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Virginia Mercury: Virginia Made Big Commitments to Renewables. What Does the Economic Slump Mean for them?

Posted by Sarah Vogelsong on Mar 27, 2020

Virginia Mercury covered how the current economic and financial crisis may affect implementation of the Virginia Clean Economy Act, quoting AEE's JR Tolbert and AEE member Sigora Solar's Karla Loeb. Read excerpts below and the entire Virginia Mercury piece here. 

Three weeks ago, Virginia’s Democrat-led General Assembly passed the most ambitious plan for transitioning off of fossil fuels and onto renewable energy sources to come out of the South yet. It was a banner moment for environmentalists. Among the promises they secured were state commitments to build out 24 gigawatts of solar, wind and energy storage by 2035 — almost 40 percent more than the existing capacity of the fossil fuel units owned by the state’s largest utility, Dominion Energy — and annual targets that would bind the utilities to progressively including more and more renewables in their energy portfolios. Then the new coronavirus hit, and the financial markets tanked.

“Our early estimates are that our industry is going to be halved,” said Karla Loeb, chief policy officer of Charlottesville-based Sigora Solar...

Loeb isn’t alone in her fears for the industry: a recent survey by clean energy business group Advanced Energy Economy found that 43 percent of their members have already stopped hiring new workers, while 29 percent have begun layoffs. Loeb said she was aware of at least one Virginia firm that had already laid off 12 percent of its workforce...

Federal tax credits for wind and solar have been in place for wind since 1992 (with some interruptions) and for solar since 2006, and the expiration dates for both have been extended several times. Most recently, Congress agreed to keep the wind credit alive until the end of 2020 and the solar credit until 2022. But given supply chain disruptions caused by COVID-19, industry members say those expiration dates no longer make sense. Developers “are already seeing project delays from the supply chain piece,” said J. R. Tolbert, managing director of Advanced Energy Economy, which was active in passing Virginia’s Clean Economy Act...

The most recent push for federal aid may have failed, but many renewables advocates said they are confident the measures will be considered again in later rounds of assistance. “Everything I hear is that this isn’t the last package,” said Tolbert. “So it’s not as dire as some folks may try to paint the picture.” Both Loeb and Tolbert said that on a state level, the declaration of renewables development as an essential industry could provide some relief by allowing work to continue even as states order all residents to stay at home. Washington State has already done so, as have Massachusetts and Oklahoma, among others...

Renewable energy “is one of the fastest-growing sectors of the economy that we have,” said Tolbert. “Frankly, launching an industry in the U.S. at a time to come out of an economic recession or, God forbid, an economic depression is a good thing...” 

Offshore wind build outs, too, are still several years in the future, said Kiernan and Hensley. And energy efficiency and solar rooftop installations that could reduce electric bills may prove even more attractive to customers looking at tighter budgets, particularly cash-strapped local governments and school districts, Tolbert pointed out. “Localities have been making those investments because it’s more cost-effective for them to meet their energy demand,” he said. “Those economics don’t change...”

Read the entire Virginia Mercury piece here. 

Topics: AEE In The News