by Autumn Long, Solar United Neighbors
The 2020 regular session of the West Virginia Legislature is drawing to a close without action on solar Power Purchase Agreements (PPAs). After several false starts in the state Senate and House of Delegates, legislation supporting PPAs failed to materialize this year.
Solar United Neighbors and our partner, West Virginians for Energy Freedom, are preparing to fight again in 2021.
The big picture: A Power Purchase Agreement is a common and popular financing tool. PPAs allow a developer to build and own a solar array on a host customer’s property. The property owner purchases the generated electricity at a fixed rate — typically lower than what the local utility company charges — for a set time period, usually 15-25 years.
- Similar to leasing, PPAs allow property owners to go solar with little to no upfront cost.
- PPA customers lock in long-term electric rates, which helps to stabilize their monthly budgets and avoid utility rate increases.
- PPAs are legal in at least 28 states, including West Virginia’s neighbors Virginia, Maryland, Pennsylvania, and Ohio.
The problem: PPAs are not explicitly legal in West Virginia — although they’re not explicitly illegal either.
- This leads to confusion about whether or not PPAs are allowed in West Virginia.
- The lack of clarity prevents most solar developers from offering PPA contracts to their West Virginia customers.
The solution: Lawmakers could pass legislation to clarify that PPA are legal in West Virginia.
- Or… the state’s Public Service Commission (PSC) could issue a ruling to clarify whether PPAs are legal under current laws.