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West Virginia Legalizes Solar Power Purchase Agreements

May 4, 2021


The West Virginia legislature has passed a bill to make it easier for West Virginians to benefit from solar energy. House Bill 3310 enables power purchase agreements (PPAs). PPAs are a widely available method to finance distributed energy generation projects such as rooftop solar panels. PPAs are now allowed in 29 states.

“Solar energy helps West Virginians save money and take control of where their electricity comes from,” said Autumn Long, Solar United Neighbors’ West Virginia program director. “West Virginia lawmakers made the smart decision to allow power purchase agreements so that more West Virginia families and businesses can benefit from solar energy.”

Under a PPA, a third party owns and operates a solar installation. The host customer buys the electricity the system generates at a fixed rate. This rate is typically lower than what the customer pays to their utility for electricity.

PPAs allow customers to benefit from distributed energy with minimal upfront costs. Customers see electric bill savings from Day 1 and are able to lock in long-term energy rates. This allows them to stabilize their monthly budget expenditures and protect themselves against utility rate increases. West Virginia had the fastest growth rate in electricity prices in the nation between 2008 and 2017.

The bill’s passage culminates a three-year long effort. Solar supporters across the state have worked diligently to educate lawmakers about the benefits of expanding solar access. The bill received broad support in both legislative chambers and passed 83-16 in the state House of Delegates and 33-1 in the state Senate.

“We commend the West Virginia Legislature for passing HB 3310, which will help to expand the use of clean, reliable and affordable solar energy in West Virginia,” said Sean Gallagher, VP of state and regulatory affairs at the Solar Energy Industries Association (SEIA). “Across the country, schools, businesses and homeowners are using power purchase agreements to significantly reduce upfront solar costs and advance a cost-effective, competitive energy solution. West Virginians will now have the freedom to use an innovative financial tool to invest in this clean, low-cost form of energy.”

PPAs are a financing mechanism that will enable West Virginia’s tax-exempt organizations such as churches and schools to benefit from federal tax incentives too. Under this arrangement, project developers benefit from the tax credit and can then pass the savings along to the customer. This development comes as Congress is considering a long-term extension of this key incentive.

PPAs will ultimately broaden access to affordable clean energy. States that allow third-party PPAs account for 93% of the increase in American solar capacity since 2015.

PPAs also are an important tool for economic development. Nearly 300 major global corporations have made corporate commitments to use 100% renewable energy, and PPAs make it easier for these projects to be built.

“This legislation tells the world West Virginia is open for business — solar business,” said Tony Smith, president and founder of Secure Futures Solar, a Virginia-based solar developer. “We have been in conversations with a couple of West Virginia public school districts about adding solar. They’re eager to save money and enhance their curriculum. Solar PPAs make this possible.”

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