Client Alert: Virginia Rooftop Solar Economics Change in Dominion Territory, Affecting Capital Planning and Project Design
Date: May 6, 2026
By:
Dale G. Mullen
Last week, the State Corporation Commission (SCC) approved Dominion’s “NEM 2.0” tariff and set a new export credit rate of 5.829¢/kWh for customers who send more electricity back to the grid than they use over the annual netting period. That figure combines a 4.829¢/kWh avoided-cost rate with an additional 1¢/kWh to reflect avoided Renewable Portfolio Standard (RPS) compliance costs—explicit recognition that customer-owned solar reduces Dominion’s need to procure renewable energy to meet statutory targets.
At the same time, the SCC left the core mechanics of Virginia net metering in place. Existing customers keep their current tariff. New customers will continue to offset their consumption at the retail rate first, carry forward excess as kilowatt-hour credits over 12 months and see the 5.829¢/kWh rate only on any true surplus at the end of the year. The Commission rejected Dominion’s proposal to convert net metering into a 30-minute buy-and-sell construct with dollar-based credits and declined to add a new application fee, while allowing a $1 per month administrative charge for NEM 2.0 customers.
For businesses and homeowners evaluating solar—or operating solar-backed facilities—three effects are likely to be most immediate:
1. System sizing becomes more critical. Oversizing beyond a facility’s load profile is less attractive financially when year-end surplus is compensated at 5.829¢/kWh rather than at a rate that roughly tracks full retail under the legacy structure.
2. The export credit is now formula-driven. By tying the rate to avoided energy and capacity costs plus a quantified RPS benefit, the SCC has created a clearer framework for valuing surplus energy and signaled that future adjustments will be grounded in cost-benefit analysis rather than wholesale structural change.
3. Value shifts toward integrated energy management. With tens of thousands of Virginia homes already using rooftop solar and large new loads, including data centers, coming onto the grid, the strongest economics will come from matching solar to on-site demand—potentially with storage, time-of-use rates and demand flexibility—rather than relying on export credits alone.
2. The export credit is now formula-driven. By tying the rate to avoided energy and capacity costs plus a quantified RPS benefit, the SCC has created a clearer framework for valuing surplus energy and signaled that future adjustments will be grounded in cost-benefit analysis rather than wholesale structural change.
3. Value shifts toward integrated energy management. With tens of thousands of Virginia homes already using rooftop solar and large new loads, including data centers, coming onto the grid, the strongest economics will come from matching solar to on-site demand—potentially with storage, time-of-use rates and demand flexibility—rather than relying on export credits alone.
For Virginia companies, this turns rooftop and distributed solar from a straightforward equipment purchase into a regulatory and financial design exercise. The same array can produce very different returns depending on how it is structured under NEM 2.0, which tariffs apply, and how it is integrated with broader capital and energy strategies.
If you are reassessing an existing portfolio or modeling new investments in light of the SCC’s order, feel free to contact Dale Mullen to discuss how these changes apply to your specific facilities and plans.
The information contained here is not intended to provide legal advice or opinion and should not be acted upon without consulting an attorney. Counsel should not be selected based on advertising materials, and we recommend that you conduct further investigation when seeking legal representation.