Renewable Energy in Virginia: 5 Things You Need to Know

Understanding renewable energy can be complicated, but the reality is, electricity in Virginia is relatively cheap compared to other states.

The average household in Virginia pays $110 per month for electricity, Dominion Power spokesman Jim Norvelle said.

In Maryland, a Baltimore Gas and Electric customer who uses 1,000 kWh per month will pay between $125 and $132 month, according to that company.

Other states are even higher. A spokesman for Connecticut Light and Power said the majority of customers in that state pay $163 per month for 1,000 kWh of electricity.

So why bother with renewable sources when energy needs are already met at a good deal?

Here are five things you need to know about renewable energy:

1. The Virginia General Assembly has actually defined it for us: "'Renewable energy' means energy derived from sunlight, wind, falling water, biomass, sustainable or otherwise, (the definitions of which shall be liberally construed), energy from waste, municipal solid waste, wave motion, tides, and geothermal power, and does not include energy derived from coal, oil, natural gas or nuclear power. Renewable energy shall also include the proportion of the thermal or electric energy from a facility that results from the co-firing of biomass."

2. The most expensive form of energy that can be converted into electricity is offshore wind.The United States have no offshore wind farms. Massachusetts is developing a project called Cape Wind.

In Virginia, Norvelle said Dominion has been awarded for a $5 million grant from the Department of Energy to look at innovative ways to reduce the cost of offshore wind development by 25 percent. The company has also expressed an interest to lease an area off the coast of Virginia that could be developed into a wind farm.

3. The General Assembly has recommended that 15 percent of electricity in Virginia come from renewable energy sources by 2025. This is only a recommended benchmark. If providers meet that goal, they can receive bonuses, but they will not be penalized if they miss the goal. Many state legislatures, including Maryland and New Jersery, have created mandatory "renewable portfolio standards," that require electricity providers to generate a certain percentage of power through renewable sources.

4. Any other electricty provider can sell the renewable energy in the form of "renewable energy certificates." This means that even though renewable energy is generated in Virginia, it's not necessarily being used by Virginians. Jim Norvelle explains how it works. " In Virginia, we are allowed to use low cost renewable energy credits to meet the state’s voluntary renewable portfolio standard.

One way that we keep the rates reasonsalbe, we purchase low cost RECs from out of the state for our use and meanwhile we can sell higher cost higher cost RECs that we generate at our facilities to other markets out of state and the cost benefit – the savings we get on the transactions – benefits our customers in Virginia by keeping rates reasonable."

5. No state tax incentives exist in Virginia for homeowners to install solar panels. Last month, legislation that passed the General Assembly that would have made it illlegal for neighborhood associations to ban the installation of solar panels. 

Editor's Note: A previous version of this article reported that Dominion applied for a grant to study lowering the cost of producing electricity through wind power. That grant has been awarded. The article also incorrectly cited the average cost of electricty bills in Maryland and Connecticut.