A New Approach for AI Data Centers to Contribute Positively to Virginia’s Energy Landscape

Yesterday, the Virginia Mercury published a guest commentary by Secure Solar Futures CEO Tony Smith. An excerpt is reprinted below. Read the whole piece on the Virginia Mercury website.

A modest proposal for AI data centers: Invest in small and local solar projects

Purchasing Virginia solar renewable energy credits (SRECs) will enable data centers to support communities, lower peak energy demand, and reduce the tax burden, writes guest columnist Anthony Smith.

Over the past decade, Virginia has become home to more than 650 data centers — the largest concentration on Earth — including roughly 150 hyperscale facilities operated by Amazon, Microsoft, Google and Meta. Loudoun County alone hosts nearly 200 operating sites, with more than 100 additional facilities in development. 

Regulators and lawmakers are now confronting soaring peak demand and rising grid costs for Virginia ratepayers.  Now is the moment for the commonwealth to adopt a straightforward, market-based solution that delivers more affordable energy and ensures data centers pay their fair share — all for only a modest contribution.

Data center growth has come at a cost. They already consume more than one-quarter of Virginia’s electricity, a share projected to approach half of statewide demand by 2030. Dominion Energy has told regulators that serving this new hyperscale load will require billions of dollars in new generation and transmission infrastructure — costs increasingly passed on to ordinary Virginians through rate hikes.

As it is, Virginia imports roughly 39% of its electricity — more than any other state — according to the U.S. Energy Information Administration, buying much of that power at a premium. Options to meet that demand require five to ten or more years of development, whether new natural gas, small modular nuclear, or utility-scale solar. In contrast, small-scale rooftop and ground-mounted solar can be built and interconnected in less than a year…

…Here’s the proposal: Data centers would contribute a small percentage of their avoided state sales-tax liability each year toward purchasing Solar Renewable Energy Credits (SRECs) under the distributed generation (DG) carve-out for small-scale solar projects operating in Virginia. Each SREC represents one megawatt-hour of solar generation; purchasing them helps finance projects and provides verifiable carbon offsets to the buyer.

Click here to read the rest…