The Virginia Clean Energy Advisory Board (CEAB) is reconsidering how to launch a solar pilot program for low-to-moderate-income (LMI) residents of Wise County after a request for proposals (RFP) for financing and installation contractors closed without any submissions.

Taylor Brown delivered the bad news to his colleagues on the board at its Aug. 22 meeting. “There were no respondents to the RFP, but there was a lot of actionable comment to issue an improved one,” said Brown, who is the chief technical officer at Charlottesville, Va.-based Sun Tribe Solar, a solar engineering, procurement and construction firm.

Solar companies gave three main reasons for not wanting to participate, he said, though different firms weighed the factors differently. First, only a small number of contractors can install the necessary equipment. Second is uncertainty over how residential solar leases are regulated in Virginia, a matter on which the state’s Office of the Attorney General is expected to issue an opinion by October. Third, Brown said, is the questionable viability of Virginia’s residential solar leasing market beyond the two-year term of the funding in the RFP. Solar companies say they want to offer their product to everybody, not just designated LMI residents, he said.

Wise County in southwest Virginia was one of five sites proposed for the pilot project by the Clean Energy States Alliance, which received a grant to assist the state and CEAB in developing the pilot.

Carrie Hearne, associate director of energy equity programs at Virginia Energy, said that there are three or four companies that could participate in a revised RFP. “Several other companies were familiar with it, but they didn’t have the bandwidth, or the incentives didn’t match their business model,” she said. “Every company had different considerations.”

‘Very Limited Amount’ of LMI Solar Power in Virginia

“There is a very limited amount of LMI solar that is currently operational in Virginia,” Brown said.

Virginia has nearly 500,000 LMI single family owner-occupied households potentially suitable for solar production with a potential capacity of 3,111 MW, according to the RFP. Wise County has 3,067 LMI owner-occupied households with potential solar capacity of 23 MW.

The Virginia Clean Economy Act of 2020, which took effect last year, requires Dominion Energy (NYSE:D) to obtain 14% of its power from renewables in 2021, rising to 41% by 2030. The law includes a carveout requiring at least 1% of the renewables come from solar resources of less than 1 MW, a quarter of that from LMI projects, Brown said.

The law requires Dominion to pay $75/MWh for any shortfalls on the 1% carveout, “a decent amount of added revenue into a third-party financier’s model,” but one that was apparently not “properly factored in” by companies that were considering participating in the failed RFP, Brown said. Potential bidders in the next RFP would benefit from more clarity on this score, he said.

“We’re trying to sell a niche product for which there is no market anywhere in Virginia,” Brown said. “So we need to have companies that are going to finance the back end. That’s as difficult as the contractor end, from what we’re hearing.”

Austin Counts of Virginia Energy expressed optimism, saying the residential solar market is still growing. “We have talked with at least four different installers [in the Wise County area], and we plan on reaching out to several more — there are about 15 on our list. We will hold meetings through mid-September.”

Board member John Warren, director at Virginia Energy, suggested rethinking “how we are doing this process for this pilot project.” He proposed setting a “unit cost” for Wise County households, so that “we can tell installers, that is what they will get paid.”

The full board agreed that its Program Development Committee will work on the RFP revision and present a new draft at the next board meeting in October.