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Virginia Democrats Shelve Solar Fee That Would Have Raised Electric Bills

Amazon has partnered with Dominion Energy to build over 19 solar farms in Virginia, including this one in Disputanta. (Drew Angerer/Getty Images)

Reagan Campbell is an intern for The Daily Signal.

Virginia Democrats this week shelved legislation that would have raised costs on consumers to fund a solar energy promotion program.

The decision to table HB 935 means that Virginians won’t be hit with an added fee on their electricity bills—at least for now. Democrat Gov. Abigail Spanberger promised to make affordability the centerpiece of her agenda, even though her fellow Democrats have proposed more than 50 tax hikes.

The “clean energy” legislation would have imposed a fee of 2 cents per watt on solar energy and battery storage projects statewide. Even though developers would pay the charge upfront, industry experts predicted the costs would ultimately be passed on to ratepayers through higher electricity bills.

Revenue generated from the legislation would create the Virginia Clean Energy and Battery Storage Promotion Program, which, according to the bill, would “promote the adoption, deployment, and understanding of solar energy and battery storage technologies.” 

Similar measures are pending in other Democrat-led states, including California, Illinois, and Maryland.

Politically Active Program Funded by Energy Fees 

The proposed fee would fund a program explicitly authorized to engage in lobbying, political advocacy, and coordination with national organizations. 

Jack Spencer, senior research fellow in the Center for Energy, Climate, and Environment at The Heritage Foundation, said the bill would put the government in a position of making energy decisions that should ultimately reside with consumers.  

“The Virginia Clean Energy and Battery Storage Promotion Program is another attempt by government officials to use taxpayer money to decide how citizens should live their lives that will most assuredly wind up being another costly boondoggle,” Spencer told The Daily Signal. “The idea that a government board and a bureaucrat have the knowledge to develop markets and reduce prices flies in the face of every economic lesson learned over the past century.” 

Spencer’s solution “is to allow battery firms to compete for the dollars of Virginians in a system of free enterprise. Such a system ensures that Virginians get the products they want at prices they are willing to pay.” 

The Daily Signal spoke with another energy industry expert, who requested anonymity to speak candidly about the bill. 

“What’s surprising is how open-ended the program is, with no clear direction on how the money would be used or who would ultimately benefit,” the industry expert said. 

The bill does not specify how funds would be allocated among marketing, lobbying, or political activity, nor does it identify the national organization that would receive a portion of the revenue. 

This is what led the expert to raise the question, “Who are the individuals that are behind it and pushing this?” 

How the Solar Fee Would Affect Ratepayers  

The proposed fee on all solar and battery installations would apply across Virginia and cover both local and out-of-state manufacturers. Developers are responsible for paying the charge at the point of purchase, but the cost is typically passed to ratepayers, raising electricity bills for households and businesses. 

One example is Dominion Energy’s four solar projects, which are set to be completed this year. The projects total 329 MW, and at 2 cents per watt, would cost electric customers $6.48 million. 

“If there’s a tax added to solar panels, that would get passed along to the installer and to the homeowner,” the energy industry expert said. “For a big utility-scale project, that’s adding millions of dollars to the cost [and] all ratepayers would have to incur those costs.” 

How the Program Would Operate  

The program would be overseen by a board appointed by the governor. Structured as a 501(c)(6) trade association, it could have the authority to promote solar and battery storage while also lobbying, contributing to PACs, and coordinating with national organizations. 

The industry expert explained the program’s structure and use of funds, warning that it appeared driven more by ideology than consumer needs. 

“Half of the funds would be utilized and spent in some manner, either marketing, lobbying, what have you; that’s still pretty vague,” the expert said. “In Virginia, the other half would go to a national entity, again, to be named later, of some sort of organization that would then do national marketing on clean energy.” 

The legislation is sponsored by Delegate Alfonso Lopez, who represents parts of Arlington and Alexandria. After advancing in the House Labor and Commerce Committee, lawmakers decided Tuesday to table it until 2027. 

Similar legislation in California, Illinois, and Maryland could still advance this year. Those Democrat-led states may be more likely to move forward with clean energy initiatives despite concerns about rising utility costs. 

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