Many Solar Farms Coming to Virginia — Clean Energy Transition, Part 2

As solar farms multiply across Virginia, officials reckon with land use challenges
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From an Article by Sarah Vogelsong, Virginia Mercury, December 1, 2020
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Once upon a time, Virginia saw Halifax County as a golden place.

Just above the North Carolina border, in the heart of Southside Virginia, Halifax’s sunshine and abundant lands yielded some of the country’s largest crops of brightleaf tobacco. Mild and fragrant, the yellow-leaved variety sometimes known as “golden tobacco” sparked awe among visitors to the county’s auction warehouses and brought wealth pouring into the county. It was, the local historical society would later recall, the golden age of Halifax.

Today, the landscape is far different. The population has shrunk and is aging. South Boston, once an independent city that until the Great Depression was the second-biggest brightleaf market in the country, reverted to a town in 1995 after ongoing fiscal struggles. Tobacco is a shadow of its former glory.

Halifax, though, still has the two resources that once put it on the map: sunshine and abundant land. Together, they have made the county one of the most attractive in Virginia for solar developers looking to convert vast swathes of agricultural and forest lands into fields of solar panels capable of providing the thousands of megawatts of power needed for the 100 percent renewable grid lawmakers have pledged to create by 2050.

In Halifax, that looks like a sort of 21st-century gold rush. Over the past five years, the county has seen proposals for roughly a dozen large-scale solar farms. Eight projects covering some 5,500 acres have been approved, and County Administrator Scott Simpson said there’s room for more.

“The infrastructure that’s in place in Halifax as far as the power infrastructure that’s owned by the power companies is robust enough to accept more energy into that grid,” he said. And “Halifax has a lot of land that’s available around that infrastructure.”

Throughout Virginia, “we now see an increase of activity from larger players in the development game, including national or multinational companies,” said Matthew Gooch, an attorney with Richmond-based energy law firm Reisinger Gooch. “Those with the sophistication and know-how are entering the Virginia market given the certainty of demand for these projects.”

For large-scale solar, though, demand means land. And as the pace of development accelerates, Virginians will have to grapple with major changes to the Old Dominion’s landscape. Compared to coal and natural gas plants that emit pollution that is dangerous to human health, contributes to climate change and disproportionately affects low-income and minority communities, solar installations are low impact. But even advocates concede they have a larger geographic footprint, and tensions exist between rural areas that see themselves as bearing the burdens of the solar buildout and the urban areas that drive demand for renewables.

“The reality is there’s going to be a lot of solar going in — like, a lot,” said Jonah Fogel, a program manager with the University of Virginia’s Environmental Resilience Institute who has studied the overlap between the state’s renewables goals and local land use concerns. “For the average person driving down the roads, they’re going to be seeing energy in their life in a way that hasn’t happened before.”

A transition already underway

Virginia’s landmark Clean Economy Act of 2020 committed the state to an ambitious future of renewables rather than the fossil fuels it has long extracted from its southwestern mines and piped in from the shale fields. But for solar, the biggest changes came from a lesser-known package of laws that attempt to resolve growing tensions between rural areas and the solar developers increasingly flocking to them.

“We generally viewed solar with a jaundiced eye,” King and Queen County Administrator Tom Swartzwelder told more than 200 attendees at Virginia’s second Clean Energy Summit this October. “Like, ‘Well, that’s great, we’re going to get this 2,000 acre solar farm, and it’s going to support a new Amazon facility somewhere in Northern Virginia, and they’re going to have $1 billion of (capital expenditures) for this facility and 10,000 jobs, and we’re going to have a solar facility.’”

Unlike most other renewables, utility-scale solar was already on the upswing in Virginia prior to the VCEA’s passage. By the end of 2019, according to one developer’s calculation, plans had been announced for more than 17 gigawatts of solar energy in the commonwealth, most of it by non-utility developers. The Department of Environmental Quality’s permit by rule program, which reviews solar projects of between 5 and 150 megawatts, had seen applications grow from one in 2015 to more than 70 notices of intent in 2020.

Consequently, the VCEA’s mandate that by 2035 electric utilities Dominion Energy and Appalachian Power Company put forward plans for 16.7 gigawatts of new solar and onshore wind — the equivalent of nearly seven Coastal Virginia Offshore Wind farms — proved one of the least debated portions of the bill.

“The utility-scale sector was already robust. The VCEA just matched that,” said David Murray, executive director of the Maryland, Delaware, District of Columbia and Virginia chapter of the Solar Energy Industries Association, one of the biggest players in Virginia’s renewables sphere.

Still, as solar companies sought land across Virginia for their projects, counties began to balk. The rule of thumb given current technology is that for every megawatt of power, roughly 10 acres is required. DEQ’s permit by rule coordinator, Mary “Beth” Major, has calculated that the 50 projects already permitted by the department represent 27,000 acres of solar development. If all 70 projects in the program’s queue go forward, that figure will rise to almost 100,000 acres.

While some of those projects are likely to fail, others are certain to take their place. As it has for wind and energy storage, the VCEA has locked in demand for large-scale solar. Carveouts in the law requiring 35 percent of all new solar to come from non-utility developers also guarantees that while Dominion and Appalachian Power will be the primary offtakers of the resource, they won’t be the only ones in the game. Intended to reduce utility costs that could drive up customers’ bills, these provisions are in line with regulators’ preference for power purchase agreements over utility construction, which the State Corporation Commission says “provides significant safeguards for customers.”

In their earliest plans for how they will comply with the VCEA, Dominion and Appalachian have signaled their embrace of third-party development. Of the nearly 500 megawatts of solar Dominion proposed this October, more than 80 percent will come from non-utility companies. Appalachian Power’s plan would source half its first tranche of projects from third parties.

Whether the full 16.7 gigawatts will ultimately need to be built out remains a matter of debate. As was the case with offshore wind, the question of whether the Clean Economy Act’s declaration that 16.7 gigawatts of solar is in the public interest is a mandate for the commission to approve all solar projects up to that threshold remains unresolved. As Assistant Attorney General Mitch Burton noted during hearings on Dominion’s long-range plan this October, “Any commission determination over whether a public interest declaration equals a build mandate has significant implications for future customer bills.”

‘I’ve never seen anything move that quickly’

Even before the VCEA threw Virginia’s weight behind solar, the amount of land the projects required made Southside counties in particular nervous. The former tobacco- and textile-producing region has proven highly attractive to developers for its cheap, abundant land and large transmission lines that provide easy access to the electric grid. But its leaders feared losing too much land that they relied on for revenue and jobs.

“That’s land that will be out of production for agriculture or timber production for at least a generation,” said Simpson.

Solar developers and advocates argued tax revenues from solar farms far outstripped those from agriculture or timber. But many rural counties such as Halifax and King and Queen felt the arrangement was far from equitable. State solar incentives granted developers an 80 percent reduction in local property taxes and required that any projects larger than 25 megawatts be taxed according to the local real estate tax rate instead of the generally much higher machinery and tools tax rate.

“Over a cycle of 35 to 45 years, it really did not offset the impacts of solar,” said Simpson. “We’re giving up our natural resources, our land, and we’re not being compensated properly for it. And we felt like there should be a lot more equity there.”

As the 2020 General Assembly session drew near, the counties found themselves with unexpected bargaining power. The new Democratic majorities pushing for clean energy action needed solar development to not only continue but accelerate, and many projects were finding that the main bottleneck they faced was local approvals. Developers too were eager for a solution to smooth the path forward.

Three key laws ultimately emerged. One, known as the revenue share bill, allows localities to replace their machinery and tools tax for solar with an energy tax of up to $1,400 per megawatt for a project. A second reduces the machinery and tools tax exemption over time. The third allows virtually all localities to negotiate siting agreements with solar developers that can include incentives related to broadband or other projects already in local budget or capital improvement plans.

“We wanted to empower counties to develop the right set of tools to make these projects work if they want them,” said Drew Price, managing director of Hexagon Power, which is currently developing 10 solar projects in Virginia. The new laws, he said, have “enabled projects that were previously struggling to find the right set of agreements to make it a compelling local economic development opportunity.”

Local governments have been quick to flex their new power. Surry County has used the revenue sharing law to strike a deal with Spring Grove Solar. Others like Sussex have followed suit. A tool being developed by the Virginia Department of Mines, Minerals and Energy and the UVA’s Weldon Cooper Center will also soon let localities weigh the financial impacts of the revenue sharing route versus the reduced machinery and tools tax exemptions.

“We have seen in the last five months tens of millions of dollars through the siting agreements being pledged,” Swartzwelder, the King and Queen County administrator, told Clean Economy Summit attendees in October. “In my tenure, I’ve never seen anything move that quickly to pump revenue into rural Virginia.”

Balancing conservation with carbon cuts

Even as many local governments’ concerns about revenues have eased — although not disappeared; Simpson for one said he still doesn’t think counties are getting “the full value” of solar developments — land conservation concerns remain.

“When I’m looking at siting, and this has to do with any project … these lands are oftentimes the same lands that are providing us our natural resource benefits, our ecological system benefits,” said Dan Holmes, director of state policy for the Piedmont Environmental Council.

Under Gov. Ralph Northam, Virginia has placed an increased emphasis on conservation. The governor has set a goal of protecting the top 10 percent of the state’s “high conservation value lands” and in October 2019 established a special cabinet to address the issue by executive order. The state’s ConserveVirginia mapping tool is also regularly touted by the administration as a new frontier in state-level conservation efforts.

So what happens when the state’s two goals — solar development and land conservation — collide?

That’s increasingly likely to happen, said Fogel of the Environmental Resilience Institute: “As time goes on, we’re going to see upwards of 1 percent of Virginia’s land area taken up by solar.”

Conservationists fear that those commitments will chip away at the commonwealth’s valuable resources, ranging from concentrations of high-quality agricultural lands to forests that help prevent erosion and absorb the very carbon in the atmosphere that the renewables transition is trying to combat. Holmes pointed to the planned Cricket solar project in Culpeper, which was withdrawn in 2019, as an example: 75 percent of the land it was planned to cover is identified as top-priority land for conservation, he said.

Who is in the driver’s seat when it comes to solar land use decisions also remains murky. With their zoning and permitting powers, local governments are often the primary assessors of a tract of land’s best use, but their considerations tend to stop at the county line. State-level reviews do occur through DEQ’s permit-by-rule process, or other approvals overseen by the State Corporation Commission or DMME, but all are project-specific rather than offering a broad framework for new development.

Even a complete picture of what solar is being developed and where is lacking. Because projects can follow multiple permitting routes, information about what’s in the pipeline is scattered between agencies. A recently launched dashboard by the public-private SHINE partnership between Southside Virginia Community College and MDV-SEIA has aimed to fill the gap but operates outside the auspices of government.

Funding is one impediment. Despite the explosive growth in solar projects, DEQ’s permit by rule process continues to be overseen by a single full-time employee and is underfunded, with fees unchanged since 2012. Amendments to the regulations that govern the program still need Northam’s signature to go into effect.

The conservation question, then, may point to a broader question likely to dog legislators in coming years: Who is at the helm of the clean energy transition?

“It’s going to require a lot of cooperation,” said Bill Shobe, director of the Weldon Cooper Center at UVA. “One thing the General Assembly is probably going to have to tackle this year is what sort of administrative locus on state government should have the responsibility.”

(Second in a five-part series on the VA commonwealth’s transition to a carbon-free electric grid. Tomorrow: The push to ramp up distributed solar.)

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Tagged as: alternative fuels, clean energy, climate change, electrical storage, energy transition, Solar Farms, Virginia