Virginia Power, owned by Dominion Resources, has received approval from the Virginia regulatory commission to have a feed-in tariff (FiT) for up to 3 MW of solar power from residential and commercial installations. This would be a buy-all, sell all arrangement as was the case with Germany’s FiT. That is where the similarity ends, however.
Virginia Power has low electric rates, and the variable portion of their prices are too low to make installation of solar panels economic today. Their FiT of 15¢/kWh, while significantly higher than their variable price on a percentage basis, may still be too low to make the economics of solar work at current solar costs. And, the cap of 3 MW will ensure very little solar gets installed in any case.
There is nothing wrong with utilities having low prices, as long as the cost of their pollution is included in the variable portion of their rates. If solar does not work at current prices, that is OK too. Let’s just make sure we recognize this for what it is, which is really not much.
Dominion Virginia Power’s demonstration Solar Purchase Program will allow qualifying solar customer-generators to sell all their sun-generated electricity to the utility company for five years and at the same time purchase all of their electricity from the company at their current rate.
“We will buy all of their generation and pay them 15 cents a kilowatt-hour,” Corsello said, “and the customers will buy all their energy from Dominion at an average price of about 10.5 cents per kilowatt-hour.”