A Landmark Ruling in Virginia Shakes Up the Solar Debate
Virginia just handed rooftop solar homeowners a major victory. In September 2025, the Virginia State Corporation Commission (SCC) struck down a utility company’s attempt to slash net metering compensation by more than 70%. Appalachian Power wanted to reimburse homeowners with solar panels at the much lower “avoided cost” rate of around 5 cents per kilowatt-hour instead of the retail rate of 17.5 cents/kWh.
The SCC rejected the proposal and ordered the utility to maintain 1-to-1 net metering, where homeowners receive full retail credit for every unit of excess electricity they feed back into the grid.
This decision comes at a pivotal time. Across the U.S., utility companies have been pushing back hard against net metering programs, arguing that solar customers shift grid maintenance costs onto others. California regulators already moved to a reduced credit structure in 2023, resulting in an 82% collapse in new rooftop solar connections, according to CalMatters.
Virginia has now taken the opposite stance by protecting rooftop solar customers and strengthening the policy framework that makes residential solar financially viable.
Why This Matters for Michigan
Michigan solar homeowners do not currently enjoy the same protections. After a 2018 law change, Michigan replaced traditional net metering with a Distributed Generation (DG) credit system. Under DG tariffs, solar customers are reimbursed at the utility’s avoided cost rate (often just a fraction of the retail price), not at the full retail rate.
The Virginia ruling raises a big question: Could Michigan move back toward stronger homeowner compensation? Advocates could use Virginia’s decision as proof that utilities benefit from solar in ways beyond raw electricity value, including:
- Meeting renewable energy standards without buying extra credits.
- Reducing peak demand costs on the grid.
- Providing local economic benefits through solar adoption.
If Michigan regulators or lawmakers take note, the state could see renewed debate on whether the DG system unfairly limits rooftop solar adoption.
Implications Nationwide
The Virginia ruling has ripple effects far beyond state lines:
- Sets Precedent: Regulators in other states can point to Virginia as a model for upholding fair solar compensation.
- Pushback Against Utility Arguments: By rejecting the “cost shift” claim, the SCC affirmed that rooftop solar offers broader system benefits.
- Potential Market Boost: Stronger net metering policies make rooftop solar more attractive to homeowners, potentially increasing demand across the U.S.
With federal tax credits still at 30% through 2032, net metering decisions like Virginia’s could accelerate adoption at the exact moment the industry needs momentum.
What Consumers Should Watch For
For Michigan homeowners and consumers nationwide, here are the key takeaways:
- Policy Risk Is Real: Your solar savings depend heavily on state and local policy. A single ruling can add or erase thousands in lifetime value.
- Timing Matters: With federal credits phasing down after 2032 and state-level fights ongoing, acting sooner can secure stronger financial returns.
- Momentum Is Building: As states like Virginia push back against utility pressure, consumers elsewhere may see stronger protections emerge.
The Bottom Line
Virginia’s ruling is being hailed by solar advocates as “a big win” for homeowners, clean energy, and the state’s energy transition. For Michigan, where net metering has already been replaced by weaker compensation, it underscores the uphill battle to make rooftop solar more financially rewarding.
Nationwide, the case demonstrates that policy decisions at the state level will continue to shape the economics of solar more than technology alone. For homeowners weighing solar, the message is clear: stay informed, act while incentives are strong, and pay close attention to regulatory battles in your state.
Sources
- Michigan.gov — Distributed Generation Program details from Michigan Public Service Commission. Michigan.gov
- Virginia SCC — Net Metering rules and regulations from the State Corporation Commission. Virginia SCC
- SELC (Southern Environmental Law Center) — Press release about the APCo proposal and SCC decision. Southern Environmental Law Center
- DSIRE USA — Virginia net-metering law profile. DSIRE
- Consumers Energy (MI) — Michigan’s DG program specifics. Consumers Energy
