The Virginia Clean Economy Act is a 2020 state law that requires Virginia’s two largest investor-owned utilities to deliver 100 percent renewable electricity within the next two decades. Dominion Energy has to get there by 2045; Appalachian Power by 2050. Codified primarily in Code of Virginia § 56-585.5, the law sets binding annual renewable targets, forces coal and most gas plants to close on fixed deadlines, mandates thousands of megawatts of offshore wind and battery storage, and rewrites the rules for rooftop solar.1Virginia Code Commission. Virginia Code 56-585.5 – Generation of Electricity From Renewable and Zero Carbon Sources
What the Law Requires Utilities to Do
At the center of the act is a mandatory Renewable Portfolio Standard. Each utility has to supply a rising percentage of its retail electricity from qualifying renewable sources every year until it hits 100 percent. Dominion, classified as a Phase II Utility, is on the 2045 schedule. Appalachian Power, a Phase I Utility, follows the same structure on a slower track to 2050.2Virginia General Assembly. HB 1526 Electric Utility Regulation; Environmental Goals Miss a target, and the utility owes a deficiency payment keyed to the shortfall in megawatt-hours.
Compliance is tracked with Renewable Energy Certificates. A utility earns or buys one certificate for each unit of qualifying electricity, then surrenders enough to match its annual obligation. Virginia’s definition of renewable energy covers sunlight, wind, falling water, biomass, waste-to-energy, landfill gas, municipal solid waste, wave motion, tides, and geothermal resources. Coal, oil, natural gas, and nuclear power are expressly excluded.3Virginia Code Commission. Virginia Code 56-576 – Definitions The nuclear exclusion is worth noting because Virginia’s existing nuclear fleet produces substantial carbon-free electricity that does not count toward these targets.
When Fossil Fuel Plants Have to Close
The act set two waves of mandatory retirements. In the first wave, Dominion and Appalachian Power had to shut down all coal-fired units and all oil-fired units larger than 500 megawatts by December 31, 2024. Narrow exceptions apply for coal plants jointly owned with a cooperative utility and for the Virginia City Hybrid Energy Center in Wise County.1Virginia Code Commission. Virginia Code 56-585.5 – Generation of Electricity From Renewable and Zero Carbon Sources
The second wave sweeps in everything else that burns fuel, including natural gas. Both utilities must retire all remaining carbon-emitting units by December 31, 2045. That is the same date for both companies, even though Appalachian Power has until 2050 to hit full renewable supply. So Appalachian Power will physically close its fossil plants by 2045 but has five more years to reach 100 percent through purchased power and certificates.
There is a safety valve. A utility can petition the State Corporation Commission to delay a retirement if closing the plant on schedule would threaten the reliability or security of electric service. The Commission reviews each proposed retirement on its own facts, looking at in-state resources and the wider regional transmission system. That provision has gained importance as grid operators across the country work through how to keep the lights on during the transition.
Offshore Wind and Solar Build-Out
The act’s most visible mandate is Dominion’s requirement to develop at least 5,200 megawatts of offshore wind capacity by January 1, 2034.2Virginia General Assembly. HB 1526 Electric Utility Regulation; Environmental Goals The Coastal Virginia Offshore Wind facility, about 27 miles off Virginia Beach, is the flagship project. As of 2026 it is in the final stages of construction and commissioning, and when finished it will rank among the largest offshore wind installations in the United States.
On land, the law raised the cap on solar and onshore wind declared to be in the public interest from 5,000 megawatts to 16,100 megawatts. That ceiling matters because Virginia law requires a public-interest finding before the Commission can approve utility-scale generation. Raising it removed a bottleneck that had been limiting large solar development across the Commonwealth.
Energy Storage
Renewable generation only helps when the grid can save some of it for the hours when the sun is down and the wind is calm. The act requires each utility to petition for approval to build or acquire significant storage by December 31, 2035. Dominion’s target is 2,700 megawatts; Appalachian Power’s is 400 megawatts, for a combined 3,100 megawatts of buffer against intermittency.
The statute puts guardrails on how that storage gets built. No single project can exceed 500 megawatts, though Dominion is permitted one project up to 800 megawatts. At least 35 percent of the storage placed into service must be owned by or purchased from a party other than the utility, which opens the door for independent developers. And at least 10 percent should sit behind the meter, meaning batteries installed at homes and businesses rather than at utility-scale sites.
What It Means for Your Home
If you own a home in Virginia and are thinking about solar, the act changed several rules that affect you directly.
Net Metering
Net metering lets you send excess electricity from a rooftop system back to the grid and receive a credit on your bill. Under the current rules, individual systems can be up to 25 kilowatts for residential customers and up to 3 megawatts for nonresidential customers such as businesses, farms, and houses of worship.4Virginia Code Commission. Virginia Code 56-594 – Net Energy Metering Provisions The act also raised the aggregate cap on net metering from 1 percent to 6 percent of each utility’s adjusted peak-load forecast for the prior year, with 5 percent available to all customers and 1 percent reserved for low-income customers.5State Corporation Commission. Virginia State Corporation Commission Net Metering Order
Standby Charges
Standby charges are monthly fees that utilities assess to cover the infrastructure cost of staying connected to a customer who generates most of their own power. The rules depend on your utility. For Dominion Energy customers, standby charges apply to residential solar systems larger than 15 kilowatts, and the Commission must approve the methodology and confirm the charges recover only the infrastructure costs actually tied to serving those customers. For Appalachian Power and the other investor-owned utilities, standby charges on residential and agricultural net metering systems have been prohibited since July 1, 2020.
The Federal Solar Tax Credit
Separate from the state law but important to your math: the federal Residential Clean Energy Credit, which covered 30 percent of installation costs, is not available for systems placed in service after December 31, 2025.6Internal Revenue Service. Residential Clean Energy Credit If you installed solar in 2025 or earlier, you can still claim the credit on your return. If you install in 2026, that 30 percent federal offset no longer applies, which changes the payback period meaningfully. Separate federal production and investment credits may still be available for commercial-scale projects, but their status is evolving, so confirm with a tax professional before committing.
Energy Efficiency Programs
The act also tells utilities to help customers use less electricity in the first place. Code of Virginia § 56-596.2 sets annual energy efficiency savings targets as a percentage of each utility’s average retail sales from 2019, a fixed baseline that does not drift. Dominion must achieve at least 1.25 percent in annual savings against that baseline; Appalachian Power must achieve at least 0.5 percent. For every three-year period beginning in 2026, the Commission sets updated targets using the same 2019 baseline.7Virginia Code Commission. Virginia Code 56-596.2 – Energy Efficiency Policy and Programs; Financial Assistance for Low-Income Customers At least 15 percent of program costs must go to projects benefiting low-income, elderly, or disabled individuals, and veterans. In practice, that money typically funds weatherization, insulation, and high-efficiency appliance replacements for households that could not otherwise afford them.
How It Affects Your Electric Bill
Everything the act requires costs money, and Virginia law generally lets utilities recover those costs from ratepayers through rate adjustment clauses approved by the Commission. Dominion uses specific rider charges to fund offshore wind, solar, storage procurement, and efficiency programs. The Commission reviews each rider periodically to confirm the utility is only recovering what it was authorized to spend.
The combined effect of these riders has been a steady source of political argument. Building 5,200 megawatts of offshore wind, retiring working power plants ahead of the end of their useful lives, and deploying thousands of megawatts of batteries carry real upfront costs that land on customer bills. Utilities say fuel savings and federal incentives offset a meaningful share over time. Critics point to the scale and pace of the mandates as a driver of rising rates. Whichever view you hold, compliance costs appear as specific line items on your bill rather than as a generic rate increase, so you can see what you are paying for the transition.
Can the Law Be Repealed?
The act has survived every repeal attempt so far. During the 2025 General Assembly session alone, more than a dozen bills tried to repeal, weaken, or undermine its core requirements, and all of them failed. Because the specific megawatt targets and retirement dates are written into the Code of Virginia rather than delegated to agency rulemaking, administrative rollback is not really an option; any meaningful change has to come from the General Assembly. The political environment around energy shifts frequently, and future sessions could reach different results, but the structural choice to hardcode the mandates into statute has made the act durable in practice.