Midsize solar developers in limbo after Dominion requirement spiked by SCC
The utility cited safety and reliability concerns in its response to the initial complaint.
After state regulators suspended Dominion-imposed requirements for connecting certain solar facilities to the grid, some developers are optimistic — but unsure of how to move forward.
Dominion Energy established interconnection parameters for midsize distributed solar facilities in December 2022 without approval by the state. Rated between 250 and 1,000kW, these facilities are larger than home solar but smaller than utility-scale. They usually generate electricity for power-hungry buildings or dozens to hundreds of homes in a small area.
It’s “distributed” because, unlike centralized power plants, the electricity is produced at many smaller sites.
The parameters required installation of expensive technologies that can take a solar facility offline in a fraction of a second, in case of emergency. But solar developers and environmentalists with the Virginia Distributed Solar Alliance (VA-DSA) said the cost was prohibitive and argued to the State Corporation Commission that Dominion doesn’t have the authority to set those rules.
The commission agreed, suspending the parameters last week and telling Dominion it can raise the issue in other ongoing cases on solar regulation.
Now, some developers and solar planners said they’re waiting to hear from Dominion and the SCC on how the interconnection process will move forward.
Carrie Webster, energy manager for Henrico County, was quoted in the complaint. She was overseeing a planned solar farm at James River Juvenile Detention Center when the requirements were announced.
“The upgrades that Dominion cited in their impact study totaled approximately $2.25 million worth of upgrades needed. And since the project could not absorb those costs, we did put the project on hold,” Webster told VPM News.
Now, Webster said she’s hopeful the project can move forward, but doesn’t know how Dominion will respond.
Alden Cleanthes, co-founder of Norfolk Solar and legislative director for VA-DSA, is in a similar position. Norfolk Solar lost its primary solar installer over Dominion’s requirements, effectively leaving the company “dead in the water.”
Since the SCC’s decision, however, the company’s received interest.
“There was a group of investors that reached out to us the next day that want to do several projects,” Cleanthes said. “But again, we’re still waiting for some guidance.”
Dominion is figuring out its next steps, according to spokesperson Jeremy Slayton. The company has limited time to appeal the commission’s decision and is engaged in two other cases on solar regulation that could provide a route for officially establishing a similar set of parameters.
“We remain committed to ensuring the safety and reliability of our grid. This applies to every colleague out working to keep the lights on every day and to our customers who rely on us to deliver safe and reliable power,” Slayton wrote in an email. “Our filings and interconnection requirements are designed to ensure the same safety and reliability standard, regardless of who builds and operates the generation sources on the grid.”
Cheap solar — at a premium
Many advocates see distributed solar as a key part of a cost-effective transition to clean energy.
Companies like Secure Solar Futures provide upfront investment to schools, hospitals and other large buildings to install solar, according to CEO Tony Smith.
“They only pay for the energy that's produced by the solar array,” said Smith, who also serves as VA-DSA president.
But Dominion’s interconnection parameters made the math difficult for some midsize projects. Citing grid safety and reliability concerns in its response to VA-DSA's complaint, Dominion wants developers to install systems that automatically disconnect a solar facility from the grid to respond to — or prevent — an emergency.
If a nearby distributed generation source remains active while a worker thinks they’re servicing an uncharged line, that puts them at risk of electrocution. And generation and grid equipment can be damaged if a facility stays online when there’s not enough demand for its electricity.
Shutoff requirements aren’t new for solar installations, and systems in Virginia use a device called an “inverter.” But Dominion said in its filing that recent research and contemporary utility standards show the technology is insufficient.
Instead, the company wants midsize solar project developers with relatively low electricity demands to install another technology called a “direct transfer trip” and fiber optic cables to connect it to the grid. This system does the same job, but faster and more reliably, according to Dominion — and in a fraction of a second.
The company also said in its filing that scale is a factor. It does not currently require the same expensive equipment for home installations, because those systems are comparatively tiny.
VA-DSA's Smith said the cable costs $200,000 per mile to install, and some projects are miles away from the nearest interconnection.
“Before you know it, a project that should have cost $2 million would end up costing $3 million,” he said.
With the parameters now suspended, VA-DSA's Cleanthes and Smith said they hope solar developers can have a better relationship with Dominion, working more as partners than adversaries.
“At the end of the day, Dominion is going to be responsible for the safety, reliability and maintenance of our grid,” Cleanthes said.
Smith said coming to an agreement might require a restructuring of Virginia’s utility regulation system to provide better incentives for developing distributed resources, as opposed to centralized power plants.
“We believe that there's plenty of opportunity for Dominion to develop a smart grid, and to deliver services that strengthen and support distributed generation — which only will lead to a more reliable and safer grid,” Smith said.
But Cleanthes is worried that if the parameters are re-implemented, the smallest solar companies would be the first to fold or turn strictly to residential work, while bigger companies could exploit a lack of consumer protections in Virginia.
“Some of the largest solar installers who operate in our state are not always the best — but they're national, so they can absorb impacts that happen statewide and just keep going,” she said.
Until Dominion or the commission says so, it’s unclear how Virginia’s distributed solar landscape will look in the long run — or even the near future.
Editor's note: Dominion Energy is a VPM donor.