In an off-year with no national political races, this fall’s election season was far tamer than last year’s. But it still turned out to be a very important election for energy and environmental groups.
Environmental advocates spent millions of dollars in the lead-up to November’s state and local elections in order to influence coal exports in Washington state, grid municipalization in Boulder, Colorado, and fracking in four cities across Colorado.
One of the most watched (and well funded) races was in Virginia, where Democrat Terry McAuliffe ran against the state’s Republican Attorney General Ken Cuccinelli, a man who has devoted the latter part of his career to battling the scientists he sees as engaging in a frenzied “climate-change witch hunt.”
Billionaire climate activist Tom Steyer led a spending bonanza in Virginia, where he threw down $8 million of his own money to defeat Cuccinelli. Environmental groups like the League of Conservation Voters and Sierra Club accounted for roughly $2 million more, making these activists the second-biggest donors to McAuliffe, just behind the Democratic Governor’s Association.
“Over the next twelve months and beyond, the Sierra Club’s 2.1 million members and supporters will build on this momentum and fight to elect clean energy champions and hold climate deniers accountable across the country,” said Sierra Club President Michael Brune in a statement after McAuliffe won the race.
However, defeating climate deniers by outspending them is only one part of the game. The process of actually implementing policies to build a clean energy market in a historic coal state like Virginia is a greater challenge — one that may require more finesse than brute political force to overcome.
“We definitely have an opportunity here with the election of McAuliffe,” said Francis Hodsoll, president of the clean energy consulting firm E&E Frontiers, in an interview. “Now we need to think about how we create more options and find what pushes the ball down the field.”
As former executive director of MDV-SEIA and founder of the advocacy organization VA Advanced Energy Industries, Hodsoll has been active in the Virginia renewable energy scene. He and other advocates are hoping the election of McAuliffe will help create more momentum for policy improvements in the state.
There are a couple of factors working in favor of the expansion of renewable energy, particularly solar, in Virginia. During the election, McAuliffe explicitly called for more incentives to support the industry. And the state’s largest utility, Dominion Power, is experimenting with a pilot program that could bring in 50 megawatts of third-party-financed solar projects over the next few years. If that program goes well, the state corporation commission may followGeorgia’s lead and set bigger mandates for solar procurement.
“Virginia’s path to growth is expected to mirror the evolution of demand in Georgia, where growing political will for solar will shift the market from pilot procurement programs to large-scale solar mandates set by the state’s PUC,” said GTM Research solar analyst Cory Honeyman, who will be hosting a panel discussion at the GTM Solar Market Insight conference in December on new growth markets, including Virginia.
But there numerous factors working against the solar market as well. Conservatives still hold a supermajority in the Virginia state legislature, making it tough to push any mandatory renewable energy targets with a solar carve-out. And although Virginia’s coal sector has been in decline for two decades, the industry still wields considerable influence in state politics.
Virginia’s tax structure also makes it hard for solar and other distributed generation to compete. The state’s machinery and tools tax is particularly cumbersome for developers, who pay $2.30 for every $1,000 spent on certain pieces of hardware. In order to get around the tax, developers must build in six months of lead time to lobby county officials for an exemption. On top of that extra time and cost, there’s no state tax credit for solar, either.
Even Virginia’s net metering policy places standby charges on solar systems over 10 kilowatts, adding yet another cost to the solar market.
“The barriers in Virginia are not technical or related to resources — they are political and regulatory,” said Chris Quarterman, director of strategic planning at HelioSage Energy, speaking on a panel at last week’s MDV-SEIA Solar Focus conference. “It’s very hard to create a market.”
Faced with such a difficult set of challenges, solar advocates are looking to rack up some modest regulatory wins, rather than focusing on a campaign to support broad renewable energy targets.
“I think there are a lot of different levers to pull,” said Hodsoll of VA Advanced Energy Industries. “Tax policy is probably a good one that can create a broad coalition of support from people who may not be coming at this from a strictly solar or renewables angle.”
Hodsoll believes there are two possible framing strategies that could help build momentum for reform.
One is talking about consumer choice within the corporation commission and the legislature in order to put pressure on Dominion Power to expand its renewables procurement. That strategy worked in Georgia, where Tea Partiers, environmental groups and consumer advocates recently banded together to force the inclusion of an additional 525 megawatts of solar in Georgia Power’s integrated resource plan.
The other strategy involves crafting a narrative around jobs and innovation that can help fill in the gap left by the declining coal industry. As coal jobs continue to dwindle and Virginia grows its high-tech economy, Hodsoll said that legislators are becoming increasingly open to renewables, particularly for rural economies.
But getting Virginia to embrace solar and other renewables may depend as much on happenstance as on skill.
“Often, you see something happen that focuses public attention on the issue. We have to have the pieces in place for when that moment happens,” said Hodsoll, referring to Superstorm Sandy as a catalyst for getting East Coast utilities to invest more in distributed generation as part of resiliency planning.
There has yet to be a catalyst in Virginia politics to create momentum in favor of renewables and the solar market. Although Governor-elect Terry McAuliffe campaigned in support of clean energy, it’s unclear how much he’ll push the legislature on the issue.
“Until McAuliffe fights for it, these are just ideas on a piece of paper,” said Hodsoll. “But I think the debate and the boundary lines are shifting in the right direction.”
Source: Greentech Media. Reproduced with permission.