Will Harrisonburg businesses support Friendly City Solar? HEC is asking.

A picture of a yard sign advertising the Friendly City Solar program
Customers who sign up for the Friendly City Solar Program receive a yard sign like this one outside the HEC’s building on North Liberty Street. (Photo by Eric Gorton)

The Harrisonburg Electric Commission is surveying about 850 commercial customers to find out how many would be interested in purchasing clean energy through the Friendly City Solar program.

The decision to potentially open the community solar program to businesses follows nearly 18 months of lackluster support from residential customers. Since Friendly City Solar launched in fall 2022, it has only been open to residential customers. 

As of late April, Friendly City Solar had 327 subscribers who were purchasing about 64% of the energy that the Acorn Drive solar plant is producing, HEC General Manager Brian O’Dell said.

Customers were limited to purchasing a maximum of 25% of their energy through Friendly City Solar when it began to allow as many people as possible to participate. With the 25% cap, 1,000 customers could subscribe for that amount.

In May 2023, the HEC board voted to allow subscribers to pay for up to 50% of their average monthly energy through Friendly City Solar and also discussed opening the program up at some point to commercial customers. In February, the board voted to allow residential subscribers to get 100% of their energy from Friendly City Solar and to create the survey for commercial customers.

O’Dell told the HEC Board in April that 92 of the 327 customers had opted to get 100% of their energy through Friendly City Solar.

HEC sent information to businesses last week explaining the program and linking to an online survey that asks them their level of interest — very interested, somewhat interested or not interested.

The survey also states the program would allow businesses to purchase up to 50% of their average monthly usage and asks them what percentage they would purchase if they could.

The energy is sold in 50 kilowatt hour (kWh) blocks and each 50 kWh block purchased through Friendly City Solar costs $1.50 more than 50 kWh of regular grid energy. The information sent to businesses explains that solar energy costs more because, “Solar energy costs more to produce than traditional grid energy.”

Locking in long-term prices

Zach Nyce, manager of engineering for HEC, told The Citizen in September that it costs Dominion Energy, owner of the Acorn Solar plant, more to produce energy there than at large base load plants because it’s not as efficient to generate power on such a small scale.

Consisting of more than 4,000 crystalline silicon bifacial panels that pivot to stay in line with the sun throughout each day, the plant can generate as much as 1.43 megawatts during peak operating times and is expected to produce approximately 3 million kWh annually. That’s enough electricity to power 250 homes based on average home usage of 1,000 kWh per month.

The benefits, according to the flier to businesses, are avoiding fluctuating electric costs with fixed rates for 25 years. 

“Even if the price of electricity rises, you won’t pay more for your solar portion,” the flier states. “You will also benefit from reducing your carbon footprint and supporting green energy initiatives in Harrisonburg.”

Other benefits include not having to install and maintain solar panels and not having to pay a fuel charge that is added to the cost of regular grid energy.

HEC’s decision to poll commercial customers about Friendly City Solar comes at a time when the utility is raising the rate on regular grid energy for the second time in 11 months. Beginning June 1, HEC customers will be charged 5% more per kilowatt hour, but like last July, when HEC raised the base power rate 6%, customers will see lower bills because the added fuel cost is dropping more than 50%.

O’Dell said the lower fuel cost will reduce the monthly bill by $5.45 based on an average residential customer using 1,000 kWh a month.

“In essence, the rate increase itself would have increased the bill by $5.00, however the $10.45 reduction in fuel savings results in a net savings of $5.45,” he said in an email to The Citizen.

Sunshine amid fossil fuels

HEC purchases power from Dominion Energy, which generates much of its electricity with fossil fuels. A large portion of that is natural gas. When fuel prices fluctuate, Dominion passes on the changes, up or down, to HEC, which adjusts its customers’ bills.

The average residential bill increased by more than $29 a month between November 2021 and November 2022 because natural gas prices skyrocketed. Before November 2021, the fuel cost adjustment was 0.4 cents per kWh, which added $4.39 to the average bill.

Since August 2022, the price of natural gas has fallen from $8.8 per million British thermal units to $1.5 Btu in March, according to the U.S. Energy Information Administration.

Barron’s reported in February that natural gas prices fell 40% between late 2023 and the start of this year, mainly because of a mild winter.

“The price drop is one of the rare cases in finance when people can actually blame it on the weather,” the news outlet reported. “Natural gas is primarily used for electricity-generation and heating. Aside from a week of bitter cold temperatures in January, the winter has proven unseasonably warm . . ..”

Monthly bills show the fuel charge as a separate line item labeled, “Power Cost Adj. Factor.” That cost has been $0.01852 per kWh (1.85 cents) and will now be $0.00807 (0.8 cents) per kWh.

O’Dell said in his email, “We were glad to see the fuel costs drop even lower than our estimates, as this is not only good news for our residential customers, but certainly all customers, particularly those businesses and industries within our community that are energy intensive.”

An offshore wind project Dominion is building off Virginia Beach and Virginia’s participation in the Regional Greenhouse Gas Initiative are among factors leading to higher wholesale energy costs, he said.

Before last year, HEC had not increased the base rate for power since 2016.

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