implement the Clean Energy Act’s solar directives. At the end of October, the BPU implemented one of the first parts of the legislation, shortening solar energy systems’ solar renewable energy credit (SREC) eligibility from 15 years to 10 years as laid out in the legislation, which was designed to bring down the ratepayer costs of the SREC program. However, this announcement is only the tip of the iceberg.
There remain several open-ended questions that solar stakeholders have for the BPU. Most of which center around the transition from the current SREC program to a new incentive program. The legislation requires that once the 5.1% renewable portfolio standard (RPS) solar carve out is attained the existing SREC program needs to be closed and a new or modified incentive program put in its place. How that 5.1% attainment will be calculated is still a big question mark. No matter the algorithm, as number six in the country for solar installations, New Jersey is fast approaching that 5.1% with no interim or new program in sight to provide continuity. The BPU knows the importance of continuity in preserving the over 7,000 solar jobs in the Garden State. They are actively working behind the scenes and with stakeholders to bring the best program plan forward as soon as possible to give the industry steadiness. We wish them the best of luck and many new hires.
- Get on our level(ized cost of energy)! A new report by Lazard shows that even without subsidies, solar energy is now more cost-effective than traditional power sources such as coal and natural gas in many circumstances. Solar prices have steadily fallen for the last decade, and unlike traditional fuel sources, solar won’t be running out of its chief resource anytime soon.
- Power Purchase Agreements in the country are increasingly seeing more variation in the length of the contracts. Traditionally around 20 years, PPAs are now being contracted for as short as 10-12 years or as long as 25-30 years, depending on the customer.
- Recent tariffs on components used to make solar panels as part of the United States’ ongoing trade war have put strain on U.S. panel manufacturing, and many planned investments in US plants have been slashed or abandoned. Given January’s 201 tariffs on imported modules were put in place by the administration with the stated goal of aiding the U.S. solar manufacturing industry, the new tariffs on components are confusing many who see them as undercutting the administration’s own efforts to boost domestic manufacturing.
- Massachusetts’ Advancing Commonwealth Energy Storage (ACES) program, which granted $20 million to the storage projects in December, is turning its gears in the Bay State. Increasingly, we are seeing solar installers in the state consider storage solutions for their projects, and announcements of storage builds are increasing.
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