Uber, Solar & Innovation: How to Drive Virginia’s New Era Economy

Many of us in the so-called “millennial” generation embrace innovation and disruption of established practices as the wave of solutions to today’s most critical problems.

Uber is a driver of  innovation
Uber – once banned in VA – is now “driving” innovation

That’s one reason we love Uber, the ride-service springing up throughout the country. And it is also why we have trouble reconciling the rhetoric of policymakers who champion free enterprise with their actions protecting the established industries. Until recently, Virginia banned Uber. With recent relaxation of the restrictions, we are now seeing what economic theory would easily predict: a race by established companies to adapt, and a better, more efficient system of rides and transportation for consumers.

As a recent article in the Times-Dispatch reported, the growing popularity of Uber in the city of Richmond has led one taxi company at least to respond. Chris Brevard of Napoleon Taxi explains that it “made us realize as owners of large fleet that if we don’t advance, we are going to be left behind.” Taxi companies can see from the advancement in transportation areas that they need to do more to help themselves, this is where companies like Lytx can help with fleet management for taxis and other car corporations, so they are kept up to date and safe for passengers.

Senator Marco Rubio - a solar opponent - argues
Senator Marco Rubio – a solar opponent – argues “regulation should never be a weapon used to crowd out innovation”

Innovation matters, and the receptivity of governments, producers, and consumers, to the risk but also the possibility of new technologies and new patterns determine the kind of future we build for ourselves. “Regulation should never be a weapon used by connected and established industry to crowd out innovation and competition, and this (Uber) is a real-world example,” is how Republican Florida Senator Marco Rubio puts it – ironically a notorious solar barrier himself. Yet I agree with him.

Which is why I believe Virginia has a solar problem.

Virginia continues to face a $2.4 billion budget gap, while North Carolina is a leading state in installed solar capacity. The Tar Heel state’s leadership is reaping economic rewards, hosting companies that support 4,300 jobs and represent a $2 billion investment in the state.

Sen. Frank Wagner's SB 1349 suspends review of earnings by the SCC for Virginia's IOUs
Sen. Frank Wagner’s SB 1349 suspends review of earnings by the SCC for Virginia’s IOUs

Instead of looking south to watch a case study in innovation and its rewards, Richmond turns to Dominion for the answers – a company operating within a regulated framework, and now having successfully marketed a base-rate freeze bill that will suspend regulatory review on Virginia’s largest IOU’s earnings. In attempts to silence critics, proponents of the bill added a “solar thing” which includes a statement that 400 Megawatts (MW) of solar is in the public interest. For reference, Virginia to date has an installed capacity of 20 MW.

Is this innovation at work? The door may be open at the risk of creating an avenue for business as usual.

If Dominion builds and owns these systems, it will reinforce the false rhetoric in Richmond regarding the cost of solar to ratepayers. Not because Dominion may – possibly – build solar in Virginia, but because of how they might do so.

This is because a utility cannot absorb the tax credits and rapid depreciation in the same way for-profit companies can. Instead, utilities are required to take the tax credits and depreciation benefits over a longer term, therefore decreasing any value for investors and increasing the cost to ratepayers. This is not an efficient use of capital and far from an innovative response to installing solar. It is a marketing stunt – its business as usual – and it will not create the sustained clean-energy economy Virginia aches for.

On the other hand, for-profits developers (i.e. the private market) absorb the rapid depreciation in 5-years, drastically increasing an investor’s return. Third-party developers can utilize the tax credits while reducing the cost of solar for utilities after the tax recapture period and, ultimately, the ratepayers. This is how you support a clean-energy economy that will generate the investment dollars the Commonwealth is starving for. This is innovation, and this is the opportunity an otherwise dominion-centric bill is opening the door for.

North Carolina utilities operate in a regulated utility market, yet solar is celebrated in the state. Virginia needs to choose to remove regulation as a weapon to crowd out innovation. Yet, if Richmond is going to turn to the regulated market to solve problems, let’s challenge Dominion to demonstrate its responsibility to ratepayers through partnerships with Virginia private markets – developing a truly innovative response to Virginia’s economic future.


Written by: Tony Smith

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