In June of 2015, Amazon Web Services announced that it was teaming up with Community Energy to build an 80 megawatt solar farm on Virginia’s Eastern Shore.
This project is a big deal.
Sure, when it begins operation in the fall of 2016, Amazon’s Solar Farm U.S. East will be the largest solar array in Virginia.
But that’s not saying much. After all, the Old Dominion has few decent-size commercial solar projects and no utility-scale arrays.
Amazon’s project is such a big deal because it may now qualify as the largest solar array east of the Mississippi, ahead of the 65-megawatt Warsaw Facility that Duke Energy is building in North Carolina.
The facility will be located in rural Accomack County, not far from the Maryland State line. And that proximity to Maryland explains how Amazon’s project can be structured as a power purchase agreement in a state where PPAs are very hard to get.
That’s important, because PPAs are revolutionizing the economics of solar, making solar power much more affordable by removing the need for a customer to buy its own PV panels. Instead, a third-party developer can install, operate and own a solar array on a customer’s location and sell that customer the power on a monthly basis, just like the local power company. In some cases, PPAs make solar cheaper than grid power.
According to Renewable Energy World,
The Power Purchase Agreement (PPA) for Amazon Solar Farm US East follows a similar PPA for Amazon Wind Farm (Fowler Ridge) in Benton County, Indiana, that was announced in January 2015.
Like most of the other stories on the project, RE World fails to mention how surprising it is that Amazon can do a PPA in the state.
Indeed, the last time a major solar customer wanted to buy power through a PPA, Virginia’s largest electric utility threatened to take the project to court.
Cease and desist
“Cease and desist” was what Dominion told Washington and Lee University in Lexington in 2011 when the school wanted to sign an agreement with solar developer Secure Futures to buy power from about 450kW of PV that the company was planning to install on campus. (At the time, I was the lead salesman on the project for Secure Futures, which has since been a client of my company, the Curren Media Group). W&L eventually built its project under a different financing arrangement with Secure Futures.
But in response to Dominion’s intervention, the state solar industry lobbied the Virginia General Assembly to allow PPAs throughout the state. Over opposition from Dominion and other electric utilities, a compromise measure passed allowing for PPAs only for installations of 50 kilowatts or larger, with an exception allowing non-profit organizations to do smaller arrays.
But the PPA bill only covered Dominion’s service area. Fortunately, that includes the most populated areas of Virginia. But it does leave out anyplace served by other investor-owned utilities — primarily the southern parts of the state under American Electric Power (AEP) — as well as cities such as Harrisonburg or Radford with municipal electric utilities and rural areas covered by co-ops.
So, then, how is it legal for Amazon to build a solar plant on the Eastern Shore and buy power through a PPA?
“The Amazon solar project is near the Maryland Line. DelMarVa Power owns the transmission lines — that is how the power will get to the grid without any involvement by Dominion,” says Glen Besa, director of the Virginia Chapter of the Sierra Club, who explains that the Eastern Shore is outside of Dominion’s service area. “I’m not sure how Amazon is getting the power to their facilities in VA or if it matters.”
It can’t hurt this project that neighboring Maryland, a state whose mandatory renewable portfolio standard, support for PPAs and other enlightened solar policies have helped it rank ninth for installed solar capacity in the U.S. By contrast, Dominion’s opposition to solar and iron grip on the Virginia General Assembly have put Virginia near the bottom of U.S. states, ranking #41 for installed solar.
The wrong map
If you think that Virginia as a state either allows or prohibits PPAs, as you see on so many solar industry maps of “good” and “bad” states for solar power, then Amazon’s PPA in Virginia is confusing.
Most industry maps color Virginia among the lucky states that allow PPAs or third-party ownership. But that claim requires a big asterisk.
In most parts of the state, PPAs are in fact severely restricted or not allowed at all.
In Virginia, it’s all about which electric utility’s territory you’re in. (See Electric Services Territories map for Virginia).
And if your project is lucky enough to be in Dominion’s territory or else in a marginal area outside not served by the state’s other major providers including AEP, munis and rural co-ops, then you can do a PPA for a commercial project, as Amazon will. This only applies to larger installations.
But for arrays under 50 kW, which will include most residential solar installs, PPAs are still not allowed anywhere in Virginia.
Will Amazon’s project set any kind of precedent for the rest of the state for both large and small solar projects? While the legal mechanism doesn’t seem to be there now, I hope that Amazon’s bold move will inspire the public to push the General Assembly to change the rules even in the face of opposition from the state’s most powerful lobby and Virginia’s biggest political donor, Dominion.
I also hope that Dominion and the other utilities will start to see the writing on the wall. Solar is coming and you can’t stop it. Other big companies will surely follow Amazon’s example. For example, Google and other tech giants are under the same pressure from activists as Amazon to cut their massive use of dirty grid power in data centers.
Which big company will be next to put up a big PV array in Virginia — Apple? Facebook? Netflix?
And will Virginia solar companies be able to help those big customers get solar affordably with a PPA?
Dominion adds an ironic twist
Five months after the initial announcement, news came that the original developer, Community Energy, had sold the Accomack project to another energy company. As Virginia blogger James Bacon explained in November, 2015,
Dominion Energy, an unregulated subsidiary of Dominion Resources, announced today that it will acquire a planned 80-megawatt solar facility on the Eastern Shore for an undisclosed price.
This is a rich irony indeed and highlights the hypocrisy of Dominion when it comes to solar in Virginia.
On the one hand, Dominion Resources CEO Tom Farrell is happy to take credit for bringing more solar to Virginia:
“We look forward to expanding our relationship with Amazon as it seeks to increase the mix of renewable energy on the electric grid powering its data centers,” said Thomas F. Farrell II, chairman, president and chief executive officer of Dominion. “This project also shows Dominion’s commitment to building additional clean, renewable solar facilities in Virginia.”
On the other hand, the regulated utility subsidiary has continued to lobby against making PPAs available to all commercial and residential property owners around the state. This has slowed the growth of solar in Virginia.
Widely available PPAs have been key to helping solar spread more quickly in other states. And the sooner that Virginians can get PPAs in Dominion’s service area and throughout the state, the more solar we’ll have.
It’s great that Dominion as a whole will now go from nearly zero solar in the state to running the biggest plant on the East Coast right in Virginia.
But to be a real solar hero, the company needs to stop blocking solar-friendly public policy — starting with solar PPAs for all.
— Erik Curren, Curren Media Group